M.  S.  BOWEN. 


THE  LIBRARY 

OF 

THE  UNIVERSITY 
OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


LAW    CATALOGUE. 

BANKS   &   BROTHERS, 

144  Nassau  Street,  Hew  York,  and  4T5  Broadway,  Albany. 

1859. 


ADATIS  ON  EJECTMENT. 

Fourth  Edition.     Price  $5. 

A  TREATISE  ON  THE  PRINCIPLES  AXD  PRACTICE  OP  THE  ACTION  or  EJECTMENT,  AND  THM 
resulting  Action  for  Meane  Profits,  by  JOHN  ADAMS,  sergeant  at  law.  The  Fourth  Ameri- 
can from  the  London  Edition,  with  Notes  of  the  Decisions  made  by  the  Supreme  and  Cir- 
cuit Courts  of  the  United  States,  and  by  the  Courts  of  the  several  States,  whose  decisioms 
hare  been  reported ;  together  with  the  statutory  provisions,  in  relation  to  those  actions, 
contained  in  the  Revised  Statutes  of  New  York ;  and  Precedents  of  Entries,  Pleadings  and 
Process  adapted  thereto,  by  JOHN  L.  TILLINGHAST,  counselor  at  law.  To  which  are  added 
Annotations  and  References  to  the  most  recent  American  Decisions,  by  THOMAS  W.  CLEKKJ^ 
counselor  at  law.  Carefully  collated,  and  made  to  correspond  with  the  latest  London 
edition,  corrected  by  the  author ;  together  with  additional  Notes  and  Decisions  in  the  Court* 
of  the  several  States.  By  WILLIAM  HOGAN,  counselor  at  law ;  and  continued  by  T.  W. 
WATERMAN,  embodying  all  the  American  and  English  decisions  to  the  present  time 


AI.M:.\  ON  SHERIFFS. 

Price  $3. 

THB  DCTTBS  AND  LIABILITIES  or  SHERIFFS,  IN  THEIR  VARIOUS  RELATIONS  TO  THE  PUBLIC 
and  to  individuals,  as  governed  by  the  principles  of  common  law,  and  regulated  by  tha 
Statutes  of  New  York.  Revised,  corrected  and  enlarged,  by  OTIS  ALLEN,  counselor  at  lair 


THE  AMERICAN  CHANCERY  DIGEST. 

Third  Edition.     Three  Vols.    Price  $15. 

BEINO  AN  ANALYTICAL  DIGESTED  INDEX  OF  ALL  THB  REPORTED  DECISIONS  IN  EQUTTT  or 
the  United  States  Courts  and  of  the  Courts  of  the  several  States,  to  the  present  time,  with 
Notes  and  a  copious  Index ;  also  an  introductory  Essay,  comprising  an  historical  sketch  of 
the  Court  of  Chancery ;  an  account  of  the  nature,  powers  and  functions  of  the  Court,  and 
the  organization  and  equity  jurisdiction  of  the  Court  of  the  United  States  and  of  each  at 
the  States  of  the  Union.  By  THOMAS  W.  WATERMAN,  of  the  New  York  Bar. 

We  subjoin  a  list  of  the  American  reports  from  which  the  digest  has  been  compiled.  From 
this  catalogue,  the  lawyer  will  perceive  that  the  three  volumes  under  consideration  contain 
more  practical  law  than  any  other  compilation  he  could  purchase. 

ALABAMA. — Alabama  Report*,  by  Minor,  1  voL  ;  Stewart's  Report*,  8  Tola. ;  Stewart  &  Porter's  Btporta 
6  Tols. ;  Porter's  Reports,  9  rots. ;  Alabama  Reports  (new  series),  IT  rols. 

AKKAHSAS. — Arkansas  Beports,  5  Tols. ;  English's  Arkansas  Reports,  4  rols. 

Comc«cncuT.— Klrby's  Beports,  1  roL ;  Root's  Beports,  2  rols. ;  Day's  Eeports,  C  vols. ;  Connecticut  Hs- 
ports,  19  Tols. 

.— Harrington's  Eeports,  4  rols. 


2  BANKS  &  BROTHERS' 

GEORGIA. — T.  TJ.  P.  Charlton's  Reports,  1  vol. ;  R.  M.  Charlton's  Keports,!  vol.;  Dudley's  Beports,  1  voL  ; 
Kelley's  Reports,  8  vols. ;  Georgia  Reports,  8  vols. 

ILLINOIS. — Breese's  Reports,  1  vol.  ;  Scammon's  Reports,  4  vols. ;  Oilman's  Reports,  ft  vols. 

INDIANA. — Blackford's  Reports,  8  vols. ;  Smith's  Keports,  1  vol. 

IOWA. — G.  Greene's  Reports,  1  vol. 

KENTUCKY. — Hughes'  Reports,  1  vol. ;  Kentucky  Decisions,  1  vol. ;  Hardin's  Reports,  1  vol. ;  Bibb's  Re- 
ports, 4  vols. ;  A.  K.  Marshall's  Reports,  8  vols. ;  Littell's  Reports,  5  vols.  ;  Littell's  Select  Cases,  1  voL ; 
Monroe's  Reports,  7  vols. ;  J.  J.  Marshall's  Keports,  7  vols. ;  Dana's  Reports,  9  vols. ;  Ben.  Monroe's  Law 
and  Equity  Reports,  8  vols. 

LOUISIANA. — Martin's  Reports,  12  vols. ;  Martin's  Reports  (new  series),  8  vols. ;  Louisiana  Reports,  19 
Tols. ;  Robinson's  Reports,  12  vols. ;  Louisiana  Annual  Reports,  8  vols. 

MAINE. — Greenleaf's  Reports,  9  vols. ;  Fairfield's  Reports,  8  vols. ;  Maine  Reports,  16  vols. 

MARYLAND. — Bland's  Chancery  Reports,  8  vols. ;  Harris  &  McIIenry's  Reports,  4  vols. ;  Harris  &  John- 
ion's  Reports,  7  vols.  ;  Harris  &  Gill's  Reports,  2  vols.;  Gill  &  Johnson's  Reports,  12  vols.;  Gill's  Rep.  5  vols. 

MASSACHUSETTS. — Massachusetts  Reports,  17  vols. ;  Pickering's  Reports,  24  vols.;  Metcalfs  Reports,  12 
yols. ;  Cushing's  Reports,  1  voL 

MICHIGAN. — Harrington's  Chancery  Reports,  1  vol. ;  Walker's  Chancery  Reports,  1  vol. 

MISSOURI. — Missouri  Reports,  9  vols. 

MISSISSIPPI. — Freeman's  Chancery  Reports,  1  vol. ;  Smedes  &  Marshall's  Chancery  Reports,  1  vol. ; 
Walker's  Reports,  1  vol. ;  Howard's  Reports,  7  vols. ;  Smedes  &  Marshall's  Reports,  18  vols. 

NEW  HAMPSHIRE. — New  Hampshire  Reports,  13  vols. 

NEW  JERSEY. — Greene's  Chancery  Reports,  3  vols.  ;  Saxton's  Chancery  Reports,  1  vol. ;  Halsted's  Chan- 
cery Reports,  1  vol. ;  Cox's  Reports,  1  vol. ;  Pennington's  Reports,  2  vols. ;  Southard's  Reports,  2  vols. ; 
Halsted's  Law  Reports,  7  vols. ;  Green's  Law  Reports,  8  vols. ;  Harrison's  Reports,  4  vols. ;  Spencer's  Re- 
ports, 1  vol. ;  Zabriskie's  Reports,  1  voL 

NEW  YORK. — Johnson's  Chancery  Reports,  7  vols. ;  Hopkins1  Chancery  Reports,  1  vol. ;  Paige's  Chancery 
Reports,  11  vols. ;  Barbour's  Chancery  Reports,  8  vols. ;  Edwards'  Chancery  Keports,  3  vols. ;  Hoffman's 
Chancery  Reports,  1  vol. ;  Clarke's  Chancery  Reports,  1  vol. ;  Sandford's  Chancery  Reports,  4  vols. ;  Cole- 
man's  Cases,  1  vol. ;  Coleman  &  Caines'  Cases,  1  vol. ;  Caines'  Reports,  3  vols. ;  Caines'  Cases  in  Error,  2 
vols. ;  Anthon's  N.  P.  Reports,  1  vol. ;  Yates'  Select  Cases,  1  vol. ;  Johnson's  Cases,  8  vols. ;  Johnson's  Re- 
ports, 20  vols. ;  Cowen's  Reports,  9  vols. ;  Wendell's  Reports,  26  vols. ;  Hill's  Reports,  7  vols. ;  Denio's  Re- 
ports, 5  vols. ;  Barbour's  Supreme  Court  Reports,  5  vols. ;  Comstock's  Reports,  8  vols. ;  Hall's  Superior 
Court  Reports,  2  vols. ;  Sandford's  S.  C.  Reports,  1  vol. 

NORTH  CAROLINA. — Devereux's  Equity  Reports,  2  vols. ;  Devereux  &  Battle's  Equity  Reports, 2  vols.; 
Iredell's  Equity  Reports,  5  vols. ;  Martin's  Reports,  1  vol. ;  Haywood's  Reports,  2  vols. ;  Taylor's  Reports, 
1  vol. ;  Cameron  &  Norwood's  Conference  Reports,  1  vol. ;  North  Carolina  Term  Reports,  1  vol. ;  Carolina, 
Law  Repository,  2  vols. ;  Murphey's  Reports,  3  vols. ;  Hawks'  Reports,  4  vols. ;  Devereux's  Law  Reports, 
4  vols. ;  Devereux  &  Battle's  Law  Reports,  4  vols. ;  Iredell's  Law  Reports,  10  vols. 

OHIO. — Ohio  Reports,  18  vols. 

PENNSYLVANIA. — Browne's  Reports,  2  vols. ;  Miles'  Reports,  2  vols. ;  Ashmead's  Reports,  2  vols. ; 
Dallas'  Reports,  4  vols. ;  Addison's  Reports,  1  vol. ;  Yeates'  Keports,  4  vols. ;  Binney's  Reports,  6  vols. ; 
Sergeant  &  Rawle's  Reports,  17  vols. ;  Rawle's  Reports,  5  vols. ;  Penrose  &  Watts'  Reports,  8  vols. ; 
Wharton's  Reports,  6  vols.;  Watts'  Reports,  10  vols. ;  Watts  &  Sergeant's  Reports,  9  vols.;  Barr's  Re- 
ports, 10  vols. 

SOUTH  CAROLINA. — Dessaussure's  Equity  Reports,  4  vols. ;  Harper's  Equity  Reports,  1  vol. ;  McCord'a 
Chancery  Reports,  2  vols. ;  Bailey's  Equity  Reports,  1  vol. ;  Hill's  Chancery  Reports,  2  vols. ;  Riley's  Equity 
Reports,  1  voL  ;  Rice's  Equity  Reports,  1  voL  ;  Cheves'Law  and  Equity  Reports,  1  vol. ;  McMullen's  Equity 
Reports,  1  vol. ;  Spear's  Equity  Reports,  1  vol. ;  Richardson's  Equity  Reports,  2  vols. ;  Strobhart's  Equity 
Reports,  8  vols. ;  Bay's  Reports,  2  vols. ;  Brevard's  Reports,  8  vols. ;  South  Carolina  Reports,  2  vols. ;  Nott 
&  McCord's  Reports,  2  vols. ;  Constitutional  Reports,  4  vols.;  Harper's  Law  Reports,  1  vol. ;  McCord's  Law 
Reports,  4  vols. ;  Bailey's  Law  Reports,  2  vols. ;  Hill's  Law  Reports,  8  vols. ;  Riley's  Law  Reports,  1  voL  ; 
Dudley's  Law  and  Equity  Reports,  1  vol. ;  Rice's  Law  Reports,  1  vol. ;  McMullen's  Law  Reports,  2  vols. ; 
Spear's  Law  Reports,  2  vols. ;  Richardson's  Law  Reports,  3  vols. ;  Strobhart's  Law  Reports,  8  vols. 

TENNESSEE. — Tennessee  Reports,  by  Overton,  2  vols. ;  Cooke's  Reports,  1  vol. ;  Haywood's  Reports,  3  vols. ; 
Peck's  Reports,  1  vol. ;  Martin  &  Yerger's  Reports,  10  vols. ;  Yerger's  Reports,  10  vols. ;  Meigs'  Reports,  1 
voL  ;  Humphrey's  Reports,  9  vols. 

UNITED  STATES  COURTS. — Dallas'  Reports,  4  vols. ;  Cranch's  Reports,  9  vols.  ;  Wheaton's  Reports,  12 
volg. ;  Peters'  Reports,  17  vols. ;  Howard's  Reports,  8  vols.  ;  Gallison's  Reports,  2  vols. ;  Mason's  Reports, 
B  vols. ;  Snmner's  Reports,  8  vols. ;  Story's  Reports,  8  vols. ;  Woodbury  &  Minot's  Reports,  2  vols. ;  Paine'g 
Beports,  1  vol. ;  Washington's  C.  C.  Reports,  4  vols. ;  Peters'  Reports  (Circuit  Court),  1  vol. ;  Baldwin's 
Reports,  1  vol. ;  Gilpin's  Reports,  1  vol.  ;  Wallace's  Reports,  1  vol. ;  Wallace,  jr.,  Reports,  1  vol. ;  McLean's 
Reports,  3  vols. ;  Brockenbrough  (Chief  J.  Marshall's  Decision),  2  vols. 

VERMONT.— N.  Chipman's  Reports,  1  vol. ;  Tyler's  Reports,  2  vols. ;  Brayton's  Beports,  1  vol. ;  D.  Chip- 
man's  Reports,  2  vols. ;  Aiken's  Reports,  2  vols. ;  Vermont  Reports,  21  vols. 


LAW  PUBLICATIONS.  3 

VnujiNiA.— Jefferson'*  Report*,  1  voL ;  Virginia  Case*,  8  vols. ;  Wythe's  Reports,  1  voL ;  Washington'* 
Reports,  2  vols. ;  Call's  Reports,  6  vols. ;  Hennlng  A  Munford's  Reports,  4  vols. ;  Mun ford's  Reports,  6  vols. ; 
Ollmer's  Report*,  1  vol. ;  Randolph"*  Report*,  0  vols. ;  Leigh'*  Reports,  12  Tola.  ;  Robinson's  Reports,  S 
vol*. ;  G  rat  tan's  Report*,  ft  vote. 

from  LKWW  H.  SAXDTORD,  Judge  of  the  Superior  Court  of  the  City  of  New  fork,  and  late 

Vice-Chancellor. 

I  am  much  obliged  to  you  for  calling  my  attention  to  your  recent  edition  of  the  American  Chancery- 
Digest,  prepared  by  Mr.  Waterman. 

It  is  an  admirable  work,  and  cannot  fall  to  give  entire  satisfaction  to  the  profession. 

E  Besides  being  a  complete  digest  of  all  the  American  decision*  in  equity,  well  arranged,  and  a  reference  to 
every  bead,  very  much  facilitated  by  the  ample  and  copious  index  at  the  end  of  each  volume,  it  is  enriched 
with  references  to  English  Chancery  decisions  on  the  same  paints,  and  with  a  valuable  history  of  the  Court 
of  Chancery  and  account  of  the  equity  courts  and  jurisdiction  of  the  several  states  and  the  United  States. 
This  history  and  description  alone  must  have  cost  the  energetic  author  a  great  deal  of  labor ;  and  the  whole 
work  I*  a  Monument  of  wall  directed  and  persevering  industry. 

From  the  Hon.  RIUBKN  H.  WAI/WOBTH,  late  Chancellor  of  the  State  ofNeio  York. 

I  have  examined  the  three  volumes  of  the  American  Chancery  Digest,  newly  arranged  and  brought  dewn 
to  the  present  time,  by  Thomas  W.  Waterman,  Esq.,  and  find  It  a  work  of  great  value,  very  faithfully  exe- 
ented ;  which  the  members  of  the  profession  will  not  think  it  wise  to  dispense  with  the  possesion  of  when 
they  once  become  accquainted  with  its  merits. 


ANTHON'S  NISI  PRII7S  REPORTS. 

Second  Edition.    Price  $4. 

THE  LAW  OP  NISI  Pares,  BEING  REPORTS  OP  CASES  DETERMINED  AT  NISI  PRTTJS,  is  THB 
Supreme  Court  of  the  State  of  New  York ;  with  Notes  and  Commentaries  on  each  cose. 
Id  ed.,  with  many  additional  cases  never  published  before.  Judges  presiding :  Chief  Justice, 
James  Kent ;  Justices,  Van  Ness,  Thompson,  Spencer  and  Yates. 

Mr.  ANTHON  has  been  equally  well  known  as  an  eminent  and  successful  practitioner,  and 
distinguished  law  writer,  for  the  last  forty  years.  His  cotemporaries,  many  of  whom  aro 
now  dead,  have  been  men  who  have  honored  and  adorned  the  highest  walks  of  the  pro- 
fession, both  on  the  bench  and  at  the  bar.  This  volume  of  tfisi  Prius  Reports  was  always 
much  admired ;  and  the  importance  and  value  of  the  cases  contained  in  it  immediate! j 
caused  it  to  bo  extensively  cited  and  quoted  in  the  opinions  of  judges  and  in  law  works. 
The  present  edition  was  carefully  revised  and  annotated  by  Mr.  ANTHON  himself. 

ARCIIBOLD'S  CIVIL   PLEADING. 

Second  Edition.     Price  $4. 

A  DIGEST  OP  TUB  LAW  RELATIVE  TO  PLEADING  AND  EVIDENCE  IN  CIVIL  ACTIONS.  BY 
JOHN  FREDERICK  ARCHBOLD,  barrister  at  law.  Second  American,  from  the  last  London 
edition. 


ARCIIBOLD'S  PLEADING  AND  EVIDENCE. 

Seventh  Edition  in  Press. 

HARBOUR'S  CHANCERY  REPORTS. 

Three  Vols.    Price  $15. 

REPORTS  or  CASES  ARGUED  AND  DETERMINED  IN  THE  COURT  or  CHANCERY  OP  THE  STATE 
of  New  York,  from  1845  to  1847.  By  OLIVER  L.  B  ARBOUR,  counselor  at  law,  successor  of 
Paige,  and  in  continuation  of  Johnson,  Hopkins  and  Paige.  These  decisions  aro  considered 
the  ablest  and  most  reliable  of  any  in  our  country.  II.  II.  Walworth,  Chancellor. 

BARBOCR'S  CRIMINAL   TREATISE. 

Second  Edition.    Price  $5. 

THE  MAGISTRATE'S  CRIMINAL  LAW  :  A  PRACTICAL  TREATISE  ON  THE  JURISDICTION,  DUTY 
and  authority  of  the  Justices  of  the  Peace  in  the  State  of  New  York  in  Criminal  Courts. 


4  BANKS  4  BROTHERS' 

Containing,  also,  a  Summary  of  the  law  relative  to  Crimes  and  Punishments,  with  an  Appen- 
dix of  Forms  of  Proceedings.  By  OLIVER  L.  B ARBOUR,  counselor  at  law.  Second  edition. 
Much  enlarged,  with  Notes  and  References  and  additional  forms. 

The  second  edition  of  Barbour's  Criminal  Treatise  has  been  carefully  revised  by  the  dis- 
tinguished author,  with  important  additions.  It  is  too  well  known  to  require  from  us  an 
extended  notice.  Suffice  it  to  say,  that  it  is  an  elementary  work  of  great  merit,  and  that, 
although  prepared  more  especially  for  the  state  of  New  York,  it  will  be  found  almost  equally 
useful  in  every  state  in  the  Union. 

BARBOUR'S  LAW  OF  SET-OFF. 

Price  $2. 

A.  TREATISE  ON  THE  LAW  OF  SET-OFF,  WITH  AN  APPENDIX  OF  PRECEDENTS.  BY  OLIVBB 
L.  BARBOUR,  counselor  at  law. 

This  is  an  elegant  and  scientific  manual  on  an  important  aad  constantly  recurring  topio  of 
the  law.  No  work  could  be  more  useful. 


BARBOUR'S  SUPREME  COURT  REPORTS. 

Twenty-four  Vole.     Price  $84. 

REPORTS  OF  CASES,  IN  LAW  AND  EQUITY,  IN  THE  SUPREME  COURT  OF  THE  STATE  or  NEW 
York,  under  the  New  Constitution,  1846.  By  OLIVER  L.  BARBOUR,  counselor  at  law. 

These  reports  cover  a  period  of  twelve  years  from  the  adoption  of  the  last  constitution  of 
New  York  to  the  present.  During  that  time  the  judicial  system  and  the  practice  and  plead- 
ings of  the  courts  of  New  York  have  undergone  a  most  radical  change.  The  judges  have 
been  made  elective,  and  then*  term  of  office  abbreviated.  The  forms  of  actions  have  been 
abrogated,  and  an  attempt  made  to  simplify  and  cheapen  litigation.  During  no  similar  period 
in  the  history  of  the  state  have  such  sweeping  and  vitally  important  changes  been  made. 
These  reports,  therefore,  acquire  a  peculiar  and  extraordinary  interest,  not  only  within  our 
own  borders,  but  in  states  which  have  followed,  or  are  about  to  follow,  our  example. 
But  apart  from  these  considerations,  they  contain  a  carefully  selected  and  imposing  array 
of  important  cases,  reported  with  all  the  accuracy  and  ability  for  which  Mr.  BARBOUH  ia  so 
justly  celebrated. 

BRIGHT'S  HUSBAND  AND  WIFE. 

Two  Vols.    Price  $10. 

A  TREATISE  ON  THE  LAW  OF  HUSBAND  AND  WIFE,  AS  RESPECTS  PROPEBTT.  PABTLT 
founded  on  Roper's  Treatise,  and  comprising  Jacob's  Notes  and  additions  thereto,  by  JOHH 
EDWARD  BRIGHT,  Esq.,  of  the  Inner  Temple,  barrister  at  law.  With  copious  Notes  and  Ref- 
erences to  the  American  Decisions,  and  also  an  Appendix,  containing  the  Statutes  of  every 
atate  hi  the  Union,  in  relation  to  the  rights  and  property  of  females  before  and  after  mar- 
riage. By  RALPH  LOCKWOOD,  counselor  at  law. 

from  the  American  Law  Journal. 

The  last  edition  of  Roper's  Husband  and  Wife  was  that  of  1826.  The  English  Law  Magazine  and  Reporter 
of  May,  1849,  observes  that  the  "  want  of  a  new  edition  had  for  many  years  been  felt  by  the  profession." 
The  progress  of  the  United  States  In  wealth,  of  society  In  refinement,  and  of  judicial  and  legislative  policy 
to  secure  property  to  wives,  have  increased  the  want  of  a  new  publication  here,  embracing  the  recent  de- 
cisions on  this  Interesting  relation.  We  have  not  had  leisure  to  examine  into  the  merits  of  the  notes  by  th« 
American  editor,  but  of  the  work  of  Mr.  Bright  we  can  cheerfully  add  our  testimony  to  that  of  the  English 
Reviewer,  that  "  for  completeness  and  soundness  it  is  likely  to  become  the  text-book  upon  the  law  of  hus- 
band and  wife." 

From  the  United  States  Laic  Magazine. 

The  last  Edition  of  Roper's  Treatise  was  published  in  1826,  and  the  work  of  Mr.  Bright  supplied  a  want 
that  had  for  many  years  been  felt -by  the  profession  in  England,  owing  to  the  various  cases  which  had  arisen 
and  the  changes  which  bad  been  made,  during  the  interval  of  twenty  years,  upon  this  branch  of  the  law. 
The  effect  of  those  changes  had  been  to  render  obsolete  a  considerable  portion  of  Mr.  Roper's  work — so  much 


LAW  PUBLICATION&  5 

that  Mr.  Bright,  after  spending  tome  time  la  preparing  a  new  edition,  was  compelled  to  abandon  the  un- 
dertaking as  impracticable  ;  and  ho  thereupon  constructed  his  now  and  valuable  Treatise,  taking  Mr.  IJo- 
per's  book  a*  a  basis. 

The  law  of  husband  and  wife  in  the  United  States  has  lately  been  the  subject  of  many  statutory  enact- 
ments. The  progress  of  our  society  la  wealth  and  refinement  has  demanded  laws  to  secure  property  to 
wives,  &«.  These  numerous  additions  and  changes  hare  long  impressed  upon  us  the  necessity  of  an  Ameri- 
can edition  of  the  law  of  Ilnsband  and  Wife,  inch  as  is  now  before  us.  Ralph  Lock  wood  baa  long  been  known 
to  the  profession  of  New  York,  as  a  gentleman  of  high  legal  talent,  and  this  production  Is  certainly 
additional  evidence  of  his  ability,  as  well  as  untiring  and  persevering  Industry.  We  find  that  the  reference* 
to  American  cases  are  numerous  and  correct.  In  the  appendix,  the  editor  has  collected  the  statutes  of 
every  State  In  the  Union  relative  to  the  rights  and  property  of  married  women,  while  in  his  notes  we  find 
discussed,  with  reference  both  to  Knglish  and  American  authorities,  many  of  the  most  important  questions 
that  have  arisen,  or  may  arise  under  those  statutes,  and  the  kindred  branches  of  Jurisprudence  necessarily 
involved  in  them.  The  appendix  alone  is  worth  more  than  the  price  of  the  book.  The  late  hour  at  which 
the  work  was  received  precludes  the  possibility  of  our  doing  it  justice  in  the  present  number,  and  we  shall 
therefore  recur  to  and  discuss  its  merits  more  at  large  in  our  next.  In  the  mean  time,  we  have  given  the 
work  an  examination  sufficient  to  enable  us  to  say  that  we  can  safely  recommend  it  to  our  readers  through- 
out the  Union.  It  is  intended  for  the  I'al  ted  States  at  large ;  and  mere  local  lavs,  arising  from  the  different 
Jirmt  of  administering  justice,  have  been  properly  omitted. 


<  A  IM.V  REPORTS. 

Third  Edition.     Three  Vols.    Price  $12. 

N«w  YORK  TERM  REPORTS  OF  CASES  ABQUED  AXD  DETERMINED  IN  THE  SUPREME  COURT 
or  that  State.  Third  edition  just  published,  containing  Notes  and  References  to  all  the 
American  and  English  decisions,  to  the  time  of  publication,  by  WATERMAN;  with  correc- 
tions and  additions.  By  GEORGE  CAIKES,  counselor  at  law. 

GEORGE  CAIKES,  Esq.,  was  the  first  reporter  of  the  decisions  of  the  Supreme  Court  of  the 
state  of  New  York,  regularly  appointed  as  such.  The  names  of  the  honorable  judges  who 
presided  in  this  court,  during  the  period  above  stated,  were,  Morgan  Lewis,  James  Kent 
(afterwards  Chancellor  of  the  state),  Jacob  Radcliffe,  Brockholst  Livingston,  Smith  Thomp- 
son (the  two  last  named  gentlemen  were  subsequently  appointed  judges  of  the  Supreme 
Court  of  the  United  States),  Ambrose  Spencer  and  Daniel  D.  Tompkina.  A  more  able  and 
independent  Judiciary  never  existed  at  any  one  period,  in  any  court  of  the  United  States. 

CALIFORNIA  PRACTICE. 

Price  $3  50. 

A  TBEATISB  ox  THE  PRACTICE  OF  THE  COURTS  OF  THE  STATE  OF  CALIFORNIA,  CAREFULLY 
adapted  to  the  existing  law. 


<  O  MS  KM  Iv's  REPORTS. 

Vols.  1,  2,  4.    Price  $10  50. 

REPORTS  OF  CASES  ARGUED  AND  DETERMINED  IN  THE  COURT  OF  APPEALS  OF  THE  STATE  o» 
New  York.  By  GEORGE  P.  COMSTOCK,  Esq.,  State  Reporter.  Judges'  names :  Freeborn  G. 
Jewett,  Greene  C.  Bronson,  Addison  Gardner,  Charles  H.  Ruggles,  Samuel  Jones,  William 
B.  Wright,  Thomas  A.  Johnson,  Charles  Gray,  Elisha  P.  Hurlbut,  Ira  Harris,  Daniel  Pratt, 
Henry  W.  Taylor,  Selah  B.  Strong,  Daniel  Cady,  William  H.  Shankland,  James  G.  Hoyt 


CONNECTICUT    DIGEST. 

914  Pages.    Price  $7. 

A  DIGEST  OF  THB  REPORTED  DECISIONS  OF  THE  SUPERIOR  COURT,  AND  OF  THE  SUPREME 
Court  of  Errors  of  the  State  of  Connecticut,  from  the  organization  of  said  courts  to  the  pres- 
ent time.  By  THOMAS  W.  WATERMAN,  counselor  at  law. 

from  t\e  ffartfird  Dotty  Caurani. 

Banks  ft  Brothers,  law  publishers,  144  Nassau  street,  New  York,  have  issued  a  handsome  volume, 
entitled  "A  Digest  of  the  Reported  Decisions  of  the  Superior  Court,  and  of  the  Supreme  Court  of  Errors, 


6  BANKS  &  BROTHERS' 

of  the  State  of  Connecticut,  from  the  organization  of  said  courts  to  the  present  time,  by  Thomas  "W. 
Waterman,  Counsellor-at-Law."  These  cases  cover  sixty-eight  years,  beginning  with  1789,  and  closing 
\rlth  1857.  The  Digest  includes  Kirby,  Boot,  five  volumes  of  Day's  Reports,  and  twenty-four  volumes  of 
Connecticut  Reports,  Mr.  Waterman,  the  author  of  the  Digest,  seems  to  have  done  his  work  with  his  usual 
fidelity.  He  says  he  has  verified  the  page  of  every  reference  to  the  Connecticut  Reports  after  the  matter 
was  in  type.  He  has  avoided  the  practice  often  followed  by  compilers,  of  putting  several  distinct  matters 
under  one  general  head,  and  has  assigned  each  subject  a  title,  to  catch  the  eye  in  the  table  of  contents,  and 
direct  the  inquirer.  Mr.  Waterman  Is  a  practiced  hand,  and  knows  just  what  the  lawyer  wants,  and  what 
he  does  not  want.  Though  a  New  York  man.  he  evinces  a  familiarity  with  Connecticut  law,  and  Connec- 
ticut history  and  practice,  that  leads  us  to  believe  his  work  will  be  a  favorite  with  Connecticut  men.  Any 
business  man  who  desires  to  know  what  are  the  laws  of  Connecticut,  other  than  those  in  our  statute  book, 
should  be  referred,  unhesitatingly,  to  this  Connecticut  Digest. 

from  the  New  York  Commercial  Advertiser. 

Connecticut  has  the  honor  to  be  the  first  state  of  the  Union  in  which  judicial  decisions  were  reported. 
The  first  American  law  report  was  edited  by  Mr.  Kirby,  and  printed  at  Litchfield,  In  1789.  Root's  Con- 
necticut Reports  were  published  ten  years  later,  and  they  were  followed  by  Day's  Reports,  a  series  which 
was  continued  at  intervals  until  1853,  when  the  present  Reporter  of  the  Connecticut  decisions,  Mr.  Matson, 
commenced  his  useful  labors.  There  are  now  thirty-two  volumes  of  Connecticut  Reports  in  all,  contain- 
ing about  three  thousand  five  hundred  cases,  and  the  substance  of  these  has  been  neatly  epitomised,  arranged 
and  Indexed  by  Mr.  Waterman,  in  one  stout  volume  of  974  pages  octavo.  At  the  end  of  each  case  of  special 
significance  or  Importance,  he  has  noted  whether  it  was  in  reversal  or  affirmance  of  the  decision  of  the  court 
below  ;  he  has  also  noted  the  cases  which  hare  been  overruled,  denied  or  doubted.  The  facilities  for  refer- 
ence to  every  part  of  the  volume  are  ample,  and  we  consider  It  one  of  the  best  arranged  Digests  of  Reports 
we  have  ever  examined.  To  all  Connecticut  lawyers,  it  will,  of  course,  be  indispensable,  and  to  lawyers  in 
other  states  it  will  be  scarcely  less  useful.  It  is  justly  remarked  that  "  the  Connecticut  decisions  are  among 
the  cited  authorities  of  every  text-book ;  and  no  trial  of  any  magnitude  can  take  place,  in  which  very  mate- 
rial aid  may  not  be  derived  from  precedents  drawn  from  this  source."  It  is  one  of  the  best  evidences  of  the 
esteem  In  which  the  Connecticut  Reports  are  held,  that  some  of  them  have  been  reprinted  in  England. 


CONNECTICUT  REPORTS. 

Second  Edition.     Twenty-one  Vols.     Price  $105. 

REPORTS  or  CASES  ARGUED  AND  DETERMINED  IN  THE  SUPREME  COURT  OF  ERRORS  OF  THE 
State  of  Connecticut,  from  1814,  inclusive;  prepared  and  published  in  pursuance  of  a  Stat- 
ute Law  of  the  State.  Second  edition,  corrected,  with  Notes  and  References  to  the  several 
Stete  Reports.  By  the  Hon.  THOMAS  DAY. 

No  lawyer  should  be  without  these  reports.  The  railroad  cases  alone  in  them  are  worth 
the  price  of  the  set.  They  comprehend  a  period  of  seventy  years,  or,  in  other  words,  almost 
our  entire  existence  as  an  independent  people.  They  therefore  contain  precedents  for  all 
the  various  exigencies  which  have  from  time  to  time  arisen  since  the  origin  of  our  govern- 
ment. Their  utility  and  the  high  appreciation  hi  which  they  are  held,  are  shown  by  the 
frequency  of  their  citation,  not  only  in  all  the  law  books  of  the  day,  but  in  cases  on  trial, 
and  in  the  written  opinions  of  judges. 


COWEN»S  CIVIL  TREATISE:. 

Fourth  Edition.    Price  $5. 

.A  TREATISE  ON  THE  CIVIL  JURISDICTION  OF  JUSTICES  OF  THE  PEACE  OF  THE  STATE  OF  NEW 
York.  By  ESEK  COWEN,  counselor  at  law.  Second  edition,  revised  by  SIDNEY  J.  COWEU, 
counselor  at  law.  Third  edition,  brought  down  to  the  present  time,  by  OLIVER  L.  BARBOUB, 
counselor  at  law.  "With  appendix,  adapting  the  same  to  the  New  Code.  By  CHESTEB 
HAYDEN. 


COWEN'S  REPORTS. 

Nine  Vols.    Price  $45. 

REPORTS  OF  CASES  ARGUED  AND  DETERMINED  IN  THE  SUPREME  COURT  FOR  THE  TRIAL  OP 
Impeachments  and  the  Correction  of  Errors  of  the  State  of  New  York,  from  1823  to  1828. 
By  ESEK  COWEN,  counselor  at  law,  and  successor  of  Johnson. 


LAW  PUBLICATIONS.  7 

CROCKER  ON  SHERIFFS. 

Price  $5. 

A  TREATISE  ON  THE  DUTIES  OP  SHERIFFS,  CORONERS  AND  CONSTABLES,  WITH  PRACTICAL 
Forma.  By  JOHN  G.  CROCKER,  counselor  at  law. 

This  is  a  thorough  and  complete  treatise  upon  the  powers  and  duties  of  sheriffs  and  other 
officers.  It  is  a  modern  work,  designed  especially  for  the  state  of  New  York,  with  a  full 
citation  of  authorities  to  the  time  of  publication.  It  is  elementary  and  practical  Every 
sheriff;  coroner  and  constable,  in  the  state,  ought  to  have  a  copy;  and  magistrates  will  find 
it  extremely  useful  and  convenient  Lawyers  will  have  it,  as  a  matter  of  course. 

DART'S   L.ATV  AND  PRACTICE  OF  VENDORS  AND  PURCHASERS  Or 

REAL.   ESTATE. 

Price  $5  50. 

A  COMPENDIUM  or  THE  LAW  AND  PRACTICE  OF  VENDORS  AND  PURCHASERS  OF  REAL 
Estate.  By  J.  HEXRY  DART,  of  Lincoln's  Inn,  barrister  at  law.  With  Notes  and  Reference* 
to  American  Decisions,  by  TIIOMAS  W.  WATEUMAX,  counselor  at  law. 


DAYTON'S  SURROGATE. 

Second  Edition.     Price  $5  50. 

THE  OFFICE  OF  SURROGATE,  SURROGATES,  AND  SURROGATES'  COURTS,  AND  EXECUTORS, 
Administrators  and  Guardians  hi  the  State  of  New  York.  A  Compilation  of  the  Statutes 
and  a  Summary  of  the  Judicial  Decisions  of  the  State  of  New  York,  relating  to  the  office  of 
Surrogate,  the  Proving  of  Wills,  the  Granting  of  Probate,  of  Letters  Testamentary,  of  Ad- 
ministration and  of  Guardianship,  and  the  Powers,  Duties  and  Liabilities  of  Executors, 
Administrators  and  Guardians.  By  ISAAC  DAYTON.  With  an  Appendix,  containing  Forms 
and  Precedents  for  Practice  in  the  Surrogates'  Courts,  and  for  the  use  of  Executors,  Admin- 
istrators and  Guardians. 


DEAN'S  MEDICAL,  JURISPRUDENCE. 

Second  Edition.    Price  $3  50. 

PRINCIPLES  OF  MEDICAL  JURISPRUDENCE  DESIGNED  FOR  THE  PROFESSIONS  OF  LAW  AND 
Medicine.  By  AMOS  DEAN,  Counselor  at  law  and  Professor  of  Medical  Jurisprudence  in  the 
Albany  Medical  College. 

from  the  American  Law  Journal. 

An  experience  of  eleven  years  to  teaching  tn  the  department  of  Medical  Jurisprudence,  together  with  a 
knowledge  of  the  wants  of  the  legal  and  medical  professions.  In  regard  to  it,  have  led  the  author  to  the  com- 
pilation of  the  work  before  us.  The  objects  chiefly  had  In  view  have  been  a  methodical,  systematic  ar- 
rangement of  the  topics,  and  a  condensation  of  the  knowledge  now  possessed,  and  an  exhibition  of  it  In  a 
•(ear,  natural  and  logical  order,  together  with  such  Illustrations  as  were  deemed  necessary  to  make  an  ap- 
plication of  the  principle*  to  practice.  The  design  appears  to  have  been  well  executed,  and  the  publishers 
have  done  all  that  is  necessary  to  present  the  work  in  an  acceptable  dress. 

We  fully  concur  in  the  remark  of  the  learned  author,  that  "  no  medical  Institution,  In  this  country  or 
Xsuu|ie,  could  now  deem  its  organisation  complete,  without  a  department  devoted  exclusively  to  an  expo- 
sltion  of  the  factt  and  principle*  embraced  in  Medical  Jurisprudence."  There  Is  a  chapter  In  the  work 
devoted  to  Medical  Evidence,  which  is  well  worthy  the  perusal  of  medical  gentlemen.  In  giving  evidence, 
the  author  recommends  that  "  the  language  made  use  of  should  be  plain,  simple,  and,  if  possible,  devoid  of 
all  technical  terms."  Nothing  can  be  better  established  than  that  when  the  principles  of  a  science  are  well 
understood,  they  become  so  familiar,  and  so  simplified  in  the  mind,  that  they  can  be  communicated  by  means 
of  the  plainest  language.  He  that  understands  the  principles  best,  finds  the  least  occasion  for  technical 
terms,  In  communicating  his  ideas  to  others  not  of  the  profession. 

from  M«  United  StaU»  Lav  Magcoinefor  Auyutt. 

'  Whatever  may  be  deficient  in  the  work  of  Dr.  Beck,  will  be  found  amply  supplied  In  the  one  of  which  the 
title  Is  placed  at  the  head  of  this  article.  The  author,  Mr.  Dean,  Is  a  highly  respectable  counselor  at  law, 
and  professor  of  Medical  Jurisprudence  in  the  Albany  Medical  College,  who  has  had  an  experience  of  eleven 
years  In  teaching  In  this  department.  lie  tells  us,  In  his  preface,  that  his  Impressions  as  to  the  wants  of  the 


8  BANKS  &  BROTHERS' 

legal  and  medical  professions  led  to  the  compilation  of  his  work.  •'  It  does  not,"  he  says,  "  propose  to  add 
new  heads  or  general  topics  for  discussion  ;  to  deal  in  original  disquisitions  upon  doubtful  or  unsettled  prin- 
ciples (questions),  or  to  offer  mere  novelties  to  those  in  pursuit  of  knowledge  on  its  various  subjects.  The 
objects  chiefly  had  in  view  have  been  a  methodical,  systematical  arrangement  of  the  topics  legitimately  em- 
braced in  the  department ;  and,  in  the  treatment  of  each,  a  condensation  of  the  knowledge  now  possessed, 
Mid  an  exhibition  of  it  in  a  clear,  natural  and  logical  order,  together  with  such  illustrations  as  were  deemed 
necessary  to  make  an  application  of  the  principles  to  practice."  In  all  this  we  think  our  worthy  author  has 
substantially  succeeded.  Although,  as  he  observes,  the  science  he  treats  of,  "unlike  many  others,  admits  of 
no  logical  arrangement,"  yet  he  has  brought  together  those  subjects,  that  are  at  all  related  to  each  other,  in 
a  manner  which  appears  to  its  more  convenient  and  less  exceptional  than  any  other  that  has  fallen 
under  our  notice.  The  subjects  of  which  he  treats  are  arranged  under  five  general  heads  or  classes. 

The  first  includes  questions  arising  out  of  the  relations  of  sex,  and 'comprises,  1.  Impotence  and  Sterility  ; 
2.  Hermaphrodites,  Doubtful  Sex,  and  Monsters  ;  3.  Hope  ;  4.  Pregnancy  ;  5.  Legitimacy  ;  and  6.  Delivery. 

The  second  class  comprehends  questions  arising  out  of  injuries  inflicted  on  the  organization,  embracing, 
1.  Infanticide ;  2.  Wound  s  ;  8.  Poisons ;  4.  Persons  found  Dead. 

The  third  includes  questions  arising  out  of  diseases,  or  affections  in  the  nature  of  disease,  that  disqualify 
both  from  exercising  rights  and  performing  duties — being  principally  Insanity,  embracing  all  the  different 
forms  of  mental  alienation. 

The  fourth  includes  questions  arising  out  of  deceptive  practices  or  pretended  disqualifications,  principally 
feigned  Diseases.  And 

The  fiJVi  class  comprises  miscellaneous  questions,  such  as  Age,  Identity,  Presumption  of  Survivorship, 
Life  Assurance,  and  Medical  Evidence. 

These  several  heads  are  again  subdivided  where  admissible,  or  requisite  for  the  better  understanding  and 
f  aller  elucidation  of  the  various  topics  of  discussion,  and  the  more  complete  analysis  of  the  subject ;  and  in 
the  whole,  comprehend  every  thing  of  worth  or  interest  in  preceding  authors,  with  the  most  important 
eases  that  have  occurred  subsequent  to  tJieir  publication. 

This  large  and  valuable  addition  to  our  former  stock  of  knowledge  affords  another  answer  to  the  super- 
cilious question  of  the  Edinburgh  Keviewer,  "  Who  reads  an  American  book?"  The  learned  and  honorable 
person — now  lately  deceased— who  put  that  question,  lived  long  enough  to  acknowledge  that  it  had  been 
fully  answered,  not  merely  in  the  productions  of  Channing,  Irving,  Cooper,  Stephens,  Mackenzie,  Bryant, 
Halleck,  Longfellow,  and  Prescott,  but  in  the  graver  works  of  our  jurists— our  Kents,  our  Storys,  and  our 
Doers;  and  we  venture  to  predict  that  the  work  before  us  will,  ere  long,  serve,  like  Dr.  Beck's,  as  a  text- 
book for  foreign  commentators  and  lecturers,  and  like  the  decisions  of  a  Marshall,  a  Parsons,  a  Tilghinan, 
or  a  Spencer,  be  quoted  as  authority  in  Westminster  Hall. 

We  cannot  conclude  this  paper,  protracted  as  it  has  been,  without  noticing  a  circumstance,  less  remark- 
able, perhaps,  than  natural,  namely,  that  the  work  of  Dr.  Beck,  a  physician,  has  more  of  the  character  of  a 
law  book  than  of  a  medical  disquisition;  while  that  of  Mr.  Dean,  a  lawyer,  assumes  the  aspect  more  of  a 
medical  than  of  a  juridical  treatise — so  prone  are  we  to  value  ourselves  rather  upon  the  learning  which 
IB  extraneous,  than  upon  that  which  properly  belongs  to  our  profession. 

From  the  Law  Reporter. 

We  do  not  pretend  to  any  familiarity  with  the  science  of  medicine,  and  it  may  be  for  that  reason  that  we 
are  inclined  to  form  a  highly  favorable  opinion  of  the  above  work.  What,  in  our  view,  constitutes  its  great 
recommendation,  is  its  simplicity,  its  freedom  from  mere  technicality.  It  may  be  consulted  by  any  one  not 
versed  in  the  medical  art,  with  great  ease  and  profit  To  this  recommendation  should  also  be  added  an 
acknowledgment  of  the  clear  and  luminous  method  which  characterizes  the  treatise,  and  which  increases  Us 
value. 

from  the  Western  Law  Journal. 

It  is  a  volume  of  654  pages ;  and,  from  the  examination  we  have  been  able  to  give  It,  we  think  It  the  best 
text-book  there  is  upon  the  subject.  It  has  the  rare  and  very  great  merit  of  condensation,  occupying  not 
much  more  than  half  the  space  of  Beck  or  Chitty,  and  yet  treating  of  each  subject  as  fully  as  either  of  those 
authors.  We  would  especially  commend  the  chapter  on  Insanity,  as  containing  the  best  summary  we  have 
seen.  We  cannot,  however,  agree  with  the  author  in  regard  to  Moral  Insanity.  Although  he  only  follow* 
the  lead  of  other  eminent  writers,  we  think  the  whole  doctrine  most  pernicious  in  its  effect  upon  criminal 
jurisprudence.  It  virtually  makes  wickedness  an  excuse  for  crime. 


DENIO'S  REPORTS. 

Five  Vols.    Price  $20. 

REPORTS  OP  CASES  ABGTJED  AND  DETERMINED  IN  THE  SUPREME  COTJBT,  AND  IN  THE  COURT 
for  the  Correction. of  Errors  of  the  State  of  New  York,  from  1845  to  1848,  inclusive.  By 
HIRAM  DENIO,  Esq.,  successor  of  Hill,  and  the  continuation  of  Johnson,  Cowen  and  Wendell. 


LAW  PUBLICATIONS.  9 

DUNLAP'S  r  1 1  1   \  's  AGENCY. 

Fourth  Edition.     Price  $5. 

A  TBEATISK  ox  THE  LAW  or  PRINCIPAL  AND  AGENT,  CHIEFLY  WITH  REFERENCE  TO  Mra- 
•antilo  Transactions.  By  WILLIAM  PALET,  of  Lincoln's  Inn,  Esq.,  barrister  at  law.  With 
considerable  additions  by  J.  II.  LLOYD,  of  the  Inner  Temple,  Esq.,  barrister  at  law.  Fourth 
American  edition,  with  extensive  additions,  referring  to  and  embracing  all  the  cases,  both 
Kngtiah  and  American,  by  JOHN  A.  DUXLAP,  Esq.,  counselor  at  law,  and  brought  down  to 
the  present  time,  with  very  full  notes  to  English  and  American  Decisions,  by  THOMAS  W. 
WATERMAN,  Esq.,  counselor  at  law. 

This  edition  by  PALEY  and  LLOYD  by  DUNLAP  will  be  found,  in  comparison  with  other 
treaticoo  on  this  subject,  to  be  a  complete  substitute  for  all  of  them,  containing  several 
thousand  cases  not  referred  to  by  any  other  American  author ;  it  is,  in  fact,  an  embodiment 
of  all  the  decisions  on  the  law  of  Principal  and  Agent 

from  the  Pennsylvania  Law  Journal. 

Faley  on  Agency  baa  been  BO  long  and  favorably  known  to  the  profession,  tbat  little  more  would  seem 
to  be  required,  than  to  itate  that  an  edition,  with  American  notes  to  the  present  day,  has  been  published. 
This  treatise,  on  the  laws  governing  the  relation  borne  by  almost  every  man  to  some  other  in  the  Intercourse 
of  boaiBcM,  has  kept  pace  and  grown  with  the  extension  of  commerce.  From  the  thin  octavo  first  ushered 
Into  the  legal  world  by  Mr.  Paley  In  1811,  it  has,  after  running  through  three  English  and  two  American 
editions.  Just  left  the  hands  of  Mr.  Dunlap,  a  substantial  treatise  of  some  seven  hundred  pages,  enriched,  as 
It  seema,  with  references  to  every  important  case  that  has  been  decided,  either  here  or  in  England,  on  th* 
•nhjnot  of  agency.  Nor  has  the  American  editor  confined  himself  to  a  mere  citation  of  authorities.  Where 
the  occasion  calls  for  such  illustration,  copious  extracts,  from  the  opinions  of  the  judges  by  whom  the  cases 
cited  bare  been  decided,  are  given,  and  the  voluminous  notes  are  enriched  by  the  views  at  length  of  the 
•Mart  English  and  American  jurists,  forming  in  themselves,  in  many  cases,  treatises  on  the  subject  of  the 
text 

The  care  and  labor  bestowed  upon  Dunlap' s  Paley's  Agency  cannot  fail  to  render  it  a  standard  work  of 
great  utility. 

From  Judge  LUHPKIW. 

I  have  given  a  hasty  perusal  to  Mr.  Dnnlap's  Paley's  Agency  which  yon  kindly  sent  me.  I  lack  leisure 
»t  present  for  a  thorough  reading.  Bo  far  as  I  am  able  to  form  an  opinion,  I  do  not  hesitate  to  Indorse 
it  with  my  cordial  approbation.  One  almost  envies  the  junior  members  of  the  profession  the  advan- 
tage* they  possess,  In  selecting  the  latest  editions  of  standard  law  books  to  form  and  fill  up  their  libraries. 
"What,  for  instance,  is  Blackstone's  Commentaries,  published  in  1739,  compared  with  the  twenty-first  London 
•dftioa  of  that  great  law  manual  which  has  recently  issued  from  the  press,  with  notes  by  Mr.  Wendell,  the 
late  But*  Reporter  of  New  York  ?  And  so  of  Comyn's  Digest,  Story's  Conflict  of  Laws,  Kent's  Commen- 
taries, aa4  every  other  leading  English  and  American  law  book.  The  text  not  only  in  elementary  works, 
bat  *v*a  la  the  Reports,  would  frequently  serve  only  to  mislead,  without  the  explanatory  notes  stating  th* 
alterations  la  th*  law  since  the  authors  published. 

llorw  Inslgnltteant  is  the  title  of  Principal  and  Agent  in  th*  old  books  1  To  what  magnitude  has 
it  swelled  under  th*  vast  extension  of  modern  commerce  1 

It  would  be  folly  at  this  late  day  to  refer  to  thq  merits  of  the  original  Treatise,  or  even  to  dwell  minutely 
.*•  th*  to  valuable  notes  which  have  been  added  by  Mr.  Dunlap.  I  cannot  forego  the  temptation,  however, 
•f  spedfytag  several  by  way  of  Illustration.  As,  for  example,  Notes  (1)  p.  11,  respecting  transactions  between 
attorMjrs  tad  their  clients;  (a)  p.  155,  as  to  the  mode  by  which  corporations  may  bind  themselves ;  (g)  p. 
177,  how  ntr  an  authority  delegated  to  two  or  more  may  be  executed  by  a  part  only  of  the  agents ;  (s)  p. 
181,  th*  form  of  executing  the  power;  (5)  p.  ISC,  the  effect  of  death  OB  the  revocation  of  the  agency ;  (9) 
p.  198,  the  difference  between  general  and  special  agents ;  (/)  p.  263,  the  nature  and  effect  of  notices ;  (A) 
p.  294,  the  liability  of  the  master  for  the  acts  of  his  servants;  (<)  p  877,  the  liabilities  of  government  agents 
who  contract  in  their  public  capacity.  From  any  one  of  these  specimens,  the  readers  may  readily  jadge 
of  the  remainder.  I  can  with  great  sincerity  Invite  the  practitioner  to  place  this  book  upon  his  shelve*. 
from  tfo  A'fio  Tort  Commercial  ArtvertUer. 

This  Is  the  fourth  American  edition  of  Paley's  admirable  work  on  Agency,  which  has  been  universally 
recognised  as  the  leading  authority  among  all  the  text-books  on  that  subject,  since  Its  first  appearance  la 
181L  Mr.  Justice  Story  constantly  refers  to  It  la  hi*  Commentaries,  and  Mr.  Hammond's  Treatise  is 
<mM**f-^  a  mere  rsofcngfb  of  Paley's  work  a*  edited  by  Lloyd.  Two  previous  editions  were  greatly 
enlarged  by  the  notes  of  Lloyd  In  England,  and  of  Dunlap  In  this  country,  and  Mr.  Waterman  has  now  mad* 
numerous  Important  addenda,  introducing  act**  of  more  than  elghteea  hundred  relevant  ease*  decided  dot- 
ing the  nine  years  tbat  have  elapsed  sine*  the  publication  of  the  third  edition  by  Dunlap.  Mr.  Waterman's 
editorial  task  has  been  performed  with  the  same  thoroughness  and  ability  that  characterised  his  exc«U*n  t 


10  BANKS  &  BROTHERS' 

editions  of  Archbold's  Criminal  Pleadings  and  Evidence,  Adams  on  Ejectment,  Dart  on  Vendors,  Eden  on 
Injunctions,  Ac.,  and  his  valued  works  on  New  Trials,  and  on  the  Civil  Jurisdiction  of  Justices  of  the  Peace. 
He  displays  the  most  indefatigable  industry  in  research,  and  the  utmost  impartiality  and  discrimination  In 
the  application  of  new  decisions  and  judicial  dicta  to  the  modification  or  support  of  the  test  The  original 
work,  with  all  its  additions  by  previous  editors,  has  been  greatly  enriched  by  his  labors,  and  may  be  deemed 
a  complete  digest  of  the  law  of  principal  and  agent — a  branch  of  jurisprudence  which  is  here  of  the  highest 
Importance  and  most  frequent  utility.  The  elaborate  opinion  of  the  New  York  Court  of  Appeals,  in  the 
celebrated  case  of  the  New  York  Mechanics'  Bank  against  the  New  Haven  Eailroad  Company,  is  given  In 
full  In  the  appendix. 


EDEN  ON  INJUNCTIONS. 

Third  Edition.     Two  Vols.    Price  $10. 

A  TREATISE  ON  THE  LAW  OP  INJUNCTIONS.  BY  THE  HON.  ROBERT  HENRY  EDEN,  o» 
Lincoln's  Inn,  barrister  at  law.  Third  American,  from  the  last  London  edition  :  to  which 
are  added  copious  Notes  and  References  to  all  the  Decisions  of  the  Courts  of  the  United 
States,  and  of  the  different  States,  on  this  subject.  By  JACOB  D.  WHEELER,  counselor  at 
law.  A  new  edition,  by  JAMES  HAIG,  Esq.,  of  Lincoln's  Inn,  barrister  at  law.  American 
edition,  from  the  last  English,  by  WATERMAN,  containing  all  the  American  and  English  De- 
cisions to  the  present  time,  making  two  large  8vo.  vols. — a  complete  work  on  this  subject. 

EDWARDS'  CHANCERY  REPORTS.   ' 

Four  Vols.    Price  $20. 

REPORTS  OF  CHANCERY  CASES  DECIDED  IN  THE  FIRST  CIRCUIT  OF  THE  STATE  OF  NEW  YORK 
by  the  Hon.  William  T.  If  cCoun,  Vice-Chancellor.  By  CHARLES  EDWARDS,  counselor  at  law. 


EDWARDS  ON  BAILMENTS. 

Price  $4  50. 

A  TREATISE  ON  THE  LAW  OF  BAILMENTS.  BY  ISAAC  EDWARDS,  COUNSELOR  AT  LAW. 
Chapter  1 :  On  Bailments. — Chapter  2  :  On  Deposits. — Chapter  3 :  Gratuitous  Commissions 
or  Mandates. — Chapter  4:  Gratuitous  Loans. — Chapter  5  :  Pledges  or  Pawns. — Chapter  6: 
Contracts  for  Hire. — Chapter  7  :  Of  Innkeepers. — Chapter  8 :  Common  Carriers ;  Carriers 
of  Passengers.  The  above  chapters  are  very  full  and  complete. 

From  the  New  York  Evening  Post. 

"The  most  perfect  legal  treatise  in  the  English  language  was  written  upon  the  Law  of  Bailments,  many 
years  ago,  by  Sir  William  Jones.  No  subsequent  writer  has  been  able  to  do  more  than  apply  the  principles 
there  laid  down,  with  incomparable  clearness  and  elegance,  to  the  new  conditions  developed  by  the  progress 
of  human  society.  That  was  all  that  Judge  Story  was  able  to  do  for  his  generation,  and  that  is  all  that  Mr. 
Edwards  has  attempted  for  his;  unlike  his  immediate  predecessor,  however,  confining  himself  exclusively 
to  cases  arising  under  the  common  law,  without  reference  to  the  civil  law.  83?"  The  importance  of  the  Law 
of  Bailments,  and  the  variety  of  its  applications  to  the  affairs  of  life,  has  vastly  increased  since  the 
days  of  Sir  Wittiam  Jones,  and  even  since  Mr.  Story's  work  was  finished,  most  especially  in  regard  to 
the  carriage  of  freight  and  passengers  by  the  new  modes  of  [transportation  l>y  railroads  and  ^steam- 
vessels,  which  have  very  recently  come  into  general  use.  This  subject  is  very  fully  and  satisfactorily 
treated,  by  Mr.  Edwards,  under  the  head  of1  Common  Carriers,'1  and  '  Carriers  of  Passengers,''  which 
subject  occupies  about  200  pages  of  the  work.^jg$  The  reader  will  find  here  the  most  complete  collection 
of  adjudged  cases,  in  the  English  and  American  Courts,  upon  these  subjects,  that  has  ever  been  made." 


EDWARDS  ON  BILLS  OF  EXCHANGE  AND  PROMISSORY  NOTES. 

Price  $5  50. 

A  TREATISE  ON  BILLS  OP  EXCHANGE  AND  PROMISSORY  NOTES.  BY  ISAAC  EDWARDS, 
counselor  at  law. 

From  the  New  York  Journal  of  Commerce. 

The  materials  of  this  work  being  based  on  the  decisions  of  our  own  courts,  it  does  not  come  into  competition 
with  any  English  work  on  the  subject ;  nor  can  it  be  deemed  a  rival  of  anything  which  has  yet  appeared 
In  this  country.  The  object  has  been  to  ascertain  the  law  and  state  it  in  brief  terms,  with  such  illustrations 
as  seemed  calculated  to  develope  and  explain  the  reason  on  which  it  is  founded.  Estimating  the  importance 
of  the  subject  with  reference  to  the  amount  of  property  afloat  in  the  shape  of  bills  and  notes,  there  never 


11 


has  been  a  time  when  it  called  for  greater  accuracy  and  discrimination  than  now,  or  Invited  the  attention 
of  merchants  and  professional  men  with  equal  urgency. 

From  the  ,\Vic  York  Commercial  Adtertiter. 

As  the  latest  decision  la  deemed  the  highest  authority  in  legal  matters,  the  latest  treatise  or  digest  of 
cases  on  any  branch  of  the  law  must  be  of  the  greatest  value  to  practitioners,  provided,  of  course,  that  it 
be  faithfully  compiled  and  Judiciously  arranged.  These  requirements  being  met  by  the  volume  before  us, 
we  may  justly  recommend  Mr.  Edwards'  treatise  to  the  gentlemen  of  the  bar.  It  is  pre-eminently  an 
American  law  book,  Incorporating  the  substance  of  nearly  two  thousand  American  decisions  with  the  prin- 
ciples of  law  regarding  negotiable  paper  established  by  the  adjudications  of  the  English  Courts,  and  setting 
forth  In  notes  the  statutes  of  the  states  in  which  the  commercial  law  Is  not  adopted.  By  way  of  appendix,  a 
translation  is  given  of  that  part  of  the  Commercial  Code  of  France  relating  to  bills  of  exchange  and  prom- 
issory notes.  The  index  Is  very  minute,  and  will  enable  the  reader  to  find  in  a  moment  what  the  law  Is  on 
any  point  of  the  subject.  The  work  is  primarily  adapted  to  the  use  of  lawyers,  but  It  will  be  scarcely  lees 
useful  to  merchants  and  bankers. 


ELLIOTT'S  DIPLOMATIC  CODE. 

Two  Vols.    Price  $12. 

THB  AMERICAN  DIPLOMATIC  CODE,  EMBRACING  A  COLLECTION  OF  TREATIES  AND  CONYEK- 
tions  between  the  United  States  and  Foreign  Powers,  from  1778  to  1834 ;  with  an  abstract 
of  Important  Judicial  Decisions  on  Points  connected  with  our  foreign  Relations.  Also,  a 
Concise  Diplomatic  Manual,  containing  a  summary  of  the  Law  of  Nations,  from  the  works 
of  Wicquefort,  Vattel,  Martens,  Ward,  Kent,  Story,  Ac.,  4a,  and  other  Diplomatic  Writings 
on  Questions  of  International  Law,  useful  for  Public  Ministers  and  Consuls,  and  for  all  others 
having  official  or  commercial  intercourse  with  Foreign  Nations.  By  JONATHAN  ELLIOTT. 

ENGLISH  CHANCERY  REPORTS. 

Forty-three  American  Vols.    Price  $165. 

THESE  VERT  VALUABLE  AND  IMPORTANT  DECISIONS  ARE  REPUULISHED  verbatim  FROM  THB 
London  copy,  with  notes  and  references  to  English  and  American  Authorities.  By  JOHN  A. 
DUNLAP,  and  continued  by  the  Hon.  E.  F.  SMITH,  J.  L.  HANES,  and  N.  HOWARD,  Jr. ;  being 
the  Reports  of  Cases  argued  and  determined  in  the  High  Courts  of  Chancery,  the  Rolls  Court 
and  the  Vice-Chancery  Courts  of  England. 

62  English  Volumes  contained  hi  43  American,  but  without  any  condensation.    The  first 
18  American  contain  3G  English,  or  2  English  to  one  American.     They  have  each  an  index, 
and  can  be  bound  separately.     This  is  the  only  series  without  condensation. 
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<    1C  A  HAITI  AND  WATERMAN  ON  NEW  TRIALS. 

Second  Edition.     Three  Volt.    Price  $16. 
A  TREATISE  QS  THB  PRINCIPLES  or  LAW  AKD  EQUITY  WHICH  GOYIRN  COURTS  i»  THB 


12  BANKS  &  BROTHERS' 

granting  of  New  Trials,  in  Cases  Civil  and  Criminal.    With  copious  Notes  and  References 
to  the  American  and  English  Decisions.    By  GRAHAM  &  WATERMAN. 
From  the  N~eio  York  Commercial  Advertiser. 

"There  is  no  title  in  the  law  on  which  a  new  and  copious  treatise  was  more  needed  by  practitioners  tham 
on  New  Trials.  When  David  Graham  published  his  treatise  in  1384,  it  was  welcomed  by  the  profession 
almost  as  a  godsend,  for  it  cultivated  an  important  field  which  Grant  in  his  '  Summary,'  and  Morgan  in  his 
'  Essay,'  had  barely  skimmed  over.  The  death  of  Mr.  Graham  unfortunately  prevented  him  from  revising  and 
preparing  a  second  edition  of  his  work ;  for  some  years  it  has  been  out  of  print,  and  although  so  highly 
estec  med  that  sums  considerably  beyond  the  original  cost  have  been  offered  for  copies,  the  publishers  have 
delayed  th«  publication  of  a  second  edition  until  now.  This  edition  has  been  revised  and  corrected  with 
great  car*,  and  is  improved  by  a  full  analysis  of  each  chapter,  which  much  facilitates  consultation.  Mr. 
Graham's  treatise  comprises  one  volume  of  630  pages.  It  is  the  text,  as  it  were,  of  Mr.  Waterman's  more 
copious  commentary,  which  is  an  entirely  new  treatise  of  nearly  1,700  pages,  forming  Volumes  II  and  III, 
of  the  complete  work,  to  be  hereafter  known  as  Graham  and  Waterman  on  New  Trials.  The  whole  body 
of  the  American  and  English  decisions,  the  reports  of  the  courts  of  every  State  in  the  Union,  and  the  reports 
of  every  court  in  Great  Britain,  have  been  sifted,  and  all  the  cases  pertinent  to  the  theme  carefully  analyzed, 
for  the  purposes  of  this  work.  Nearly  a  thousand  cases  are  cited  in  the  first  volume  by  Graham,  while  in 
the  second  and  third  volumes  by  Waterman  the  number  of  cases  quoted  exceeds  three  thousand  eight  hun- 
dred, making  in  all  nearly  five  thousand  cases,  collected  and  arranged  in  one  systematic  work.  We  think 
it  may  fairly  be  said  to  exhaust  the  subject. 

"  Mr.  Graham's  treatise  having  long  been  a  text-book  in  the  hands  of  the  profession,  it  would  be  superfluous 
to  speak  minutely  of  its  contents.  Mr.  Waterman  opens  his  part  of  the  work  with  a  general  view  of  the 
subject  of  trial  by  jury,  and  of  the  ancient  and  modern  methods  of  correcting  a  wrong  verdict.  It  appears 
that  'anciently,  the  principal  remedy  for  reversing  a  verdict,  improperly  given,  was  by  writ  of  attaint  The 
inquiry  was  made  by  a  jury,  double  the  number  of  those  who  rendered  the  alleged  false  verdict,  and  if  they 
found  the  verdict  a  false  one,  the  judgment  by  the  common  law  was,  that  the  jurors  should  become  in  - 
famous  ;  should  forfeit  their  goods,  and  the  profits  of  their  lands ;  should  themselves  be  imprisoned,  and 
their  wives  and  children  thrown  out  of  doors ;  should  have  their  houses  razed,  their  trees  extirpated,  and 
their  meadows  ploughed;  and  that  the  plaintiff  should  be  restored  to  all  that  he  lost  by  reason  of  the  un- 
just verdict.  A  law  so  terribly  severe  could  not  be  executed,  and  by  subsequent  statutes,  which  were  made 
perpetual  by  13  Eliz.  c.  25,  the  punishment  was  diminished  to  perpetual  infamy  and  a  pecuniary  fine.'  Ac- 
cording to  Blackstone,  '  there  are  instances  in  the  year  books,  in  the  reigns  of  Edward  111,  Henry  IV,  and 
Henry  VII,  of  judgments  being  stayed,  even  after  a  trial  at  bar,  and  new  venires  awarded,  because  the  jury 
had  eat  and  drank  without  the  consent  of  the  judge,  and  because  the  plaintiff  had  privately  given  a  paper 
to  a  juryman  before  he  was  sworn.'  And  upon  these  the  Chief  Justice  Glynn,  in  1655,  grounded  the  first 
precedent  that  is  reported  in  our  books  for  granting  a  new  trial  upon  account  of  excessive  damages 
given  by  the  jury;  apprehending,  with  reason,  that  notorious  partiality  in  the  jurors  was  a  principal 
species  of  misbehavior. 

"  In  the  chapter  following  the  historical  view  from  which  we  extract  these  antiquities,  Mr.  Waterman  dis- 
MMOfl  the  jurisdiction  of  courts  in  granting  new  trials ;  and  in  succeeding  chapters  he  considers  in  detail 
the  various  causes  for  granting  such  relief;  for  example, — want  of,  or  insufficient,  notice  of  trial ;  defects  in 
the  summoning  and  drawing  of  jurors;  disqualification  of  jurors,  from  interest,  relationship,  conscientious 
scruples,  age,  alienage,  mental  or  bodily  disease,  &c.;  tampering  with  the  jury;  bias  or  hostility  of  jurors  ; 
misconduct  of  the  jury ;  misruling  or  misdirection  of  the  judge;  surprise;  newly  discovered  evidence ;  ex- 
cessive or  inadequate  damages;  verdict  against  law  or  evidence,  &o. ;  and  the  concluding  chapter  is  de- 
voted to  the  consideration  of  the  principles  by  which  courts  of  equity  are  governed  in  granting  new  trials. 

"  The  time  and  labor  expended,  in  compiling  a  work  so  comprehensive  and  elaborate,  must  have  been 
very  great,  and  can  scarcely  fall  to  be  appreciated  by  the  profession.  In  truth,  the  work  will  henceforth  be 
an  Indispensable  part  of  the  library  of  every  lawyer  who  practices  In  courts  of  record  in  any  State  of  the 
Union.  It  Is  also  probable  that  it  will  be  reprinted  in  England,  where,  as  well  as  here,  it  is  unrivaled." 


HILL'S  REPORTS. 

Seven  Vols.    Price  $28. 

REPORTS  OF  CASES  ARGUED  AND  DETERMINED  IN  THE  SUPREME  COURT,  AND  IN  THE 
Court  for  the  Correction  of  Errors  of  the  State  of  New  York.  By  NICHOLAS  HILL,  Jun., 
counselor  at  law,  and  continuation  of  Johnson,  Cowen  and  Wendell. 

IIIJLM  AUI>  ON  REAL  ESTATE. 

Third  Edition.     Two  Vols.    Price  $11. 
VEBT  MUCH  ENLARGED,  WITH  NOTES  AND  REFERENCES  BY  TUB  AUTHOR. 


LAW  PUBLICATIONS.  13 

IIOFF.TI  A>'-S  <  II.l  >«  KK  Y  REPORTS. 

Second  Edition.     Price  f  5. 

REPORTS  or  CASES  DECIDED  IN  THE  FIRST  CIRCUIT  or  THE  STATS  or  NEW  YORK.  THIS 
rolume  of  reports  was  carefully  revised  by  Judge  HOFFMAN,  and  partially  annotated  by  him. 
The  annotation  was  afterwards  completed  by  a  member  of  the  New  York  bar.  It  Ihil  bo 
found  a  valuable  acquisition  to  every  lawyer's  library. 

HOFFMAN'S  LEtiAL  STUDY. 

Two  Volt.    Price  $5. 

A  COURSE  OP  LEGAL  STUDY,  ADDRESSED  TO  STUDENTS,  AND  THE  PROFESSION  GENERALLY. 
By  DAVTD  HOFFMAN,  Jun.,  Utr.  Doct  Gottingen.  Second  edition,  rewritten  and  much  enlarged. 

HOPKINS'  CHANCERY  REPORTS. 

Price  $5. 

REPORTS  OF  CASES  ARGUED  AND  DETERMINED  IN  THE  Cocar  or  CHANCERY  OF  THB 
State  of  New  York.  By  SAMUEL  HOPKINS,  counselor  at  law,  *nd  successor  of  Johnson, 
if.  Sandford,  Chancellor. 


HOWARD'S  CODE. 

920  Pages.     Price  $6. 

THE  CODE  OF  PROCEDURE  OF  PLEADINGS  AND  PRACTICE  OF  THE  STATE  OP  NEW  YORK, 
1858-9,  with  complete  Notes  and  References.  By  N.  HOWARD,  Jr.,  counsellor  at  law. 

This  work  contains  the  Code  of  Procedure  as  it  was  settled  in  1868,  with  a  Supplementary 
Chapter  containing  the  amendments  of  1859.  It  also  contains  the  latest  rules  of  the  Courts, 
with  a  copious  Index  to  the  whole  work.  The  notes  of  the  decisions  of  the  Courts,  to  the  several 
sections  of  the  Code,  contain  the  most  recent  decisions  and  are  very  full.  The  book  constitute* 
a  work  on  Practice  and  Pleadings,  Ac.,  which  every  lawyer  and  every  justice  of  the  peace 
should  possess. 

"Mr.  Howard  has  added  largely  to  his  reputation  by  this  Code.  He  has  been  identified 
with  the  Code  since  its  formation,  and  has  had  much  experience  in  its  practice,  having  re- 
ported sixteen  volumes  of  Practice  Reports,  and  they  have  met  the  approval  of  the  Judges 
and  Profession  at  large.  His  great  familiarity  with  points  of  practice  and  the  Code  wfll  give 
this  work  such  an  advantage  that  no  other  work  can  obtain.  This  volume  will  be  found  of 
great  value  and  service,  as  it  contains  the  very  latest  amendments  and  decisions  to  date." 


HOWARD'S  PRACTICE  REPORTS. 

Sixteen  Vols.     Price  $66. 

REPORTS  OF  CASES  ARGUED  AND  DETERMINED  IN  THE  SUPREME  COURT,  AT  SPECIAL  TERM, 
with  the  Points  of  Practice  decided,  from  October  Term,  1844,  to  May,  1868.  By  NATHAN 
HOWARD,  Jun.,  counselor  at  law. 

Howard's  Practice  Reports  are  especially  interesting  and  useful,  OB  account  of  their  being 
the  main  and  almost  exclusive  exponents  of  the  New  York  Practice  under  the  constitution 
of  1846,  and  Code  of  Procedure.  Other  similar  publications  there  have  been,  but  their  ex- 
istence has  been  of  a  comparatively  short  duration,  while  Mr.  HOWARD  has  pursued  the  even 
tenor  of  his  way,  giving  to  the  public,  regularly  and  undoviatingly,  the  decisions  of  the  courts 
from  the  year  1844  to  the  present  time.  It  may  therefore  be  said  unhesitatingly  thai  this  is 
the  only  reliable  series  of  reports  upon  the  New  York  Practice.  They  have  an  established 
reputation  and  are  received  as  authority  in  all  our  courts.  They  will  be  found  very  useful 
in  states  having  a  similar  Code  to  that  of  New  York. 

HUMPHREYS'  PRECEDENTS. 

Two  Vols.    Price  $8. 
A  COLLECTION  OF  PRACTICAL  FORMS  vx  SUITS  AT  LAW;   ALSO  PRECEDE>TS  or  CON- 


14  BANKS  &  BROTHERS' 

tracts,  Conveyances,  "Wills,  &c. ;  and  Proceedings  under  the  Pension,  Patent  and  Naturaliza- 
tion Laws  of  the  United  States,  with  Annotations  and  References.  By  CHARLES  HUMPH- 
REYS, counselor  at  law. 


JOHNSON'S  CASE?. 

Second  Edition.     Three  Vols.    Price  $12. 

REPORTS  OP  CASES  ADJUDGED  IN  THE  SUPREME  COURT  OP  JUDICATURE  OF  THE  STATE  OP 
New  York,  from  January,  1799,  to  1803,  inclusive,  together  with  cases  determined  in  the 
Court  for  the  Correction  of  Errors,  during  that  period.  A  second  edition.  "With  many  ad- 
ditional cases  not  included  in  the  former  edition,  taken  from  the  manuscript  notes  of  the 
late  Hon.  Jacob  Radcliff,  one  of  the  Judges  of  the  Supreme  Court,  and  associated  with  the 
Hon.  Morgan  Lewis,  James  Kent  (since  Chancellor  of  the  State),  Egbert  Benson,  John 
Lansing,  Brockholst  Livingston  and  Smith  Thompson  (the  two  latter  were  subsequently 
appointed  Judges  of  the  Supreme  Court  of  the  United  States).  With  copious  Notes  and 
References  to  the  American  and  English  Decisions.  The  writ  of  mandamus  has  been  treated 
of  fully  in  Volume  II  of  these  reports,  and  references  to  the  cases  in  it  have  been  introduced, 
together  with  a  complete  collection  of  forms  and  precedents  not  found  elsewhere.  By 
LORENEO  B.  SHEPPARD,  counselor  at  law. 


JOHNSON'S  CHANCERY  REPORTS. 

Second  Edition.     Seven  Vols.    Price  $32. 

REPORTS  OF  CASES  ADJUDGED  IN  THE  COURT  OP  CHANCERY  OF  NEW  YORK.  BY  WILLIAM 
JOHNSON,  counselor  at  law.  Containing  the  Cases  from  March,  1814,  to  December,  1823, 
inclusive.  With  a  General  Digested  Index  of  the  Cases  decided  and  reported  ha  the  Court 
of  Chancery,  and  in  the  Court  for  the  Correction  of  Errors,  on  Appeal,  from  1799  to  1822, 
inclusive,  with  a  Table  of  the  names  of  the  Cases,  and  of  the  Titles  and  References.  James 
Kent  was  Chancellor  during  the  above  reports. 


JOHNSON'S  REPORTS. 

Third  Edition.     Twenty  Vols.    Price  $60. 

REPORTS  OP  CASES  ARGUED  AND  DETERMINED  IN  THE  SUPREME  COURT  OF  JUDICATURE 
and  in  the  Court  for  the  Trial  of  Impeachments  and  the  Correction  of  Errors  in  the  State  of 
New  York.  By  WILLIAM  JOHNSON,  counselor  at  law.  With  additional  Notes  and  Refer- 
encea  James  Kent,  Chief  Justice. 


KERNAN'S  REPORTS. 

Vols.  2,  3  and  4.    Price  $6. 

REPORTS  OP  CASES  ARGUED  AND  DETERMINED  IN  THE  COURT  OF  APPEALS  OF  THE  STATE  or 
New  York,  with  Notes,  References  and  an  Index,  from  1854  to  1856  inclusive.  By  FRAK- 
ois  KERNAN,  counselor  at  law. 


LAMBERT  ON  DOWER. 

Price  $1. 

A  TREATISE  ON  DOWER,  COMPRISING  A  DIGEST  OF  THE  AMERICAN  DECISIONS  AND  THE 
Provisions  of  the  Revised  Statutes  of  the  State  of  New  York.    By  ELI  LAMBERT. 


LAW  OF  FIXTURES. 

Second  Edition.    Price  $3. 

A  TREATISE  ON  THE  LAW  OP  FIXTURES  AND  OTHER  PROPERTY  PARTAKING  BOTH  OF  A  REAL 
and  Personal  Nature ;  comprising  the  Law  relating  to  Annexations  to  the  Freehold  in  gene- 
ral ;  as  also,  Emblements,  Charters,  Heir-Looms,  etc.,  with  an  Appendix,  containing  prac- 
tical rules  and  directions  respecting  the  Removal,  Purchase,  Valuation,  etc.,  of  Fixtures 


LAW  PUBLICATIONS.  15 

between  Landlord  and  Tenant,  and  between  Outgoing  and  Incoming  Tenants.  By  A.  AMOS, 
Esq.,  and  J.  FKRARD,  Esq.,  barristers  at  law,  with  copious  Notes  and  References  to  all  th« 
English  Cases  to  the  time  of  publishing  (1847),  by  JOSEPH  FERARD,  Esq.,  barrister  at  law. 
The  Second  American  Edition,  from  the  last  English,  will  contain  all  the  cases  decided,  in 
the  Courts  of  Law  of  the  United  States  and  the  Courts  of  the  several  States,  on  the  subject 
to  the  present  time.  With  a  Digest  of  the  Statute  Laws  of  the  several  States  relating  to 
the  subject.  By  WILLIAM  1 1m ;  AN,  counselor  at  law. 


LOCKWOOD'S  REVERSED  CASES. 

Price  $4. 

AN  ANALYTICAL  AND  PRACTICAL  SYNOPSIS  OF  ALL  THE  CASES  ARGUED  AND  REVERSED  is 
Law  and  Equity,  in  the  Court  for  the  Correction  of  Errors  of  the  State  of  New  York,  from 
1799  to  1847 ;  with  the  names  of  the  Cases,  and  a  Table  of  the  Titles,  Ac.  By  RALPH 
LOCK  WOOD,  counselor  at  law. 


LUBE'S  EQUITY  PLEADING. 

Second  Edition.    Price  $3. 

AN  ANALYSIS  OF  TOE  PRINCIPLES  OF  EQUITY  PLEADING,  CONTAINING  A  COMPENDIUM  OF 
the  Practice  of  the  High  Court  of  Chancery,  and  the  Foundation  of  the  Rules,  together 
with  an  Illustration  of  the  Analogy  between  Pleadings  at  Common  Law  and  Equity.  By 
D.  G.  LUBE,  of  Lincoln's  Inn,  barrister  at  law.  Second  American,  from  the  last  London 
edition.  With  Notes  and  References  to  American  Cases.  By  J.  D.  WHEELER,  counselor 
at  law. 


nATHEWS'  PRESUMPTIVE  EVIDENCE. 

Price  $3. 

A  TREATISE  ON  THE  DOCTRINE  OF  PRESUMPTION  AND  PRESUMPTIVE  EVIDENCE,  AS  AFFECT- 
mg  the  title  to  Real  and  Personal  Property.  By  JOHN  H.  MATHEWS.  of  Lincoln's  Ina, 
barrister  at  law.  With  Notes  and  References  to  American  Cases.  By  BENJAMIN  RAND. 

The  American  editor  has  aimed  to  note  all  the  cases  which  have  occurred  in  the  Amer- 
ican courts,  wherein  any  of  the  doctrines  or  principles  contained  in  the  original  text  have 
been  discussed,  and  such  English  cases  as  have  been  published  since  the  work  of  Mr. 
Mathews  came  from  the  press.  'In  doing  this  he  has  thought  it  would  best  comport  with  the 
plan  of  the  original  work,  to  refer  to  the  cases  merely,  rather  than  to  swell  the  marginal 
notes  with  extracts,  which  would  in  most  instances  bo  but  a  repetition  of  the  doctrines  con- 
tained in  the  text 


JIcC  ALL'S    FORKS. 

Second  Edition,  Enlarged  and  Improved.     Price  $3. 

PRECEDENTS,  OR  PRACTICAL  FORMS  IN  ACTIONS  AT  LAW,  IN  THE  SUPREME  COURT  OF 
the  State  of  New  York ;  the  Superior  Court  and  Court  of  Common  Pleas,  for  the  city  of  New 
York,  adapted  to  the  Code  and  rules  of  1858,  and  to  the  practice  of  states  having  a  similar 
Code;  partition  of  infants'  estate;  sale  of  infants'  estate;  admeasurement  of  dower;  fore- 
closure by  advertisement ;  determination  of  claims  to  real  estate,  and  appeals  from  Surro- 
gates' Courts.  By  S.  McCALL,  counselor  at  law. 

After  the  New  York  Code  came  into  operation,  the  publishers  of  the  above  work  were 
frequently  applied  to,  by  members  of  the  bar,  from  every  section  of  the  state,  for  a  manual 
of  forms  which  should  embrace  the  whole  field  of  practice,  and  not  be  confined,  as  most 
similar  works  are,  to  the  pleadings.  In  1852,  they  had  the  pleasure  of  satisfying  this  want, 
by  the  production  of  the  very  useful  book  of  Mr.  McCALL;  which  proved  entirely  reliable, 
although  at  that  time  the  Code  had  been  but  recently  adopted,  and  there  were,  in  conse- 
quence, but  few  decisions  defining  and  construing  it  Subsequent  amendments  of  the  Code, 


16  BANKS  &  BROTHERS' 

however,  rendered  a  change  in  the  phraseology  and  scope  of  some  of  the  forms  necessary. 
These  changes  have  been  made  in  this  edition ;  and  the  work  has  been  carefully  revised, 
and  enlarged  by  the  introduction  of  one  hundred  and  twenty-five  new  forms.  It  now  covers 
the  whole  range  of  practice,  from  a  simpk  affidavit  to  the  most  technical  special  proceeding.  The 
forms  selected  are  such  as  have  been  used  by  leading  practitioners,  and  obtained  the  approval  of 
the  higher  courts. 

In  those  states  which  have  a  Code  similar  to  that  of  New  York,  this  work  will  be  found 

a  convenient  and  safe  guide. 

from  the  Buffalo  Morning  Express. 

This  book  of  forms  Is  already  somewhat  familiar  to  the  legal  profession.  The  numerous  radical  changes 
which  were  instituted  by  the  Code  of  1848  have  called  forth  a  very  large  number  of  works  on  practice  and 
pleadings,  many  of  which  are  of  partial  compilation,  and  therefore  inaccurate,  and  many  of  which  have 
become  obsolete  by  the  numerous  amendments  which  have  been  made  in  the  Code  itself,  as  well  as  in 
the  rules  that  govern  the  practice.  "Whatever  opinions  may  exist  in  regard  to  the  wisdom  of  thus  sweeping 
away  at  once  all  the  forms  which  had  become  familiar  by  age  and  venerated  by  custom,  there  can  be  no 
doubt  that  much,  that  was  useless  as  well  as  a  hindrance  to  the  administration  of  justice,  has  been  dispensed 
with,  rendering  it  necessary  In  the  main  to  rebuild  the  system  almost  entirely — a  work  which  requires  years 
of  labor  before  it  may  arrive  at  any  degree  of  perfection.  The  book  before  us  is  intended  to  provide  a  set 
of  forms  for  nearly  every  emergency,  and  the  experience  of  every  legal  practitioner  bears  witness  to  the 
convenience  of  having  at  hand  a  work  of  approved  precedents.  The  present  edition  is  much  enlarged  and 
improved,  corrected  and  adapted  to  the  existing  rules  of  practice.  One  hundred  and  twenty-five  forms 
have  been  added,  and  the  publishers  confidently  recommend  It  as  the  most  complete  and  valuable  collection 
DOW  In  use. 


NEWBERRY'S  ADMIRALTY  REPORTS. 

Price  $5. 

NEWBERRY'S  ADMIRALTY  REPORTS  OF  CASES  ARGUED  AND  ADJUDGED  IN  THE  DISTRICT 
Courts  of  the  United  States,  for  the  District  of  Michigan,  Northern  District  of  Ohio.  Southern 
District  of  Ohio,  Western  District  of  Pennsylvania,  Northern  District  of  Illinois,  District  of 
Missouri,  and  Eastern  District  of  Louisiana,  from  1S42  to  1857.  By  JOHN  S.  NEWBERRY,  of 
the  Detroit  Bar. 

Judged  Names. — HON.  Ross  WILKINS,  HON.  H.  V.  WILLSON,  HON.  H.  H.  LEAVTTT,  Horn. 
T.  IRWIN,  HON.  THOMAS  DRUMSIOND,  HON.  ROBERT  WELLS,  HON.  THOMAS  H.  MCCALEB. 

From  the  National  Law  Reporter, 

It  is  a  singular  fact  that,  up  to  the  time  of  the  publication  of  the  present  volume,  no  authentic  reports 
have  been  published  of  the  decisions  of  the  federal  courts  in  the  important  and  somewhat  peculiar  cases 
arising  in  the  districts  bordering  on  the  great  lakes  and  rivers  of  the  west  and  south.  The  preservation  of 
these  decisions  and  their  publication  in  an  authentic  form  entitle  the  reporter  and  his  publishers  to  the 
thanks  and  to  the  support  of  every  practitioner  in  the  wide  region  of  country  named. 

It  needs  no  commendation  on  our  part,  to  induce  any  lawyer,  practicing  in  the  district  courts  in  the  states 
bordering  on  our  great  "  inland  seas  "  and  rivers,  to  procure  these  reports,  for  few  could  well  do  without  them. 

The  cases  are  well  reported,  and  the  volume  is  printed  and  bound  in  the  best  style  of  its  enterprising 

publishers. 

From  the  New  York  Commercial  Advertiser. 

There  are  reported  In  this  volume  more  than  a  hundred  admiralty  cases  which  have  been  argued  and  ad- 
judged during  the  last  fifteen  j'ears  by  the  United  States  district  courts  for  Michigan,  northern  and  southern 
Ohio,  western  Pennsylvania,  northern  Illinois,  Missouri,  and  eastern  Louisiana — Judges  "Wilkins,  "Willson, 
Lcavitt,  Irwin,  Drummond,  "Wells  and  McCaleb.  The  reporter  is  a  member  of  the  Detroit  bar,  and  we  notice 
that  there  are  very  few  of  the  Michigan  cases  enumerated  in  which  his  name  does  not  appear  as  counsel. 
The  navigation  of  the  great  northern  lakes  and  the  Mississippi  river  has  given  rise  to  a  great  mass  of  litiga- 
tion involving  novel  and  important  questions  of  admiralty  jurisprudence,  and  these  reports  will  be  of  much 
interest  and  value  to  the  legal  profession  everywhere.  We  notice  two  or  three  peculiarities  of  western 
steamboat  navigation  which  may  be  Interesting  to  laymen.  The  drawing  a  boat  off  when  aground  is  a  com- 
mon act  of  courtesy  among  steamboats,  for  which  no  claim  for  salvage  is  ever  asserted.  (The  Steamboat 
T.  B.  Leathers  ads.  Montgomery,  421.)  "Where  two  steamboats  are  meeting  on  the  Mississippi  river  and 
there  Is  danger  of  collision,  it  is  the  duty  of  the  descending  boat,  as  a  general  rule,  to  ring  her  bell  and  shut 
off  her  steam,  and  it  is  the  duty  of  the  ascending  boat  to  do  the  maneuvering.  (The  Georgia  and  Dresden, 
474.)  The  general  rules  of  navigation  of  the  Mississippi  and  the  law  of  Louisiana  require  a  descending 
steamboat  to  keep  the  middle  of  the  river.  "When  a  boat  ascending  on  the  right  bank  signals  a  boat  de- 
scending, by  two  taps  on  her  bell,  it  signifies  that  she  intends  keeping  to  the  larboard.  (TJte  Steamboats 
Pearl  and  Natchez,  489.) 


LAW  PUBLICATIONS.  17 

NEW     TORK     DIGEST. 

Fvur  Fob.    Price  $16  50. 

A  DIGEST  or  THE  REPORTS  or  CASES  DETERMINED  IN  THE  SUPREME  COURT  OF  JUDICATURE 
and  the  Court  for  the  Correction  of  Errors  of  the  State  of  New  York.  Together  with  the 
Reported  Cases  of  the  Superior  Court  for  the  city  and  county  of  New  York,  from  the  organ- 
ization of  said  Courts;  including  Coleman's  Cases;  Caines'  Reports,  3  vols;  Games'  Casea 
in  Error,  2  vols. ;  Johnson's  Cases,  3  vols. ;  Johnson's  Reports,  20  vols.;  Co  wen's  Reports, 
9  vols. ;  Wendell's  Reports,  26  vols. ;  Hill's  Reports,  7  vols.;  Denio's  Reports,  5  vols. ;  Bar- 
hour's  Law  Reports,  4  vols. ;  Comstock's  Reports,  1  voL ;  Hall's  Reports,  2  vols. ;  Sandford's 
Reports,  1  voL;  and  Anthon's  Nisi  Prius,  Revised  and  continued  to  the  present  time.  By 
WM.  HOOAN,  counselor  at  law. 

From  0i«  lion.  Rxrnx  II.  WALworm. 

I  have  examined  Mr.  Hogan's  edition  of  the  New  York  Digest,  originally  prepared  by  Thomas  W.  Clerke. 
Esq.  This  new  edition  of  the  work,  revised  and  continued  to  the  present  time,  by  one  of  onr  most  Indus- 
trious and  intelligent  lawyers,  appears  to  have  been  most  faithfully  prepared,  and  will  undoubtedly  be  of 
great  ralae  to  the  profession. 

from  the  American  Lav  Journal. 

This  largo  and  valuable  work,  although  stated  In  the  title-page  to  be  contained  tn  two  volumes.  In  reality 
extends  to  four  '>ny  royal  octavo  volumes.  The  first  two  volumes  contain  1881  pages,  and  the  last  two 
nearly  1300,  making,  in  the  whole  work,  over  2800  pages.  The  Digest  contains  the  points  decided,  as  re- 
ported In  Coleman's  Cases,  Caines'  Reports,  8  vols.,  Caines'  Cases  In  Error,  2  vols.,  Johnson's  Cases,  8  vols., 
Johnson's  Reports,  20  vols.,  Cowen's  Reports,  9  vols.,  Wendell's  Reports,  26  vols.,  Hill's  Reports,  T  vols., 
Denlo'a  Reports,  5  vols ,  Harbour's  Law  Reports,  4  vols.,  Comstock's  Reports,  1  vol.,  Hall's  Reports,  2  vols. , 
S.-ind  ford's  Reports,  1  voL,  and  Anthon's  Nisi  Prins.  It  embraces  a  revlsal  of  the  former  edition  of  Mr. 
Clerke,  with  such  modifications  as  seemed  needful ;  and  also  a  digest  of  the  many  volumes  which  have  been 
published  since  that  was  issued  from  the  press,  Including  part  of  Hill's  Reports  and  all  of  Harbour  and 
Denlo  and  Bandford  and  Comstock. 

The  limits  of  state  jurisdiction  do  not  circumscribe  the  Influence  and  usefulness  of  a  Digest  of  this  descrip- 
tion. It  Is  practically  a  digest  of  the  common  law,  and  of  the  construction  of  a  large  body  of  the  statute 
law,  either  of  direct  application  or  of  apposite  illustration,  in  every  state  In  the  Union. 

Since  the  publication  of  a  recent  edition  of  Phillipps  on  Evidence,  by  the  same  enterprising  publishers,  we 
have  not  examined  a  work  of  equal  value  to  the  Digest  now  before  us.  We  are  far  from  limiting  our  re- 
searches to  Digests,  however  carefully  prepared ;  but  as  an  index  to  point  the  way  to  the  sources  of  knowl- 
edge, the  present  edition  of  the  New  York  Digest  will  save  to  the  legal  practitioner  a  great  amount  of 
intellectual  toll  and  physical  exertion.  We  cordially  recommend  it  to  the  profession. 


PAIGE'S  CHANCERY  REPORTS. 

Nine  Vol&    Price  $45. 

REPORTS  or  CASES  ARGUED  AND  DETERMINED  i>-  THE  COURT  OF  CHAKCERY  or  TOE  STATS 
of  New  York.  By  ALONZO  C.  PAIGH,  counselor  at  law,  and  successor  of  Hopkins.  Chan- 
cellor and  Vice-Chancellors  of  the  State  of  New  York,  during  the  time  of  these  Reports : 
Reuben II.  Walworth,  Chancellor.  Vice-Chancellors : —First  Circuit; — William  T.  McCoun, 
Murray  Hoffman,  Lewis  H.  Sandford.  Second  Circuit ; — Charles  H.  Ruggles.  Third  Cir- 
cuit:— John  P.  Cushman,  Amasa  J.  Parker.  Fourth  Circuit:  John  Willard.  Fifth  Cir- 
cuit : — Philo  Gridloy.  Sixth  Circuit : — Robert  MonelL  Seventh  Circuit : — Daniel  Moseley, 
Bowen  Whiting.  Eighth  Circuit : — Frederick  Whittlesey. 

PAIXE'S  CIRCUIT  COURT  REPORTS. 

Two  FoJiL    Price  $11. 

REPOBTS  or  CASES  AROUED  AND  DETERMINED  is  THE  CIRCUIT  COURT  or  THE  UNITED 
States  for  the  Second  Circuit,  comprising  the  Districts  of  New  York,  Connecticut  and  Ver- 
mont By  ELIJAH  PAINE,  Jun.,  late  one  of  the  Justices  of  the  New  York  Superior  Court 
These  volumes  of  reports  contain  a  choice  collection  of  cases  taken  from  the  manuscript 
decisions  of  the  Hon.  Brockholst  Livingston,  Win.  P.  Van  Ness,  Smith  Thompson,  John 
Jay  and  James  M.  Wayne,  from  the  year  1810  to  1840,  made  in  the  Second  Circuit  of  the 
United  States  Court,  and  not  to  be  found  elsewhere. 

2 


18  BANKS  A  BROTHERS' 

PARKER'S  CRIMINAL,  REPORTS. 

Two  Vols.    Price  $8  50. 

REPORTS  OF  DECISIONS  IN  CRnmfAL  CASES  MADE  AT  TERM,  AT  CHAMBERS,  IK*  THE  COURTS 
of  Oyer  and  Tenniner  of  the  State  of  New  York.  By  AM  ASA  J.  PARKER. 

The  want  of  criminal  reports  has  long  been  seriously  felt.  Very  few  decisions  have  found 
their  way  into  the  Supreme  Court  reports.  The  necessity  for  such  reports  is  as  obvious  and 
as  urgent  as  is  that  which  has  led  so  universally  to  the  reporting  of  decisions  in  civil  con- 
troversies. This  want  is  being  most  ably  supph'ed  by  AMASA  J.  PARKER,  Esq,  one  of  the 
judges  of  the  New  York  Supreme  Court,  in  the  series  of  criminal  reports  now  being  issued 
by  him.  No  one  better  qualified  than  he  could  have  undertaken  the  task,  and  his  position 
as  judge  affords  him  unusual  facilities,  not  only  in  obtaining  the  most  important  cases,  but 
also  in  acquiring  correct  information  relative  to  them.  These  reports  are  destined  to  take 
the  highest  rank  among  similar  publications.  The  volumes  already  published  contain  many 
cases  of  great  interest  and  value.  "We  would  especially  call  attention  to  The  People  v.  Thurs- 
ton,  and  The  People  v.  Robinson,  in  the  second  volume.  Every  magistrate  and  district  attor- 
ney, and  every  lawyer  practicing  in  criminal  courts,  should  obtain  Parker's  Reports  without 
delay. 


PHILLIPPS  ON  EVIDENCE;. 

Fourth  Edition.     Three  Volumes.    Price  $18. 

A  treatise  on  the  Law  of  Evidence.  In  three  volumes,  with  Notes  of  ESEK  COWEN,  formerly 
oae  of  the  Judges  of  the  Supreme  Court  of  the  State  of  New  York ;  assisted  by  NICHOLAS 
HILL,  JR.,  counselor  at  law,  and  late  State  Reporter.  With  additional  Notes  and  Refer- 
ences to  the  English  and  American  Cases  to  the  present  time,  by  J.  MARSDEN  VAN  COTT, 
counselor  at  law.  Fourth  Edition,  by  ISAAC  EDWARDS,  counselor  at  law,  author  of  "Ed- 
wards on  Bailments,"  and  "Edwards  on  Bills  and  Promissory  Notes." 

This  edition  comprises  the  whole  of  the  English  text,  and  Cowen  &  Hill's  and  Van  Cotfg 
notes.  The  whole  work  has  been  rearranged  and  rewritten,  and  a  great  number  of  new  and 
valuable  notes  added. 

Every  precaution  has  been  taken  to  render  the  present  edition  of  this  work  superior  to  any 
that  has  been  published  upon  the  subject.  Particular  attention  has  been  paid  to  the  indexes 
and  table  of  cases,  to  have  them  full  and  accurate. 

Notwithstanding  numerous  treatises  on  the  Law  of  Evidence,  the  work  of  Mr.  Phillippa 
maintains  an  extraordinary  pre-eminence.  In  England  it  has  passed  through  nine  editions. 
No  mere  abridgment  (such  as  all  the  American  works  on  evidence  may  properly  be  denom- 
inated) can  supply  its  place.  It  is  both  elementary  and  practical,  and  is  equally  important 
to  the  student  and  practicing  lawyer. 

From  A.  J.  PAKKEB. 

Messrs.  Banks  &  Brothers: — Gentlemen, — I  have  examined  with  some  care  your  new  edition  of  Phillipps' 
Evidence  with  Cowen  and  Hill's  Notes,  edited  by  Mr.  Edwards.  It  is  certainly  a  work  of  great  value  and 
cannot  fail  to  be  highly  appreciated  by  the  Profession.  To  the  Notes  of  Cowen  and  Hill,  already  of  world- 
wide celebrity,  are  added  those  by  Mr.  Edwards,  which  bring  down  the  references  to  the  present  time 
These  seem  to  have  been  faithfully  prepared.  I  think  the  arrangement  is  also  improved,  by  bringing  all  the 
Notes  into  more  convenient  proximity  to  the  text.  This  work  now  possesses  the  great  advantage  of  en- 
abling the  professional  practitioner  or  student,  in  examining  a  rule  of  evidence,  to  see  at  a  glance  a  synopsis 
of  all  the  decisions  bearing  upon  it,  and,  by  the  aid  of  the  notes,  to  pursue  the  investigation  by  the  exami- 
nation of  the  authorities  bearing  upon  the  subject. 

from  AMOS  DKAJT. 

Messrs.  Banks  &  Brothers: — Gentlemen, — I  think  the  arrangement  of  this  work  is  admirable.  The  Pro- 
feasion  I  think  all  felt  before  that  although  the  work  presented  an  immense  body  of  valuable  law,  yet  its  ar- 
rangement was  such  that  it  was  difficult  to  find  just  the  thing  that  was  wanted,  and  hence  its  usefulness  was 
greatly  diminished.  It  now  appears  easy  of  reference,  with  indexes  to  each  volume.  It  is  a  splendid  monu- 
ment of  human  industry,  and  I  trust  you  will  derive  from  it  all  that  your  enterprising  spirit  so  richly  deserves. 
from  the  Commercial  Advertiser. 

In  New  T»rk,  as  in  England,  no  person  offered  as  a  witness  is  now  excluded  by  reason  of  incapacity  from 
interest,  and  even  the  parties  to  actions  at  law  are  competent  witnesses.  The  law  of  evidence  has  been 
subjected  to  substantially  the  same  alteration  in  Connecticut,  Vermont,  Ohio,  Massachusetts,  New  Jersey, 
Mississippi,  Wisconsin,  Maine,  Rhode  Island,  and  probably  other  states.  In  view  of  this  radical  amendment 


LAW  PUBLICATIONS.  19 

and  of  various  other  modifications,  4  new  edition  of  thii  standard  work  was  absolutely  required,  and  mart 
be  eagerly  welcomed  by  the  legal  profession.  Greenleaf  s  treatise  on  evidence  Is  so  purely  elementary, 
that  it  is  more  useful  to  the  student  than  to  the  actual  practitioner  of  the  law.  but  this  great  work  of  Phil- 
lipps  (as  revised  and  enlarged  by  himself  and  Justice  Arnold  in  ton  successive  English  editions,  and  copiously 
annotated,  first  by  Judge  Cowen  and  Nicholas  Hill,  next  by  J.  M.  Van  Cott,  and  now  by  Mr.  Edwards  in 
lire  American  editions)  is  the  most  elaborate,  comprehensive  and  thorough  digest  or  abridgment 


«M  WW«U|MM2U^   fJVIUtVU  I1MVWI ,  BAMM J  MUMI/   AXTIftUgCU  »UU    IllllJUlCIJ     iuuCACU^     DU|/|'l/lug     au 

ory  of  arguments  and  precedents,  to  be  readily  found  when  needed  in  forensic  contests. 

REEVE'.*  DOMESTIC  RELATIONS. 

Second  Edition.    Price  $3. 

THE  LAW  OF  BABON  AMD  FEME,  or  PARENT  AXD  CHILD,  GUABDIAX  AXD  WARD,  MASTKB 
and  Servant,  and  of  tho  Powers  of  the  Court  of  Chancery ;  with  an  Essay  on  the  terms 
Heir,  Heirs,  and  Heirs  of  the  Body.  By  TAPPING  REEVE.  With  Notes  and  References  to 
English  and  American  Cases.  By  Lucius  E.  CHITTENDEN. 


THE  REVISED  STATUTES  OF  THE  STATE  OF  NEW  YORK. 

AUTHORIZED   EDITION.      CERTIFICATE    OF  THE   SECRETARY   OF   STATE. 

Fifth  Edition.    3  Volumes.    Price  $15. 

THE  REVISED  STATUTES  OP  THE  STATE  OF  NEW  YORK,  AS  ALTERED  BY  SUBSKQUKKT 
legislation,  together  with  the  unrepealed  statutory  provisions  of  a  general  nature,  passed 
from  the  time  of  the  revision  to  the  close  of  the  session  of  the  Legislature  of  1858,  arranged 
in  the  manner  of  the  Revised  Statutes.  To  which  are  added  references  to  judicial  decisions 
in  relation  to  their  provisions,  and  explanatory  notes.  Prepared  by  AM  ASA  J.  PARKER, 
GEORGE  WOLFORD  and  EDWARD  WADE,  counselors  at  law. 

PREFACE  TO  THE  PRESENT  EDITION. — In  preparing  this  edition  of  the  Revised  Statutes,  the 
editors  have  followed  the  general  plan  adopted  in  the  second  and  fourth  editions.  That 
plan  will  be  found  particularly  detailed  in  the  preface  to  the  fourth  edition,  and  in  the 
extract  from  the  preface  to  the  second  edition,  herewith  published. 

All  the  public  statutes  now  in  force  in  this  state,  including  those  passed  at  the  last 
session  of  the  legislature,  are  embodied  in  this  edition,  and  placed  under  their  appropriate 
heads.  (In  preparing  the  text,  the  previous  editions  have  been  carefully  examined  and  all  errors 
found  therein  corrected ) 

To  the  notes  and  references  of  the  fourth  edition,  which  have  been  adopted  after  critical 
examination,  there  have  been  added  notes  explanatory  of  subsequent  legislation  and  full 
references  to  the  decisions  made  since  1851,  in  the  court  of  appeals,  the  supreme  court,  and 
the  superior  court  of  the  city  of  New  York.  References  are  also  given  to  Parker's  Criminal 
Reports,  Bradford's  Reports,  and  Howard's  Practice  Reports. 

The  great  amount  of  legislation  since  the  publication  of  the  fourth  edition,  particularly  on 
the  subjects  of  schools  and  taxation,  and  the  general  acts  of  incorporation,  with  the  special 
legislation  applicable  to  the  city  of  New  York,  were  found  to  have  swelled  the  work  to  so 
great  a  size  as  la  render  three  volumes  indispensable.  Such  a  change  was  found  also  not 
inappropriate  to  a  proper  division  of  subjects,  and  it  is  believed  it  will  be  deemed  to  have 
given  a  more  convenient  size  to  each  volume. 

The  index  has  been  prepared  with  great  labor,  and  will  be  found  to  be  very  full  and  well 
arranged  for  reference. 

AMAS A  J.  PARKER,  <  I KORG E   WOLFORD,  KDWARD  WADK. 

WB  BEO   LEATB  TO  CALL  ATTEjrnOH  TO  THB  POLLOWIXO. 

The  Hon.  H.  Denlo  says:— I  do  not  doubt  bnt  that  this  work  will  be  found  valuable. 

The  lion.  Win.  8.  Allen,  of  Oswego,  N.  Y.,  say*:— It  is  in  many  respects  an  improvement  on  the  fourth 
edition. 

The  Hon.  Amos  Dean  says:— The  Profession  can  rely  with  great  confidence  on  the  general  accuracy 
of  the  edition.  That  which,  in  my  opinion,  Is  particularly  commendable  and  will  be  in  a  more  especial 
manner  acceptable,  is  a  most  thorough,  minute  and  well-displayed  index. 


20  BANKS  &  BROTHERS' 

J.  Mullen,  Watertown,  says : — It  is  a  well-arranged  and  in'all  respects  a  valuable  edition  of  the  Statutes. 

Noah  Davis,  Jr.,  Albion,  says : — The  arrangement  seems  to  be  admirable  and  the  index  copious  and 
complete. 

Hon.  T.  O.  Johnson,  Corning,  says : — These  volumes  are  issued  in  a  style  highly  creditable  to  the  publish- 
ers, and  reflect  much  credit  upon  the  skill,  industry  and  accuracy  of  the  eminent  legal  gentlemen  who  have 
prepared  them  for  the  publishers. 

The  Hon.  D.  Pratt,  Syracuse,  says: — I  am  well  pleased  with  the  manner  In  which  the  Statutes  are  ar- 
ranged. The  index  is  admirable. 

The  Hon.  E.  Darwin  Smith,  Rochester,  says : — It  was  time  a  new  edition  was  printed  and  it  is  prepared 
in  a  flue  manner. 

"With  letters  from  lion.  Judges  Comstock,  Johnson,  Selden,  of  the  Court  of  Appeals,  and  lion.  Judges 
Shauklaud,  Harris,  Davies  and  others  of  the  Supreme  Court. 

From  Vie  Atlas  and  Argus. 

NEW  EDITION  OF  THE  REVISED  STATUTES. — Banks  «fc  Brothers  have  just  issued  from  the  press  a  new  edi- 
tion of  the  Revised  Statutes  of  this  State.  It  has  been  prepared  for  the  press  by  Hon.  Amasa  J.  Parker  and 
George  Wolford  and  Edward  Wade.  Esqrs.,  all  of  this  city.  All  tlie  public  statutes  now  in  force,  including 
those  passed  at  the  last  session  of  the  Legislature,  are  included  in  this  edition.  The  notes  and  references  con- 
tained in  the  fourth  edition  (by  Denio  and  Tracy)  have  been  preserved,  and  explanatory  notes  of  subsequent 
legislation  and  references  to  decisions  since  1851  have  been  added.  The  work  is  issued  in  three  volumes. 
Of  the  labors  of  the  editors,  the  Journal  appropriately  says : — "  The  edition  was  prepared  by  the  joint  labor 
of  Hon.  Amasa  J.  Parker  and  MCS.TS.  George  Wolford  and  Edward  Wade.  The  high  legal  reputation  of 
the  former  and  the  industry  and  ability  of  the  latter  gentlemen  are  guaranties  that  the  work  has  been  tho- 
roughly and  carefully  performed."  The  text  is  certified  by  the  Secretary  of  State.  There  is  a  copious  index. 

Evening  Journal. 

NEW  EDITION  OF  THE  REVISED  STATUTES. — Banks  &  Brothers  publish  the  fifth  edition  of  the  Revised 
Statutes  of  this  State.  The  whole  body  of  the  Statutes  embraced  in  former  editions  are  here  given  as  altered 
by  subsequent  k-fri.-.lation,  together  with  the  unrepealed  statutory  provisions  of  a  general  nature,  passed  from 
the  time  of  the  revision  to  the  close  of  the  session  of  185S.  The  general  plan  of  the  second  and  fourth  edi- 
tions has  been  followed,  and  in  preparing  the  text  the  previous  editions  have  been  carefully  examined  and 
en-urs  found  therein  corrected.  To  the  notes  and  references  contained  in  the  fourth  edition  there  have  been 
added  notes  explanatory  of  subsequent  legislation,  and  references  to  decisions  made  since  1851.  An  elabo- 
rate index,  the  fruit  of  no  small  labor,  is  appended.  The  Secretary  of  State  officially  certifies  to  the  cor- 
rectness of  the  text.  The  edition  was  prepared  by  the  joint  labor  of  Hon.  Amasa  J.  Parker  and  Messrs. 
George  W  olford  and  Edward  Wade.  The  high  legal  reputation  of  the  former  and  the  industry  and  ability 
of  the  latter  gentlemen  are  guaranties  that  the  work  has  been  thoroughly  and  carefully  performed.  This 
latest  edition  of  the  Statutes  is  indispensable  to  every  Lawyer. 


REYNOLDS'  LIFE  ASSURANCE. 

Price  $2. 
A  TREATISE  ox  THE  LAW  OF  Lira  ASSURANCE.   BY  DEXTER  REYNOLDS,  COUNSELOR  AT  LAW. 


RANDALL'S  SCHOOL,  LAW. 

Price  $1  25. 

THE  COMMON  SCHOOL  SYSTEM  OP  THE  STATE  OF  NEW  YORK,  COMPRISING  THE  SEVERAL 
General  Laws  relating  to  Common  Schools,  together  with  full  expositions,  instructions  and 
foois  for  the  use  of  the  several  school  officers  and  the  inhabitants  of  districts;  a  complete 
Digest  of  the  Decisions  of  the  State  Superintendent,  and  the  several  local  provisions  for 
the  support  of  Common  Schools  in  the  cities  and  villages  of  the  State.  To  which  is  pre- 
fixed a  Historical  Sketch  of  the  Origin,  Progress  and  Present  Outline  of  the  System.  Pre- 
pared in  pursuance  of  an  Act  of  the  Legislature,  under  the  direction  of  the  Hon.  Christo- 
pher Morgan,  Superintendent  of  Common  Schools.  By  SAMUEL  S.  RANDALL,  Deputy  Super- 
intendent of  Common  Schools. 

SANDFOKD'S  CHANCERY  REPORTS. 

Four  Vols.    Price  $20. 

REPORTS  o?  CASES  ARGUED  AND  DETERMINED  IN  THE  COURT  OF  CHANCERY  OF  Tire  STATE. 
of  New  York,  before  the  Hon.  Lewis  H.  Sandford,  Assistant  Vice-Chancellor  of  the  First 
Circuit 


SANDFORD'S  SUPERIOR  COURT  REPORTS. 

Two  Vols.    Price  $10. 
REPORTS  or  CASES  ABOTUED  AND  DETERMINED  IN  THE  SUPERIOR  COURT  OF  THE  Cnr  • 


LAW  PUBLICATIONS.  21 

Mew  York,  by  the  Hon  LEWIS  It  SAJTDPOED,  one  of  the  Justices  of  tho  Court.  Justices  of 
the  New  York  Superior  Court  during  the  time  of  the  reports :— Thomas  J.  Oakley,  Chief 
Justice ;  Aaron  Vanderpoel,  Lewis  H.  Sandford,  John  L.  Mason,  Jolin  Ducr,  W.  W.  Camp- 
bell, Elijah  Paine,  Jun.  (succeeded  Judge  Vanderpoel),  Justices. 

The  New  York  Superior  Court  is  the  principal  tribunal  in  the  city  of  New  York  for  the 
determination  of  important  commercial  cases.  It  lias  always  been  pre-eminent  for  the  learn- 
lag  and  ability  of  its  judges.  Indeed,  it  will  compare  favorably  in  this  respect  with  any 
court  in  the  world.  No  reports  stand  higher  than  those  of  Judge  SAKDFORD. 


SESSION  LAWS. 

TUB  SESSION  LAWS  OF  THB  STATE  or  NEW  YORK  ARE  PUBLISHED  AT  THB  CLOSE  or  EACH 
Session.  The  Laws  of  the  Legislature  from  1821  to  1859,  inclusive,  in  38  Volumes. 
These  Session  Laws  are  well  executed,  and  bound  separately,  and  sold  very  low. 


.TI  vici  N  ::  INSURANCE. 

Price  $2  50. 

An  AKALTTICAL  DIGEST  or  THE  LAW  or  MABIXE  IXSTJRAXCE,  ooNTAiNiiro  A  DIGEST  or 
all  the  cases  adjudged  in  this  State,  from  the  earliest  reports  down  to  the  present  tune. 
With  References  to  an  Appendix  of  Cases  decided  in  the  Supreme,  Circuit  and  District 
Courts  of  the  United  States,  from  the  earliest  period  down  to  the  year  1830.  By  HESRT 
,  counselor  at  law,  New  York. 


SMITH'S     COMMENTARIES   ON   STATUTORY   AND   CONSTITUTIONAL, 

LAW. 

Price  $5. 

COMltHNT ABIES  OS  STATUTE  ASD  CONSTITUTIONAL   LAW,  ASD  STATUTORY  COXSTmmOSAL 

Construction,  containing  an  Examination  of  Adjudged  Cases  on  Constitutional  Law,  under 
the  Constitution  of  the  United  States,  and  the  Constitution  of  the  respective  States,  concern- 
Ing  Legislative  Power,  and  also  the  Consideration  of  the  Rules  of  Law  in  the  Construction 
of  Statutes  and  Constitutional  Provisions.  By  E.  FITCU  SMITH,  counselor  at  law. 

From  t\e  Hon.  Lewis  H.  S ANDFOBD. 

I  have  examined,  with  much  Interest,  Judge  Smith's  "  Commentaries  on  Statute  and  Constitutional  Law." 

The  work  treats  of  subjects  upon  which  an  elementary  treatise  has  long  been  needed,  and  in  a  manner 
that  cannot  (ail  to  commend  It  to  the  approbation  of  legislator*,  as  well  as  lawyers  and  jurists. 

The  great  subject  of  legislatire  power,  as  restricted  by  written  constitutions,  and  especially  as  it  exists 
Independent  of  those  restraints  is  discussed  with  boldness  and  commanding  ability ;  and  the  portion  of  the 
work  devoted  to  the  exposition  of  statutes,  their  classification,  and  their  distinctive  traits  and  operation, 
ts  at  once  eminently  practical  and  thoroughly  digested. 

I  can  with  pleasure  recommend  the  work  to  the  bar  and  tho  public, 

From  th*  Jf«u>  York  Legal  Olterver. 

We  have  for  some  time  past  Intended  to  direct  the  attention  of  the  legal  profession  to  the  Hon.  E.  Fitch 
Smith's  "  Commentaries  on  Statute  and  Constitutional  Law  and  Constitutional  Construction."  Instead  of  a 
review  of  these  Commentaries,  we  have  concluded  to  present  to  our  readers  some  of  the  many  testimonial* 
which,  at  oar  request,  the  publishers  have  furnished  as.  In  the  JBelknap  Vaeette,  published  in  New  Hamp- 
shire, we  flnd  these  Commentaries  thus  alluded  to  : 

"Mr.  EorroE,— Permit  me,  through  the  columns  of  your  useful  paper,  to  congratulate  the  profession  upon 
the  appearance  of  the  Hon.  E.  Fitch  Smith's '  Commentaries  on  Statute  and  Constitutional  Law.' 

"The  first  five  chapters  in  this  learned  work  contain  the  origin  and  hUtory  of  legislation  amnng  the  anclect 
fovenmenu— of  legislation  In  England— of  legislation  In  the  colony  of  Virginia— of  legislation  In  the  col- 
oales  of  Mew  Plymouth  and  Massachusetts  Bay,  and  in  the  Connecticut  colony— and  then  proceeds,  sixthly, 
to  treat  of  the  legislative  power  of  tho  states,  and  the  bills  of  rights  of  tbu  respective  states.  Chapter  7th,  of 
legislative  authority  Irrespective  of  any  constitutional  restrictions  upon  legislative  power,  Ac.  Sth,  of 
constitutional  restrictions  upon  legislative  power,  under  the  constitution  of  the  United  States— first,  as  ap- 
plicable to  the  federal  government,  and  second,  as  applicable  to  the  state  governments, and  the  construction 
put  ii|.on  such  restrictive  clauses.  9th,  of  constitutional  restrictions  upon  legislative  power,  under  the  con- 
i>Ututions  of  the  respective  states,  and  the  construction  of  such  restrictive  clauses,  loth,  of  legislative  and 
judicial  interpretation,  llth,  of  the  division,  qualities  and  incidents  of  statutes.  12th, of  interpretation  and 
construction  of  particular  words.  18th,  of  extemporaneous  exposition.  14th,  of  statutes  In  Fari  Xaltria. 
15th,  of  affirmative  and  negative  statutes,  loth,  of  equitable  construction  of  penal  statutes.  15th,  of  the  con- 
struction of  penal  statutes.  19th,  of  the  repeal  of  statutes.  80th,  of  public  and  private  statutes ;  and  91st, 
o  f  the  proofs  of  the  existence  of  statutes. 


22 


BANKS  &  BROTHERS1 


"  It  will  at  once  be  seen  how  indispensable  a  thorough  knowledge,  of  the  subjects  treated  of  in  this  work, 
is  to  every  lawyer  and  legislator.  The  works  of  Judges  Kent  and  Story,  upon  the  several  subjects  found  in 
Judge  Smith's  Commentaries,  have  been  read  with  much  pleasure  and  instruction.  But  those  works  com- 
bined do  not  present  but  parts  of  the  great  whole  treated  of  in  the  Commentaries  under  consideration.  The 
latter  may  well  be  called  an  American  work,  written  in  the  true  spirit  of  our  free  institutions,  based  npon 
American  authorities,  supported  by  lucid  arguments,  drawn  from  the  vital  principles  of  our  government, 
and  such  constructions  as  have  long  received  the  unqualified  approbation  of  our  own  judiciary.  Aftersome 
examination,  I  hope  not  to  render  myself  obnoxious  to  contradiction,  by  say  ing  that,  after  the  careful  perusal 
of  these  Commentaries,  every  jurist  will  cheerfully  acknowledge  the  superiority  of  this  work  over  any 
others  now  extant,  treating  upon  the  same  general  subjects. 

"  I  have  now  no  time,  if  I  had  the  ability,  to  make  an  analytical  review  of  Judge  Smith's  very  useful 
Commentaries.  My  only  design,  in  taking  up  the  pen  upon  this  subject,  was  to  call  tbe  attention  of  the  pub- 
lic, and  jurists  in  particular,  to  this  new  and  valuable  treatise,  with  a  view  of  conferring  a  favor  and  ren- 
dering some  service,  by  the  information,  to  those  who  are  supposed  to  be  more  directly  interested  In  such  a 
work;  I  hope  the  distinguished  author  will  receive  a  reward  commensurate  with  that  great  amount  of  labor 
and  splendor  of  achievement." 

We  understand  the  article  above  quoted  emanated  from  the  pen  of  the  late  attorney-general,  a  distin- 
guished and  learned  constitutional  lawyer. 

The  following  extracts  are  taken  from  Hunt's  Merchants'  Magazine  : 

"A  work,  fully  and  ably  treating  the  subject  of  statutory  and  constitutional  law,  has  been  much  needed, 
and  the  learned  labors  of  Mr.  Smith  have  resulted  in  an  exceedingly  seasonable  publication.  Of  one  fac  t 
the  book  furnishes  conclusive  prima  facie  proof,  and  a  refutation  of  a  prevailing  notion.  We  are  often 
told  that  the  days  of  profound  scholarship,  of  '  learned  tomes'  (as  the  phrase  runs),  are  gone.  But  that,  in 
one  branch  at  least  of  human  learning,  there  are  still  to  be  found  deep  thought  and  ptttient  study,  such  books 
as  these  Commentaries  conclusively  prove  ;  and  if  we  are  told  that  we  have  no  longer  the  huge  folios 
of  former  days,  we  answer  that  the  fashion,  rather  than  the  size  of  the  volume,  has  changed,  and  we 
point,  for  proof,  to  Mr.  Smith's  octavo  of  a  thousand  pages. 

"The  direction  of  modern  legal  scholarship  has  changed,  but  it  has  lost  nothing  in  profundity.  No 
longer  puzzling  over  the  subtleties  of  the  schools,  it  finds  enough  to  do  in  grappling  with  the  moment- 
ous questions  and  pressing  interests  of  the  present;  and  no  longer  finding  time  for  the  refinements  of 
a  logic  which  afforded  gratification  to  a  learned  complacency,  rather  than  yielding  practical  good,  it  has 
need  of  all  its  time  and  powers  to  keep  up  with  the  developments  of  an  active  age,  and  in  endeavoring 
to  reduce  to  rule  and  system  the  notions  and  opinions,  the  necessary  modifications  of  old  rules,  called 
forth  by  new  events  and  the  changing  aspect  of  society. 

"  We  speak  not  only  with  reference  to  our  own  country,  when  we  call  this  work  seasonable.  At  a  time 
when  all  Europe  is  convulsed  with  movements,  the  whole  end  and  aim  of  which  is  constitutional  change,  tbe 
shifting  of  the  supreme  power  of  states  off  one  basis  to  another,  with  fundamental  changes  ;  in  short,  the 
Inquiry  into  the  sources,  nature,  extent  and  limits  (if  limits  there  be)  of  this  supreme  power  of  states, 
becomes  momentous  and  vttaL  When  we  consider  that  it  has  been  for  years  a  mooted  point  whether  there 
be  In  fact  limits  to  the  power  of  the  legislative  or  law-making  authority,  and  how  pertinaciously  the  doc- 
trine of  the  omnipotence  of  Parliament  (as  English  writers  call  it)  has  been  attacked  and  defended,  we 
see  how  fundamental,  and  at  the  same  time  unsettled,  are  some  of  the  questions  connected  with  this  sub- 
ject One  of  the  most  interesting  and  elabora  te  cha  pters  of  this  work  is  devoted  to  this  question.  Mr.  Smith 
has  brought  together  the  opinions  of  the  great  text  writers  on  the  subject — those  of  Burlamaqui,  Woodesson, 
Domat,  Blackstone  and  others  on  one  side,  and  those  of  Vattel,  Locke  and  Hall  on  the  other,  and  then  pro- 
ceeds to  examine,  in  detail,  the  leading  American  authorities,  of  both  state  and  federal  courts. 

"  We  commend  this  work,  and  the  subject  which  it  treats,  to  the  study,  not  only  of  the  American  lawyer, 
bat  of  the  American  legislator,  the  American  merchant,  and,  we  may  add,  to  every  citizen  who,  as  a  voter, 
makes  a  unit  in  that  aggregate  of  popular  will  which  expresses  itself  by  acts  of  legislation." 

A  distinguished  jurist  says' — "  This  subject,  so  ably  treated,  is  one  of  the  highest  interest  and  importance 
not  only  to  the  lawyer  and  jurist,  but  to  the  legislator  and  statesman,  and  must  commend  this  work  to  the  dili- 
gent study  of  all  those  who  aspire  to  an  accurate  knowledge  of  the  science  and  true  principles  of  legislation." 

A  gentleman  of  high  eminence  at  the  Boston  bar  pronounces  these  Commentaries  "  an  able,  learned  and 
highly  satisfactory  treatise." 

The  attorney -general  of  Alabama  says : — "I  have  been  highly  delighted  in  their  perusal ;  I  entertain  the 
opinion,  and  have  no  doubt  that  ere  long  they  will  be  in  high  esteem  among  the  legal  profession." 

A  juridical  writer  says: — "  Such  a  work  as  this  has  been  much  needed.  In  it  are  discussed,  and  that  in 
a  most  able  manner,  the  law  and  rules  of  construction  of  constitutional  and  statutory  enactment.  It  opens 
and  enters  in  a  bold  manner  upon  a  subject  which,  under  our  free  and  republican  institutions,  presents  a 
wide  and  interesting  field  for  the  exploration  of  the  legal  student  and  juridical  scholar  in  the  exercise  of 
judicial  and  professional  learning,  and  is  worthy  the  careful  and  attentive  perusal  of  all  those  who  desire  an 
accurate  and  just  apprehension  of  the  genuine  policy  and  real  philosophy  of  our  happy  and  peculiar  institu- 
tions, or  the  true  basis  of  human  rights  upon  which  they  are  founded." 

Our  space  will  not  admit  of  further  extracts-at  present.  We  would  add,  in  onr  opinion,  the  work  of  Judge 
Smith  evinces  an  intimate  and  accurate  acquaintance  with  constitutional  law  and  other  subjects  of  which  he 
treats.  We  find  in  it  the  impress  of  a  clear  and  discriminating  mind,  legal  ability  as  a  juridical  writer,  un- 
surpassed by  few  writers  of  the  present  day.  From  the  learning  and  talent  exhibited  in  the  numerous 
judicial  opinions  of  this  author,  which  we  have  heretofore  published,  we  had  reason  to  expect  that  a 
work  emanating  from  his  pen  would  bt;  one  of  real  intrinsic  merit.  Our  expectations  in  this  respect  have 
been  fully  realized. 

These  Commentaries  also  contain  an  unusual  amount  of  original  matter.  We  were  much  gratified  In  the 
perusal  of  the  logical  and  impressive  argument  contained  in  the  opening  of  chapter  nine;  in  which  the 
author  discusses  the  important  constitutional  question,  "  What  is  a  bill  (within  the  meaning  of  our  con- 
BtUutlon)  appropriating  the  public  moneys  or  property  for  local  or  private  purposes?" 

The  concluding  part  of  chapter  seven,  from  section  149  to  173,  both  inclusive,  contains  one  of  the  most 
bold  and  masterly  arguments  which  has  ever  fallen  under  our  observation,  upon  the  difficult  and  intricate 
question,  "As  to  the  power  of  the  legislature,  irrespective  of  any  constitutional  restrictions,  to  pass  retro- 
spective laws  which  shall  have  a  retroactive  eflect" 

That  portion  of  the  work  which  relates  to  the  consideration  of  the  construction  of  statutes  is  of  ereat 
practical  Interest  and  utility  to  the  profession,  and  in  it  will  be  found  evidence  of  great  research  and  of  legal 
erudition  of  no  ordinary  cast.  The  author  has  certainly  rendered  to  the  profession  great  and  valuable  service 
In  this  branch  of  juridical  science,  and  what  has  been  done  haa  been  well  and  scientifically  done. 


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Chapter  1  :  Of  the  relief  afforded  by  equity  in  cases  of  accident  and  mistake.  —  Chapter  2  : 
Of  Account  —  Chapter  3  :  Of  Fraud.  —  Chapter  4  :  Of  Specific  performances  ;  Correction  and 
Re-execution  of  Agreements;  and  of  Compensation.  —  Chapter  5  :  Of  Bills  of  Interpleader, 
Bills  of  Peace,  Bills  of  Quia  Timet,  and  Bills  to  Marshal  Securities.  —  Chapter  6  :  Of  Injunc- 
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ON 


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NEW- YORK: 

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T 


C.  VAJC  BEXTliUKSE.N.  PRINTKR. 


PREFACE. 


ACCORDING  to  the  common  practice,  the  writer  is 
expected  to  preface  his  work  with  an  apology  for  his 
appearance  before  the  public,  bowing  reverently  as  one 
who  comes  into  an  august  presence.  Graceful  as  this 
custom  may  be,  and  is  always  when  the  writer  addresses 
himself  to  cultivated  minds  on  a  subject  of  general  im- 
portance, it  is  nevertheless  certain  that  a  modest  pro- 
logue is  no  apology  for  a  lame  performance,  while  a  well 
written  treatise  may  be  safely  trusted  to  speak  for 
itself.  Waiving  then  all  words  of  ceremony,  as  either 
fruitless  or  unnecessary,  I  trust  the  following  work 
will  prove  itself  to  have  been  prepared  with  diligence 
and  fidelity. 

There  was  a  time  when  a  law-book,  written  in 
England  and  re-published  in  this  country,  with  Amer- 
ican notes,  exhibited  the  true  relation  existing  between 
the  common  law  in  its  home,  and  that  law  as  modified 
by  statutes  and  judicial  decisions  in  the  States.  The 
body  of  the  work  was  then  appropriately  English, 
because  drawn  mainly  from  the  English  reports ;  and 
our  own  adjudications,  few  in  number,  conveniently 
enough  fell  into  the  form  of  notes.  Fifty  years,  busy 
with  manifold  labors  and  achievements  in  every 
department  of  human  thought  and  activity,  have 
materially  advanced  the  science  of  the  law,  and 
wrought  a  great  change  in  the  relation  between  the 


PREFACE. 


English  and  American  authorities.  Much  more  numer- 
ous, our  courts  are  as  enlightened  as  those  of  England, 
and  the  questions  arising  here  are  as  various  and 
important  as  those  presented  for  determination  in  any 
civilized  community ;  and  the  decisions  arrived  at,  and 
embodied  in  our  reports,  furnish  a  mine  that  deserves 
to  be  wrought  on  its  own  account. 

Rightly  considered,  therefore,  a  work  on  bills  and 
notes  prepared  here  does  not  come  into  competition 
with  any  English  work  on  the  subject ;  and  as  there 
is  no  single  American  book  embracing  the  same  topics, 
this  cannot  be  deemed  a  rival  to  any  thing  which  has 
yet  appeared.  Nor  has  there  been  any  intention  to 
make  it  such;  on  the  contrary,  the  effort  has  been  to 
ascertain  the  law,  and  state  it  in  brief  terms,  with 
such  illustrations  as  seemed  calculated  to  develope  and 
explain  the  reason  on  which  it  is  founded — the  public 
and  judicial  reason  which  has  been  declared  superior 
to  that  of  any  private  man. 

The  order  of  arrangement  has  been  chosen  with 
care; — with  a  design  to  bring  the  different  phases  of 
the  subject  into  review,  in  the  form  and  order  in 
which  they  naturally  present  themselves ;  beginning 
with  the  capacity  to  make  and  indorse  negotiable 
paper,  and  ending  with  the  sum  recoverable  upon  the 
instrument. 

For  the  sake  of  clearness  and  brevity,  the  statutes 
of  the  States  in  which  the  commercial  law  has  not 
been  fully  adopted,  are  referred  to  in  the  notes ;  and 
a  brief  statement  of  the  facts  as  well  as  the  result  of 
the  decisions  cited,  is  frequently  given  in  the  same 
form.  The  fullness  of  these  notes  has  rendered  the 
volume  somewhat  large,  and  it  is  believed  much 
more  useful. 


PREFACE. 

In  those  States  where  the  statute  makes  promissory 
notes  negotiable,  and  gives  to  them  the  same  effect  aa 
inland  bills  of  exchange,  the  decisions  do  not  draw 
any  material  distinction  between  notes  and  drafts; 
and  hence  it  has  been  generally  deemed  proper  to 
treat  them  as  constituting  but  one  subject — that  of 
negotiable  paper ;  embracing  under  that  term  foreign 
and  inland  bills  of  exchange,  checks  drawn  on  banking 
associations  and  bankers,  notes  of  hand,  bank  notes 
and  certificates  of  deposit.  These  several  instruments 
of  commerce,  used  constantly  in  every  variety  of 
transaction,  are  of  great  and  increasing  interest — are, 
in  short,  the  machinery  by  which  the  affairs  of  busi- 
ness are  carried  forward,  and  the  engagements  of  men 
reduced  to  form  in  the  most  concise  and  expressive 
language. 

The  commercial,  equally  with  other  branches  of  the 
common  law,  grew  up  out  of  general  usages;  and 
the  principle  of  growth  or  adaptation  to  the  wants  of 
society,  remains  inherent  in  the  system. ,  A  change 
passes  over  the  modes  of  business,  and  the  law 
promptly  adapts  itself  to  that  change. 

Estimating  the  importance  of  the  subject  with 
reference  to  the  amount  of  property  afloat  in  the 
shape  of  bills  and  notes,  there  never  has  been  a  time 
when  it  called  for  greater  accuracy  and  discrimination, 
or  invited  the  attention  of  merchants  and  professional 
men  with  motives  of  equal  urgency.  Estimating  it 
with  reference  to  the  established  canon  of  judicial 
reasoning — that  principle  by  which  the  latest  decision 
is  always  regarded  as  the  highest  authority — the 
present  has  an  advantage  over  the  past,  not  found 
to  exist  in  an  equal  degree  in  any  other  department 
of  human  science.  Availing  myself  of  the  vantage 


6  PREFACE. 

ground  thus  given,  I  have  endeavored  to  render  thia 
treatise  equal  to  the  demands  of  the  present  time ;  and 
shall  be  highly  gratified  if  it  be  found  on  a  fair  trial 
to  meet  the  approval  of  the  candid  and  severe  judg- 
ment, to  which  works  of  this  nature  are  addressed. 

ALBANY,  September  15,  1857. 


CONTENTS. 

CHAPTER  I. 

OP  NEGOTIABLE  PAPER.      INTRODUCTION. 

MM* 

Definition  and  use  of  bills  of  exchange 41,  42 

Origin,  and  office  of 42 

Theory  of  the  bill,  and  its  use 43,  44 

Misuse  of 45 

Law  Merchant 46 

Bills,  foreign  and  inland 47  -  49 

Foreign  bill  to  be  protested— not  so  inland  bills 50 

Inland  bills 50,  51 

Promissory  notes — their  negotiability 52-54 

Assignment,  Ac 55 

Purchaser  in  good  faith 56,  57 

Bank  checks  are  bills  of  exchange 57,  58 

Banks  notes,  paper  credit 59,  60 

Bonds  payable  to  bearer  and  negotiable 60,  61 

CHAPTER  II. 

PARTIES   TO   BILLS   OF   EXCHANGE   AND   PROMISSORY   NOTES. 

Contract— legal  capacity 62  -  72 

Non-sane  persons 02  -  64 

Infants,  notes,  Ac.,  by 64-68 

Married  women,  notes,  Ac.,  by 68  -  72 

Alien  enemies 72  -  74 

Corporations 75  -  77 

Executors  and  administrators 78 

Trustees — guardians 78,     79,     80 

Agents,  their  liability  and  authority 80-96 

Implied  authority,  from  blank  signatures 92,     93 

Appointment  of  agents 95,     96 

Partnership 96  -  99 

The  agency  of  each  partner 100  - 103 

When  unauthorized  acts  bind  the  firm 102,   103 

When  such  acts  do  not  bind 103-106 


8  TABLE  OF   CONTENTS. 

PAQB. 

Limited  partnerships 107  -  109 

Dormant  partners 109 

Partners,  as  to  real  estate 110 

A  case  of  mutual  but  not  joint  adventure. Ill 

Dissolution — how  made — effect  of Ill,    113-117 

Renewals,  admissions  by  one  partner  after  dissolution. 118  - 120 

Dissolution  by  insolvency  or  death  of  one  partner 121  -  123 

CHAPTER  III. 

FORMS  AND  REQUISITES  OF  BILLS  AND  NOTES.      CONSTRUCTION,  DELIVERY, 
AND   PAYMENT   BY  BILL  OR  NOTE. 

Essential  qualities  of  a  note  or  bill. 124 

Must  not  be  payable  on  a  contingency 125 

Fictitious  pajree  or  other  parties 125  -  130 

Notes  or  bills  payable  to  bearer  or  to  a  person  of  a  certain 

description 130-132 

Must  be  executed 133,    134 

Must  be  payable  in  money .   134  -  138 

And  not  for  performance  of  some  other  act 138,    139 

Must  imply  an  obligation  to  pay 139 

Must  be  for  a  definite  sum 140 

Must  not  depend  on  an  uncertain  event. 141,    142 

Must  not  be  payable  out  of  a  particular  fund 142  -  145 

Acceptance,  must  be  absolute 144,    145 

Memorandum,  cotemporaneous  writing  and  agreements 145  - 148 

PARTS  AND  PARTICULAR  REQUISITES 149 

The  instrument  must  be  in  writing 149,    150 

Dating  the  instrument, 150  -  152 

The  superscription  in  the  margin 152,    153 

Time  and  place  of  payment 153  -  160 

Order  to  pay ICO 

Bills — when  drawn  in  parts 1G1  -  1G4 

Words  of  negotiability 164-168 

Sum  payable 168 

Value  received 169  -  172 

Words  of  advice 172 

The  address  of  bills. .   ., 173-175 

Subscribing  witness 175,    176 

CONSTRUCTION,  BY  WHAT  LAW 176  - 186 

DELIVERY 186-192 

PAYMENT  BY  BILL  OR  NOTE 192  -  207 

Payment  in  forged  or  valueless  bills 205  -  207 


TABLE   OF   CONTENTS.  9 

CHAPTER  IV. 

OP  NOTES  AND   DRAFTS   NOT   NKGOTIABLK.      CONTRACT  OF  GUA&ANTT. 

PAGE. 

Sealed  notes,  not  within  the  statute 208,   209 

Notes  and  drafts  payable  in  specific  articles 210  -  218 

Consideration,  to  be  alleged 210  -  213 

Orders  and  drafts  payable  in  property 211  -  213 

Drafts  payable  out  of  a  specific  fund 211.   212 

Acceptance  not  necessary,  when >. 213 

Notes  payable  in  chattels,  where  to  be  performed 214  -  216 

Notes  payable  in  ponderous  articles 216 

Possession  of  notes  and  drafts  not  negotiable 216,   217 

CONTRACT  OF  GUARANTT 218  -  244 

A  guaranty  of  a  note,  a  contract  by  itself. 219 

Not  negotiable 219,   220 

An  open  or  general  guaranty 220 

A  negotiable  guaranty,  what  is 220 

Notice  to  guarantor. 221 

Guaranty  of  payment,  example 221 

Statute  of  frauds 222 

Curtis  T.  Brown,  case  of  guaranty 224,   225 

Brewster  v.  Silence 225,   226 

The  statutes  of  frauds 226-228 

The  English  statute,  construction  of 227 

Departures  from  English  doctrine 228 

What  is  a  guaranty 229 

Guaranties,  when  not  within  the  statute 229,    230 

Collateral  engagements  are 230  -  232 

Consideration,  how  to  be  expressed 232,   233 

Guaranty   of  collection 234  -  238 

An  authority  to  draw 238 

Letters  of  credit 239,   240 

When  general,  and  when  special 239 

Letters  of  credit  and  commercial  guaranties  not  negotiable..' 239 

Example,  statute  of  fraud 240 

Notice  to  the  guarantor 240  -  244 

CHAPTER  V. 

INDORSEMENT   AND   TRANSFER. 

Bills  and  notes,  when  negotiable 245 

Transfer  and  indorsement  by  infants 246 

The  same  by  married  women,  executors,  tc 247 

Competency  of  the  payee  to  indorse,  his  indorsement 248  -  250 

The  title  must  be  in  the  plaintiff 250 

And  right  of  property, 251 

Exception— trustees  of  an  express  trust 252 


10  TABLE   OF    CONTENTS. 

fAOE. 

Tranfer  by  an  agent,  blank  indorsement 252 

Tranfer  to  an  agent,  restrictive  indorsement 253 

Must  be  indorsed  by  the  legal  owner,  partners^. 254  -  256 

Transfer  by  general  assignment,  voluntary  and  compulsory. . . .  256  -  258 

Transfer,  when  made 258 

Taking  the  paper  after  due — subject  to  the  equities,  set-off ....  259  -  261 

MODES  OP  INDORSEMENT  AND  DELIVERY 261 

Indorser's  contract,  forms  of  indorsement. 261  -  271 

Indorsement  in  blank  and  in  full 267  -  271 

Laws  of  different  States,  statutes,  see  note 264  -  285 

Bight  of  holder  to  fill  up  a  blank  indorsement 271,   272 

Striking  out  indorsements,  restrictive  indorsements. .....  275,   276,   277 

Indorsement  for  part,  memorandum 279  -  281 

Indorsement  "  without  recourse  " 282  -  284 

Delivery  should  accompany  the  indorsement 285,   286 

The  indorser's  undertaking 287  -  289 

What  the  indorser  guaranties  or  admits 289  -  291 

"What  acts  discharge  the  indorser,  payment,  &c 291  -  295 

In  what  respect  the  indorser  is  not  a  surety 292,   293 

Release  of  maker  or  acceptor  discharges  indorser 294 

So  will  a  valid  agreement  with  them  for  time,  or  with  a  prior 

indorser 294,   295 

Loss  OP  NEGOTIABLE  PAPER,  no  action  at  common  law  on 295 

Our  statute  in  respect  to,  construction  of,  common  law  rule. . . .  295  -  300 
When  the  paper  is  destroyed,  when  in  the  defendant's  hands. .  300-303 
When  destroyed  on  purpose — right  to  payment  on  giving  security  303,  304 

The  indemnity 305 

Bank  bills  severed  for  transmission  by  mail,  notice  of  loss. . . .  307  -  309 
Purchasing  or  taking  lost  or  stolen  bills 309,  310 

CHAPTER  VI. 

CONSIDERATION. 

Between  whom  consideration  may  be  inquired  into 311,    312 

Presumptions  in  respect  to  negotiable  bills  and  notes 312,    313 

The  terms  of  a  note  cannot  be  contradicted * 313,    314 

Collateral  agreements,  parol  evidence  of. 313  -  315 

WANT  OF  CONSIDERATION 315  -  327 

A  consideration,  a  necessary  part  of  every  contract 315 

Accommodation  paper,  a  mere  loan  of  credit 315  -  317 

A  bona  fide  purchaser  of,  who  is 316-318 

Made  for  one  purpose  and  diverted  to  another 316  -  323 

What  is  giving  value  for  paper 320  -  322 

Recovery  on  accommodation  paper  by  purchaser 320  -  324 

Want  of  consideration,  notes  executed  as  gifts 324,    325 

Duress,  fraud,  &c „,. 325,   326 


TABLE   OF   CONTENTS.  11 

PAGE. 

Want  of  consideration,  effect  of 327 

FAILURE  OF  CONSIDERATION 328 -  336 

Note  for  purchase  money,  failure  of  title 328 

Notes  given  on  agreements  and  sales,  one  thing  sold  for  another.  329  -  332 

Examples  of  a  failure  of  consideration 329  -  332 

Inadequacy  of  consideration,  no  defence 331 

Partial  failure  of  consideration 333  -  335 

May  be  shewn  in  reduction  of  damages 334 

The  defence  must  be  pleaded,  English  rule 334,    335 

ILLEGALITY  or  CONSIDERATION 336  -  370 

The  general  principle,  exceptions  in  favor  of  negotiable  paper . .  337,   370 

Contracts  with  the  enemy  in  a  time  of  war 338 

Immoral  contracts 339,   340 

Illegal  and  wagering  contracts 341,.  367 

Contracts  in  restraint  of  trade  or  marriage 342  -  344 

Conspiracy  against  trade,  against  competition  at  auction  sales 344 

Contracts  giving  a  preference  on  a  composition  with  creditors . .  345  -  346 

Contracts  to  defraud  creditors  or  in  violation  of  law 346,    347 

Contracts  declared  void  by  statute 347  -  349 

Usurious  contracts 349  -  365 

Revised  Statutes 349,   350 

How  far  the  taint  of  usury  extends 3£1 

Renewal  notes 351,    352 

Valid  notes  may  be  sold  like  other  property 352 

Accommodation  notes  given  on  an  usurious  contract 352 

Usurious  notes  given  for  valid  notes,  do  not  extinguish  original  notes.  354 

Mistakes  in  calculation,  or  drawing  contract 356 

A  corrupt  agreement,  what  is 356,   357 

Agreements  for  compound  interest 357,   358 

Taking  interest  in*  advance 358  -  360 

Construction  of  contract,  presumptions 360 

Instances,  not  usurious;  instances,  usurious 560 -  367 

"Interest,"  "forbearance,"  loan  of  goods,  4c 363 

Sale  of  credit,  evasive  agreements 365 

Note  made  in  one  state  payable  in  another,  interest  on 366 

Wagering,  gaming  and  stock -jobbing  contracts 367  -  370 

A  bona  fide  purchaser,  consideration  of  accommodation  paper . .  370  -  377 

CHAPTER  VII. 

CONTRACT  OP   DRAWER,   PRESENTMENT   FOR,  AND   ACCEPTANCE  OF   BILLS. 

1.  Contract  of  drawer 378-386 

2.  Presentment  for  acceptance 386  -  405 

Bills  payable  after  sight  or  after  demand,  when  to  be  presented.  386  -  388 

The  same  when  payable  after  date 387 

What  is  reasonable  time  in  which  to  present,  foreign  bills 388  -  395 


12  TABLE   OF   CONTENTS.  ^ 

PAGE. 

In  case  the  bill  is  put  in  circulation  or  not  circulated 389 

Analogy  of  the  bill  drawn  at  sight  with  notes  payable  on  de- 
mand    390,    391 

Laches  or  delay  in  presenting,  what  is 389  -  395 

Delay  in  presenting  a  bank  check 396  -  398 

No  difference  between  foreign  and  inland  bills  in  this  respect 398 

At  what  hour  to  be  presented 399 

At  what  place 399 

Should  be  presented  to  the  drawee  himself 400 

By  whom  presented 400 

How  presented,  when  drawn  on  more  persons  than  one 400,   401 

How  presented,  in  case  of  the  drawee's  death 401 

Or  in  case  one  of  the  drawees  is  dead,  au  besoin 401  -  402 

The  interest  of  the  holder  to  have  bill  presented,  duty  of  collec- 
tion agent 402-404 

3.  Acceptance  of  bills 405 

The  contract  of  acceptance,  drawee  when  bound  to  accept 405 

Acceptance  of  checks,  what  is • 406 

A  promise  to  accept,  an  acceptance  when 407  -  409 

Acceptance  by  letter,  after  drawer's  death 408 

A  parol  promise  to  accept,  when  good 409 

Statutes  of  this  state  on  the  subject 409  - 410 

Design  and  effect  of 410  -  415 

Must  be  signed 411 

An  authority  to  draw,  an  acceptance 411  -  412 

The  statute,  how  far  declaratory 412  -  413 

A  promise  to  accept  a  bill  not  drawn,  effect  of 407,    409,    413 

The  act  of  drawing  a  bill,  when  an  acceptance 416 

The  drawee  destroys,  or  refuses  to  return  the  bill,  effect  of. ...  417,   418 

Conditional  acceptance,  when  it  becomes  absolute 419 

Examples  of  qualified  and  conditional  acceptances 419  -  421 

The  acceptance,  how  construed 421,    422 

Compliance  with  condition  of  acceptance 420  -  222 

When  drawn  on  consignments,  with  the  bill  of  lading  attached .  422-424 
The  acceptance  in  writing  cannot  be  varied  by  parol  evidence. .  424,    425 

Verbal  acceptances  may  be  so  varied 426 

An  acceptance  to  pay  at  another  place 426  -  427 

Rule  of  pleading  in  such  cases 427  -  428 

Effect  of  taking  a  qualified  acceptance 428  -  430 

Acceptor  primarily  bound,  though  he  accept  for  accommodation .  430  -  432 

Acceptance  for  special  purposes 431 

Bound  only  to  pay  the  legal  holder,  admits  the  drawing 432-434 

Acceptance,  when  complete,  cancelling  by  mistake 434 

Waiver  of  acceptance,  release  of  acceptor 435  -  437 

Satisfaction,  alteration  of  acceptance 437,    438 

Acceptance  for  honor 438  -  442 


TABLE   OF   CONTENTS. 

CHAPTER  VIII. 

OP   NON-ACCEPTANCE,   AND   PROCEEDINGS   THEBEON. 


13 


PAG*. 

Proceedings  similar  for  non-acceptance  and  for  non-payment, . .  444  -  478 
Bills  payable  after  date  need  not  be  presented  for  acceptance,  but 

if  presented  ? 444,   445 

Bills  received  on  prior  debts >. 445 

Object  of  notice  of  dishonor — exceptions  to  general  rule 445,   446 

Presumption  of  damage,  for  want  of  notice,  early  rule, 446,   447 

An  exception  to  the  rule,  in  Pennsylvania 447,   448 

Drawer's  contract  under  law  merchant 449 

Drawing  without  funds,  effect  of 449  -  452 

Want  of  funds  in  the  drawee's  hands,  no  excuse  as  to  indorser  452  -  454 

Cases  of  fraud 453 

The  accommodated  drawer  or  indorser  not  entitled  to  notice . . .  453,   454 

In  case  of  the  drawee's  death,  or.  that  of  drawer  or  indorser 454 

Or  insolvency  of  drawee  or  maker 455 

Where  the  drawee  absconds,  or  where  the  drawer  or  indorser 

absconds 455,   456 

Notice,  how  served,  recent  statute 456,   457 

Diligence  to  find  drawer  or  indorser 456 

Delay,  when  excused 457  -  459 

Notice,  when  to  be  served 457  -  459 

Holder  not  obliged  to,  but  may  take  a  qualified  acceptance,. . . .  459,   460 

A  foreign  bill  should  be  protested,  notice  of 461 

Mode  of  protesting — by  whom 461,   462 

Inland  bills  need  not  be  protested,  but  may  be 462,   463 

Notarial  certificate,  when  evidence  of  protest 463  -  467 

When  evidence  of  notice,  under  statute 464  -  467 

When  the  statute  does  not  apply 464  -  466 

The  protest  and  notice  must  be  made  and  given  by  the  notary 466 

In  what  cases  the  certificate  is  not  evidence 467 

How  dishonor  of  bills  protested  here,  to  be  proved 467,   468 

The  rule  that  inland  bills  and  notes  need  not  be  protested 468,   469 

Notice  of  non-acceptance  always  necessary 469,   470 

Notice  need  not  be  in  writing ;  what  it  must  contain 470  -  472 

Description  of  bill  or  note 470,   471 

Sufficiency  of  notice — question  of  law 472,   473 

When  a  question  of  fact 472 

To  what  parties  notice  should  be  given 473,   474 

How  transmitted  from  one  party  to  another 474 

Duty  of  a  collecting  agent  in  this  particular 475,   476 

A  stranger  cannot  give  notice — the  holder  may 476,    477 

Not  necessary,  when  bill  drawn  by  one  partner  on  the  firm 477 

Dishonored  for  non-acceptance,  bill  need  not  be  presented  for 

payment,  Ac 477,   478 

The  holder's  laches,  how  waived 478 


14  TABLE   OF   CONTENTS.  • 

CHAPTER  IX. 

PRESENTMENT   FOR   PAYMENT,   AND   PAYMENT. 

PAGE. 

1.  Presentment  for  payment. 

When  necessary — for  what  purpose 479 

Place  of  payment,  when  material  part  of  contract 479  -  482 

Pleading,  as  against  maker  of  a  note  or  acceptor  of  a  bill 480  -  482 

The  rule  is  the  same  as  to  bank  bills 481 

Severed  bills — case  of  a  pledge 482 

Presentment  essential  to  charge  drawer  and  indorser 483 

When  it  is  impracticable,  pleading 484 

As  where  the  maker  or  acceptor  has  absconded 484  -  486 

Or  removed  from  the  State 485 

Exceptions  from  general  rule  classified 485,   486 

Effect  of  bankruptcy,  insolvency,  or  death  of  maker  or  acceptor  486  -  488 

When  the  maker  or  acceptor's  house  is  closed 489,   490 

When  the  demand  to  be  made  of  an  agent 490 

Where  the  drawer  has  no  funds  or  right  to  draw 490,   491 

Unavoidable  accidents  preventing  demand 492,   493 

Demand  should  be  made  by  holder  or  his  agent 494,   495 

TO  WHOM   AND  WHERE 495  -  502 

To  the  acceptor  or  maker  at  his  residence  or  place  of  business 495 

Or  at  the  place  to  which  the  bill  is  addressed,  or  the  note  payable  496  -  499 

When  payable  at  a  bank  &c 496,   499 

When  the  bank  ceases  to  exist,  at  either  of  two  places 498,   499 

Where  there  are  several  makers  or  acceptors 500 

Alteration  of  bill  or  note 500-502 

Memorandum  as  to  place  of  payment 500  -  503 

MODE  OF  PRESENTMENT 503 

May  be  made  to  the  party  personally,  at  a  reasonable  time  and  place.  503 

Or  at  the  party's  residence  or  place  of  business 503,    504 

The  bill  or  note  should  be  actually  presented 504,   505 

Necessity  of  demand 505,    506 

The  paper  should  be  surrendered  only  on  payment  in  money . .  506,    507 
Mode  of  demand  illustrated  by  cases — in  case  of  a  lost  bill 

or  note 506-508 

Custom  of  banks  in  tshis  respect 508  -  510 

TIME  OF. PRESENTMENT  AND  DEMAND 511,     532 

Calculation  of  time,  when  paper  becomes  due 512 

The  period  of  a  month,  what  is 513 

Old  and  new  style,  difference  between 513,    514 

When  a  note  or  bill  payable  after  date  becomes  due 514,    515 

How  the  time  is  computed 512  -  515 

Usances,  definition  and  inconvenience  of 516,    517 

Days  of  grace,  number  of,  and  how  computed 517,    518 

e,  on  post  notes — on  promissory  notes 519  -  522 


TABLE   OF    CONTENTS.  15 

PAGE. 

Days  of  grace  form  part  of  the  time  a  note  or  bill  has  to  run 525 

At  what  time  they  expire,  what  hour 526  -  528 

Sundays  and  holidays — religious  festivals 529  -  532 

2.  Payment. 

Discharges  all  the  parties 532,    534 

By  an  accommodation  acceptor,  effect  of 532,    533 

By  a  surety  of  a  note,  effect  of 533,   534 

Relation  of  a  surety  maker  of  a  draft 534,   535 

Payment  by  an  indorser,  effect  of 535 

Payment  by  a  stranger — supra  protest 535,    536 

To  WHOM  PAYMENT  SHOCLD  BB  MADE 537  -  548 

Should  be  to  the  holder,  in  case  of  a  lost  or  stolen  bill  or  note. .  537,    538 

Possession  is  evidence  of  right  to  receive  payment,  when 537  -  540 

But  the  holder  must  have  the  legal  title 539 

Cases  of  forgery  and  mistake 541  -  547 

Notice  not  to  pay,  effect  of 538,    546 

The  person  transfering  paper  warrants  the  title 546 

Payments  by  mistake 541  -  547 

Care  to  pay  the  right  person  in  special  cases 547 

WHEN  BILL  OB  NOTE  CAN  BE  SAFELY  PAID 547,   548,   549 

Payment  must  be  made  in  money,  not  in  a  check  or  bills 550  -  552 

When  the  maker  of  a  note  is  appointed  executor  of  the  holder.  553,    554 

APPLICATION  OP  PAYMENTS 554  -  565 

In  the  case  of  accommodation  bills 564  -  567 

RELEASE  OF  PBINCIPAL  DEBTOR 565 

The  drawer  and  indorsers  not  in  relation  of  sureties  exactly 565 

Must  pay — resemblance 565,    566 

Agreements  with  prior  parties  for  delay 567 

Takiiig  new  securities 567 

Giving  time  by  valid  agreement,  effbct  of 567  -  569 

Giving  time  as  a  matter  of  grace 566 

Qualified  agreements 570 

Release  of  prior  parties,  effect  of. 569 

The  game  effect,  in  case  of  sureties 572 

Signing  notes  as  surety 572,    573 

Discharging  one  of  several  joint  makers 573  -  575 

Effect  of  such  discharge 574 

Giving  time  to  acceptor  does  not  discharge  the  drawer  or  indorser  for 

whose  accommodation  the  bill  was  accepted 575 

Compounding  with  the  principal  debtor,  receiving  dividend 575 

Part  payment  of  a  note  or  bill,  should  be  indorsed  on  it 575 

Should  be  surrendered  on  payment 576 

Receipt,  not  demandable  at  common  law 576,   577 

A  general  receipt  on  a  note  or  bill 577 

Evidence  of  payment  by  whom 577,   578 


16  TABLE   OF    CONTENTS. 

PAGE. 

May  be  contradicted 578 

In  respect  to  notes  and  drafts  not  negotiable,  the  maker  or  acceptor 

cannot  require  them  to  be  surrendered  on  payment 578 

Right  to  a  reasonable  acquittance 579 

Agreements  to  accept  notes  or  bills  in  payment 579,    580 

CHAPTER  X. 

OF   PROCEEDINGS   ON   NON-PAYMENT,  NOTICE. 

Notice,  a  condition  in  the  drawer  and  indorsees  contract 581 

Protest,  in  the  case  of  foreign  bills 581 

The  notary,  what  are  foreign  bills 582,    583 

Promissory  notes,  on  what  footing- 584 

Inland  bills  need  no  protest 584,    585 

Demand  and  protest,  according  to  what  law,  by  notary  himself.  585  -  587 

Notice,  when  necessary , . . . .  587 

NOTICE,  WHAT  TO  CONTAIN 588  -  601 

Misdescription,  effect  oK 589,    590 

Misstatement  in  notice,  what  must  be  stated  in  it 591  -  593 

Sufficiency  of  notice,  when  a  question  of  law 593  -  599 

Notice  of  protest,  sufficient 594,    595 

Rule  in  this  country,  recent  English  decisions 595  -  598 

Statement  as  to  time  of  dishonor 599 

That  holder  looks  to  indorser,  &c.,  for  payment 599,    600 

Need  not  state  who  is  the  owner 600 

Need  not  contain  a  copy  protest 601 

SERVICE  OF  NOTICE 601  -  614 

Former  rule,  personal  service,  modification 601,    602 

Mail  arrangements 603 

Service  by  mail,  our  statute 604,    605 

As  to  foreign  bills 607,    608 

Directing  the  notice,  at  the  party's  residence  or  place  of  busi- 
ness   608,    610 

Inquiry  as  to  residence 609  -  611 

Diligence,  when  a  question  of  fact  or  law 611  -  614 

TIME  OF  SERVING  NOTICE 614  -  625 

May  be  given  on  the  day  of  dishonor,  must  be  given  in  course 

of  the  next 614,    615 

Duty  of  holder  in  giving 615  -  618 

In  giving  notice  by  mail  of  the  next  day 617  -  621 

In  case  no  mail  leaves  the  next  day 622 

Who  are  to  be  considered  parties,  collection  agents 622,    623 

Holder  should  notify  all  he  intends  to  resort  to 623 

A  case  of  several  parties  giving  notice  successively 623,    624 

The  safe  course  in  respect  to  foreign  bills,  a  late  case 624,    625 

Reasonable  diligence  a  question  of  law 625 


TABLE   OF   CONTENTS.  17 

PAGE. 

NOTICE,  BY  WHOM  GIVEN 626  -  629 

Notice  is  something  more  than  knowledge 626 

Is  sufficient,  if  it  be  given  by  holder  to  all  the  parties 626 

Or  by  any  one  of  them 627 

The  party  in  possession,  or  party  in  interest  may  give  notice. .  627,  628 

One  of  the  parties  entitled  to  benefit  of  notice  given  by  another 629 

Safe  course  for  holder  to  take 629 

TO  WHOM  NOTICE  SHOULD  It  K    GIVEN 630  -  632 

Parties  not  entitled  to  notice 630 

Joint  indorsers,  not  partners;  deceased  indorsers 630,    631 

Some  exceptions  to  the  general  rule 632  -  634 

AVaiver  of  notice  by  agreement  or  by  negotiation 633  -  635 

A  waiver  not  a  new  contract 634 

How  alleged 636 

WHEN  NOTICE  NOT  NBCESSARY 636-647 

Not  necessary,  when  the  want  of  it  is  no  injury 636 

Where  the  indorser  has  been  secured 637,    638 

Or  where  the  paper  is  made  for  the  party's  accommodation 638 

As  to  drawer,  where  he  has  no  funds  or  right  to  draw 639  -  647 

Rule  illustrated 640-646 

Want  of  funds  does  not  affect  indorser 's  right  to  notice 646,    647 

Ignorance  as  to  party's  residence,  when  an  excuse 647,    648 

Diligence,  equivalent  to  notice 648,    649 

Delay,  when  excused 649 

Notes  not  negotiable,  indorsers  of 649,    650 

WAIVER  of  laches  by  subsequent  promise 650  -  655 

By  part  payment 653 

Conditional  promise,  &c 652-  655 

Evidence  that  the  promise  was  made  with  knowledge 653,    654 

Admission  of  liability 654,    655 

Case  of  estoppel,  recall  of  notice 655 

CHAPTER  XI. 

PLEADING   AND   EVIDENCE. 

/.  Pleading. 

General  rule  of  pleading 656 

Effect  of  verifying  a  pleading,  demurrer 657 

Rules  of  pleading,  as  applied  to  bills,  notes,  &c 658 

Action,  in  whose  name  brought 658  -  664 

Complaint  must  shew  title  in  plaintiff. 658  -  661 

Allegations  in  complaint  by  payee 659 

Actions  on  negotiable  paper,  in  whose  name  by  former  rule. . . .  660,    661 

Always  necessary  to  shew  title  in  plaintiff 660,    662 

Under  code,  plaintiff  must  be  the  real  owner 662 

P  roper  allegation  in  this  respect 663,    664 

B 


IS  TABLE   OF    CONTENTS. 

PAGE. 

Action  by  payee  of  note  or  bill  at  common  law 665 

Between  whom  such  paper  was  evidence  of  debt,  or  admissible 

under  money  counts 665,    666 

The  new  system  of  pleading 668,    669 

"\Vhen  the  plaintiff  sues  in  a  special  character 669,    670 

Complaint  by  payee  against  maker  of  a  note,  under  code 670,    671 

What  plaintiff  must  shew,  as  to  time  and  place  of  payment 671 

Action  against  the  acceptor  of  a  bill 672,    673 

Complaint  against  drawer  or  indorser 674 

Allegations  excusing  notice,  former  and  present  rule 675,    676 

As  to  consideration,  of  notes  not  negotiable 677 

When  the  action  is  between  original  parties  to  negotiable  paper 677 

When  brought  by  an  indorsee,  defence 678 

Want  or  failure  of  consideration 678,    679 

Possession  raises  presumption  of  title 679 

//.  Evidence. 

The  Pleadings  shew  what  must  be  proved 679 

Immaterial  averments 680 

In  actions  against  the  maker  of  a  note,  or  an  acceptor  of  a  bill 680 

Against  several,  handwriting  of  each  must  be  proved 680 

Not  so,  when  defendants  are  partners,  when  made  by  an  agent 681 

Action  against  joint  and  several  makers  or  acceptors,  proof. . . .  681,    682 

Acceptance  admits  drawing 683 

In  actions  by  indorsee,  proof,  special  cases 683  -  685 

Payee's  indorsement  must  be  proved 683,    684 

Bills  and  notes  payable  to  bearer,  presumption  as  to  title 684 

Plaintiffs  suing  as  partners,  must  prove  partnership 685 

In  the  case  of  a  note  payable  to  plaintiff  by  another  name 685 

Need  not  prove  prior  indorsements 685,    686 

Need  not  prove  consideration,  exception 686  -  692 

Who  to  begin,  party  holding  affirmative 687 

Proof  to  let  in  defence  against  an  indorsee 688  -  691 

Additional  proof  on  the  merits 691,    692 

Counter-claim  or  set-off 692 

Proof  in  actions  against  drawer  or  indorser 692  -  694 

Against  drawer  or  indorser  of  foreign  bills 694,    695 

Notice,  how  proved  in  special  cases 695  -  697 

Where  the  notary  or  agent  is  dead 695,    696 

Proof  of  contents  of  written  notice 697  -  699 

Parties  witnesses,  when,  recent  statute 699,    700 

Proving  signature,  subscribing  witness 701  -  703 

Mode  of  proving  signature  or  handwriting 703  -  707 

By  comparison  of  hands 705-707 


TABLE   OF   CONTENTS.  19 

CHAPTER  xn. 

DAMAGES,  OR  SCM   RECOVERABLE. 

PAGE. 

Interest,  the  common  standard  of  damages 708 

Interest  only  due  by  contract,  until  the  debt  becomes  due. ....  708,    709 
Regulated  by  agreement,  after  the  debt  is  due  legal  interest  is 

the  plaintiff's  damages,  implied  agreement  after  that 709  -  711 

Interest,  when  recoverable  as  damages 711,   712 

By  what  law  allowed 713-719 

Place  of  performance  governs,  when 716  -  722 

Damages  on  notes  payable  in  specific  articles. 723  -  725 

Notes  or  bills  payable  in  another  currency 726 

Notes  or  debts  payable  in  another  state  or  country,  exchange. .  725 -  729 

Re-exchange  on  bills  of  exchange 730  -  734 

Holder's  right  to  re-draw,  for  what  amount 732 

Damages  on  bills  fixed  by  statute  in  this  country 734 

Rate  of  damages  in  this  State 734,    735 

In  Maine  and  Massachusetts 736 

In  Connecticut  and  Rhode  Island 737,   738 

In  Pennsylvania 738 

In  Delaware  and  Maryland 739 

In  Virginia,  North  Carolina  and  South  Carolina 740 

In  Georgia  and  Florida 741 

In  Alabama  and  Mississippi 741,    742 

In  Louisiana 742 

In  Ohio 743 

In  Indiana  and  Illinois 743,   744 

In  Michigan 744 

In  Wisconsin 745 

In  Iowa 745 

In  Missouri 745 

In  Tennessee  and  Kentucky 746 

In  Arkansas 746 

In  California,  Oregon  and  Minnesota 747,   7;  48 

Rule  of  damages  by  the  law  merchant,  advantages  of 749 

Want  of  a  uniform  rule 750 


TABLE  OF  CASES. 


A. 

Abbott  y.  Wilmot, 750 

Aborn  v.  Boa  worth, 493 

Abel  v.  Button, 150,  118 

Abraham  v .  Plestoro, 257 

Ackland  y.  Pearce, 338,  «97 

Adams  T.  Jones, 191 

Adams  y.  Cordis, 727 

Adams  r.  Oakes, 639 

Adams  r.  Wordley, 425 

Adams  v.  Otterback, 511 

Aeby  v.  Rapelye, 352 

Ainslee  v.  Wilson, 374 

Agricultural  Bank  v.  Commercial  Bk.,  476 

Allen  T.  Williams 423 

Allen  v.  Dykers, 510 

Allen  v.  Rightmire, 220 

Allnutt  v.  Ashenden, 228 

Allen  v.  Thompson, 232 

Allen  T.  Hearn, 341 

Allen  v.  Suydam,....  387.392,402,444 

Allen  T.  Merchants'  Bank  of  N.  T.,..  185 

440,  448 

Allen  v.  Edmnndson, 014 

Allen  v.  Culver, 559 

Allston  r.  Contee, 558 

Alden  r.  Bloom ingdale, 059 

Alrord  v.  Baker, 214,  679 

Aldrich  v.  Henway, 49 

American  Bank  v.  Jennese, 635 

Andrews  r.  Chadbonrne, 188 

Andrew*  r.  Bam 430 

Anderson  T.  Anderson, 312,  430 

Anderson  r.  Drake, 162,  399,  485 

Anderson  T.  Van  Allen, 676 

Andrews  r.  Franklin, 142 

Anderson  y.  Weaton, 151 

Anderson  y.  Davis, 232 

Andenon  v.  Hawkins, 207 

Andrews  v.  The  Astor  Bank, 659 

Andrews  v.  Herriat, 179,  067 

Anonymous  r .  Harrison, 89 

Andrews  v.  Montgomery, 49 

Andrews  v.  Beeeber, 55 

Andrews  r.  Pond, 371,  180 

Angel  v.  Felton, S02 

Anfiinc  v.  Morsbead, 73 

Ancher  r.  Bank  of  England, 254 

Appleby  v.  Biddnlph, 134,  234 

Archibald  r.  Thomas, 176 

Arnold  v.  Camp, 192 

Arnold  v.   Dimond, 068 

Archer  v.  Marsh, 843 

Armstrong  T.  Hassey, 116 


Armstrong  v.  Brown 733 

Archer  v.  Dunn, 714 

Arnoldr.  Crane, 169 

Aspinwall  v.  Meyer,.  048 

Att wood  v.  Mannings, 86,  253 

Atwood  T.  Griffin, 132 

Atwood  v.  Crowdie, 431 

Atwater  v.  Streets, 581 

Atkinson  v.  Manks, 211,  420 

Austin  r.  Bostwick, 118 

Austin  T.  Vandemark, 104 

Austin  v.  Irans,   715 

Austin  r.  Burns, 139 

Austin  etal.  r.  Blue, 280 

Aubert  T.  Welsh, 553 

Avery  T.  Stewart, 155,  512 

Avery  T.  Latimer, 1 76 

Aymarr.  Sheldon, 262,  384 

Aymar  v.  Beers, 156,  387 

j  Ayer  T.  Hutchinson, 648 

B. 

Bank  of  Rochester  T.  Bowen, 104 

Bakerv.  Wheeler, 110 

Bank  v.  Flanders, 92,  150 

Barly  y.  Carswell, 84 

Barber  v.  Gingell, 87 

Bagster  r.  Earl  Portsmouth, 63 

Barnard  v.  Gushing, 146 

Bayley  v.  Taber, 151 

Bass  v.  Clive, 133 

;  Ball  v.  Allen, 132 

Barlow  r.  Broadhnrst, 140 

Baker  v.  Stackpole, 118 

Bank  of  South  Car.  v.  Humphrey*, .  116 

Bank  of  Troy  v.  Topping, 78 

Backus  T.  Danforth, 524 

Barney  v.  Seeley, 533 

Bank  of  Ireland  r.  Archer,  ....  409,  414 

Bank  of  Orleans  v.  Smith, 405,  476 

Bank  of  Washington  v.  Triplett, 404 

Barclay  T.  Bailey, 399 

Bank  of  U.  8.  T.  Waggoner, 361 

!  Bank  of  Maine  v.  Butts, 366 

Bank  of  Utica  T.  Wager, 356 

Bank  of  Utica  r.  Smalley, 356 

Bangs  r.  Strong, 355 

i  Barton  y.  Butler 334 

;  Barten  v.  Bnton, 333 

l  Beeeber  v.  Vrooman, 333 

Batter  man  v.  Pierce, 333 

Barn  urn  y.  Bvr.um, 331 

Baker  y.  Martin, 293 

.Bank of  Uticay.Ires, 292 


TABLE    OF    CASES    CITED. 


Bank  of  Virginia  v.  Ward, 307,  482 

Bank  of  Mobile  v.  Hugging. 476 

Bank  of  U.  S.  v.  Davis, ........  85,  475 

Bailey  v.  Dozier, 469 

Bank  of  Manchester  v.  Slason, 464 

Bank  of  Kentucky  v.  Pursley, 464 

Bank  of  Vergennes  v.  Cameron, 465 

Bank  of  U.  S.  v.  Leathers, 468 

Baker  v.  Gallagher, 429,  450 

Banbury  v.  Liggett, 419 

Banorger  v.  Hovey, 414 

Bank  of  Michigan  v.  Ely, 410 

Bank  of  Rochester  v.  Jones, 423 

Bank  of  U.  S.  v.  Smith, = 427 

Bank  of  U.  S.  v.  Russell, 438 

Bacon  v.  Brown, 554 

Bank  of  Portland  v.  Brown, 557 

Bank  of  Utica  v.  Ives, 566 

Bank  of  Utica  v.  Bender, 456 

Baring  v.  Clark, 439,  443 

Barton  v.  Baker, 402,  446,  487 

Barnard  v.  Young, 364 

Barnes  v.  Warlich, 359 

Bardv.  Poole, 366 

Baker  v.  Arnold, 56,  370 

Ballingalls  v.  Gloster, 382 

Bank  of  Genesee  v.  Patchin  Bank,..  348 

Bank  of  Orleans  v.  Merrill, 348 

Bank  of  Chilicothe  v.  Dodge, 348 

Bank  Corns,  v.  St.  Lawrence  Bank,..  347 

Babcock  v.  Beman, 249,  283 

Barlow  v.  Bishop 247 

Bartholomew  v.  Finemore, 247 

Babcock  v.  Bryant, 244 

Baldwin  and  al.  v.  Richardson, 648 

Bagnell  v.  Andrews, 642 

Barclay  v.  Wen ver, '-  635 

Bancroft  v.  Hall, «516 

Bank  of  U.  S.  v.  Lane, 610 

Bank  of  U.  S.  v.  Carneal, 459,  604 

Bank  of  Geneva  v.  Hewlett, 606 

Bank  of  Utica  v.  Phillips, 612 

Barnes  v.  Reynolds, 611 

Bank  of  Rochester  v.  Gould, 591 

Bailey  v.  Porter, 696 

Bank  v.  Rowell, 602 

Bank  of  Genesee  v.  Patchin  Bank,..  371 

Barker  v.  Sterne, 386 

Bateman  v.  Joseph, 381 

Bank  of  Sandusky  v.  Reoville,..  322,  350 

Bank  of  Salina  v.  Babcock, 321 

Bank  of  Chenango  v.  Hyde, 319 

Bank  of  Rutland  v.  Buck,.  316,  319,  431 

Bailey  v.  Baldwin, 292 

Bailey  y.  Burton, 257 

Bay  v.  C"ddington, 252 

Bay  v.  Gunn, 256 

Baxter  v.  Little, 261 

Bank  of  Niagara  v.  McCracken, 261 

Bank  of  Manchester  v.  Slason, 264  i 

Barrick  v.  Austin, 217 

Bar 'ow  v.  Bishop, 71 

Barker  v.  Mechanics'  Ins.  Co., 77  j 

Baya-d  y.  Shenck, 206 

Brown  y .  Lockhart, 202  i 

Bank  of  St.  Clairsville  v.  Smith,-...  209 

Bank  Ac.  v.  Sanders, 211  ! 

Barns  v.  Graham, 216 

Barker  y.  Jones, 216 

Bank  of  Orleans  v.  Barry,  188,  292,  312  j 


Barretto  v.  Snowden, 191 

Bank  of  England  v.  Newman, . .  165,  204 
Bank  of  Rochester  v.  Gray, ....  184,  464 

Bank  of  Orange  Co.  v.  Colby, 186 

Bank  of  Rochester  v.  Bowen, 105 

Bank  of  Rochester  v.  Monteath, .  106,  477 
Bank  of  St.  Albansv.  Gilliland,.  106,  322 

Ball  v.  Bank  of  Alabama, 699 

Bank  of  Com.  v.  Union  Bank,.  541,  683 

Bannister  v.  Roberts, 709,  713 

Bander  v.  Bander, 709 

Bailey  v.  Bidwell, 686,  688 

Bank  of  Missouri  v.  Wright  and  al..  728 

Ballister  v.  Hamilton 727 

Bank  of  U.  S.  y.  The  U.  States,....  734 

Bangor  Bk.  v.  Hook, 736 

Barker  v.  MoClure, 572 

Bailey  v.  Baldwin, 566 

Bangs  v .  Strong, 572 

Bay  v.  Churoh, 584 

Battertons  v.  Porter, 585 

Backhouse  v.  Harrison, 638 

Barrick  y.  Austin, 536 

Bank  v.  Homer, 528 

Bank  of  Washington  v.  Triplett, .  506,  520 

Baldwin  y.  Farnswortb, 499 

Bank  of  Md.  v.  Duvall, 509 

Bank  of  K.  v.  Hickey, 482 

Bank  of  U.S.  v.  Goddard 476 

Bank  of  Niagara  y.  McCrocker, 481 

Bank  of  Utica  y.  Magher, 481 

Barnett  v.  Willes, 486 

Bank  of  Utica  v.  Smith, 271 

Barry  v.  Crowley, 271 

Battle  v.  Coit, 665 

Bancks  v.  Camp, 676 

Bank  of  Limestone  y.  Phiney, 681 

Barnet  v.  Skinner, 682 

Bank  of  U.  S.  v.  Lyman, 653 

Bank  of  Lowville  v.  Edwards, 664 

Belmont  Bank  v.  Patterson 507 

Beeching  v.  Gower, 499 

Bellevre  v.  Eird, 503 

Bellmirev.  Bank  of  United  States,.  476 

Belly.  Mayor  of  New-York, 711 

Bedford  v.  Deakin, 572 

Beals  y.  Peck, 599 

Bcllasis  y.  Hester, 514 

Berry  y .  Robinson, 484 

Beebe  v.  McNeil, 277 

Belly.  Hagertown  Bank, 271 

Bell  y .  Frankis, 653 

Bceler  v.  Young, .   65 

Benton  y.  Bingot, 49 

Bellamy  y.  Majoribanks, 396 

Beckwith  v.  Sibley, 375 

Bell  v.  Wardell, 391 

Belly.  Leggett, 346 

Bearee  y.  Barstow, 351 

Bell  v.  Lent, 351,  354 

Bell  v.  Quinn, 340 

Berley  v.  Wingfield, 340 

Bell  v.  Hunt, 257 

Berthelon  v.  Belts, 257 

Bell  v.  Morrison, 112,  117 

Beardsley  v.  Baldwin, 141 

Becbe  v.  Bloodgood, 365 

Bennet  y.  Farrell,  126,  128 

Bennet  v.  McGauchy, ]  34 

Beardsley  v.  Warren, 565 


TABLE   OF    CASES   CITED. 


Belote'gex'rs  v.  Winne, 119 

Beekwith  v.  Angel, 230 

Benjamin  v.  TiUman, 169 

Beaverly 's  case, 63 

Berry  v.  U«her, 653 

Beers  r.  Col  ver, 431 

Begbie  T.  Levy, 162 

Sevan  v.  Eldridge, 626 

Berry  T.  St^ry, 316 

Belts  r.  Kiinpton 72 

Beckwith  v.  Con  all, 3o8 

Billings  v.Jane 268,  ««5 

Bigelow  T.  Keller, 277 

Bigelow  v.  Benton, 2-14 

Birckhead  v.  Brown, 239,  412,  449 

Bickerdike  v.  Bollman 243,  429 

Birchdeld  v.  Moore, 6d2 

Bi?j;s  T.  Dwight, 660 

Bibb  T.   Peyton, ($63 

Bionington  v.  Wai  Ha, 339 

Bi  Lk-s  v.  James, 340 

Bissell  r.  Briggs. 48 

BUhop  v.  Kowe, 204 

Billing  v.  Devanx, 4»* 

Bi  ntrbain  v .  Jones, 6« 

Blakely  T.  Grant,   250 

Blackman  v.  Doren, 451 

Blancbardv    BU<ell, 178 

Blessard  v.  Hurgt, 445 

Blood  v.  Humphrey, 70 

Blackenhagen  v.  Blundell, 125 

Blanchardv   Hilliard, 5 If, 

Blake  v.  Volan  1, 296,  301 

Blake  v.  Beaumont, 427 

Booth  v.  Smith, 198  J 

Bond  r.  Farnham, 446 

Bower  r.  Tierman, 672 

Boyd  v.  Hitchcock, 680 

Boyer  v.  Pack, 358 

Bowyer  \.   Brampton, 368 

Bo'idington  v.  ScLlc-nc^er, 397 

Bowen  v.  Newell, 397,  521 

Bogart  v.  Nevms, 446 

Boyce  T.  Edwards 407,418 

Boyd  r.  Cleveland, 651 

Booth  T.  Jioobs 663 

Boston  Bank  v.  Hodges, 508 

Bowen  v.  Sto-ldard, 737 

Bogart  v.  Kevins, 647 

Bodenham  v.  Purehas, 660 

Bowles  T.  Newly, 328 

Bonghton  v.  Bruce, 327 

Boi  hick  T.  Partly, 178 

Borough  v.  Moss, 269 

Boot  v.  Franklin, 158 

Bowers  v.  Hurl 171 

Bowerbonk  v.  Monteiro, 146 

Bond  v.  Latbrop, 118 

Bolton  T.  Dugdale 138 

Boyd  T.  Plnmb 103 

Bowen  T.  Argall,  108 

B<>chra  v.  8u.-r.ing, 67 

Boyd  v.  Brother*™ 95,  152 

Bogart  v.   Hcrtell 80 

Harden  v.  Fitch, 49 

Bonchell  v.  Clary,  65 

Boot  he  v.  Grove,   681 

Brown  v.  DavU, 64 

Brennan  T.  Hess, 66 

Bradley  v.  Huut, 137 


Brooks  v.  Hubbard, 724 

Branch  Bank  at  Montgomery  T.  Goff- 

ney , 524 

Bruce  v.  Bruce, 290,  646 

Brugh  v.  Legge, 636 

Brown  v.  Davis 259 

Brown  v.  Maffy,. .. 450 

Brown  v.  Barry, 448 

Brown  v.  Br<>wn, 324 

Brownv.  Hull, 314 

Brown  v.  Taber, 317 

Brown  v.  Mott, 323 

Bridge  v.  Gray, 118 

Brewtter  v.  liardeman, 119 

Brown  v.  Curtiss, 220 

Brewcter  v.  8  lence, 225 

B  own  v.  Wright 219 

Bristol  v.  Sprague, 255,  117 

Breck  v.  Co  e, 345 

Britton  v.  Hughes, 345 

Burt  v.  Gwin, 353 

Bruce  v.  Lee, 346 

Brook  v.  Enderly, 656 

Brazier  v.  Bryant, 557 

Bradford  v.  Cory, 284,  293 

Brockwaj  v.  Allen, 283 

Brycon  v.  Whitehead, 344 

Broughton  v.  the  Manchester  Water 

Works  Company, 77 

Brandon  v.  Nesbit, 73 

Bridges  v.  Berry, 200 

Breed  v.  Hillhouse, 243 

Brewster  v.  McCardell, 751 

Brockway  v.  Allen, 82 

Brown  v.  Turner, 6:-:2 

Bray  v.  Hadwen, 6^1 

Brindley  v.  Barr, 602 

Bruce  v.  Ly tie,... < 633,  636 

Brush  v.  Keeler, 369 

Brooks  v.  Avery 366 

Brownv.  Philadelphia  Bank, 464 

Brown  v.  Curtis,' 168 

Branch  Bank  of  Decatur  v.  Hodges,.  5u3 

Bridgeport  Bank  v.  Dyer, 611 

15ri.no!  v.  Warner, 2fi7 

Bradley  v.  Davis, 600,  699 

Bradford  v.  Cooper 713 

Bray  v.  Hadwen, 474 

Bromley  v  Fruier, 4»3 

Brown  v  McDermot, 495 

Bryan  v.  Philpot, 327 

Brown  v.  the  Butchers'  and  Drovers' 

Bank, 91,  160,  251 

Brown  v.  Feeler, 204 

Britton  v.  Webb, 44 

Bromwick  v.  Loyd, 60 

Brown  v.  Ne wt-fl, 58 

Bruce  v.  Pearson, 416 

Brown  A  Co.  v.  Coit, 420 

Brush  v.  Beeves, 165 

Butterwo-th  v.  Le  l»e-pencer, 1.-7 

Bunn  v.  Winthrop, 339 

linnn  v.  (i-.-v ?,4:i 

Bui  lard  v.  Bell, 165 

Hurdick  v  Green, 11.6 

Bue*n  r.  Sumner, 110 

Ituckman  v.  Pitcher, 3i>9 

Bullardv.  Bull, ):u 

Buller  v.  Crips, 50 

Butler  v.  Wright, 6«0 


24 


TABLE    OF   CASES    CITED. 


Bullfin  v.  Clarke, 69 

Burchfield  v.  Moore, 438 

Bushley  v.  Comae, 720 

Buzzell  v.  Snell, 720 

Buuce  v.  Westoott, 95,  168 

Buckley  v.  Campbell, 516 

Butler  v.  Rawson, 219 

Buckhardt  v.  Sappington, 712 

Buckle  v.  Eckhart, 98 

Buckner  T.   Finley, 47,  152 

Butler  v.  Stocking, 105 

Buckner  v.  Finley, 583 

Burke  v.  McKay, 584 

Bullock  v.  Wilcox, 269 

Burdick  v.  Green, 268,  302 

Butler  v.  Rawson, 293 

Bullitt  v.  Schribner, 283 

Burrill  T.  Smith, 289 

Burtv.  Place, 336 

Burton  v.  Stewart, 326,  333 

Buckley  T.  Guillbank, 356 

Burr  v.  Smith, 536 

Burrows  T.  Goodhue, 304 

Burt  r.  Horner, 234 

Bueknerr.  R-  E.  Bank, 279  I 

Burrows  v.  Perkins, 462  i 

Buchanan  v.  Marshall, 265,  654 

Byrne  v.  Schwing, 431 

c. 

Calvin  v.  Currier, 71 

Cannan  v.  Farmer, 67,     71 

Cabarga  T.  Seeger, • 704 

Cannon  v.  Beggs, 713 

Catlin  v.  Lyman, 713 

Catlin  v.  Hansen, 310,  679 

CayugaCo.  Bank  v.  Dill, 634 

Carter  v.  Flower, 452,  676 

Carter  v.  Burley, 584,  586 

Carter  r.  The  Union  Bank, 583 

Cattskill  Bank  T.  Stall, 605 

Cage  v.  Her, 558 

Caldwell  v.  Weutworth, 658 

Callow  v.  Lawrence, 286 

Carpenter  v.  Stevens, 494 

Case  v.  Heffner, 469 

Carroll  v.  Upton 456,  489 

Cayuga  Co.  Bank  v.  Bennett, 454 

Cayuga  Co.  Bank  v.  Worden,..  471,  483 

Campbell  v.  Pettengill, 429,  450 

Catlin  v.  Gunter, 323 

Carwick  v.  Vickey,  254 

Carnegie  v.  Morrison, 407 

Carrollton  Bank  v.  Tayleur, 407 

Carlisle  v.  Treara, 356 

Castle  v.  Candee, 266 

Case  v.  The  Merch.  Banking  Ass., ...  258 

Cady  v.  Shepherd, 118 

Carter  v.  Wballey, 115 

Caldwell  v.  Stileman, 122 

Calder  v.  Rutherford, 123 

Casev.  Abeel, 123 

Cash  v.  Reunion, 138 

Calpoys  v.  Calpoys, 137 

Catlin  v.  Gunter, 186 

Carew  v.  Northrop, 1 76 

Caldwell  v.  Cassidy, 156,  427 

Camidgev.  Allenby, 207,  241.  489 

Caines  r.  Bleecker, 87 


Cannan  T.   Brice, 370 

Canal  Bank  v.  Bank  of  Albany,. .  190,  290 

400 
Cayuga  Co.  Bank  v.  Hunt,.  160,  360,   367 

Chetham  v.  Ward, 574 

Chenowith  A  Co.  v.  Chamberlain, 582 

Chouteau  v.  Webster, 610 

Chapman  r.  Keane, 628 

Chick  v.  Pillsbury, 618 

Chitty  v.  X ;>i<h, 557 

Chapman  v.  Walton, 522 

Churchill  T.  Suter, 350 

Chadbourn  r.  Watts, 350 

Chappel  v.  Brockway, 343 

Chase  v.  Taylor, 463 

Chanoine  v.  Fowler, 463 

Charnley  v.  Gundy,.... 302 

Champion  v.  Terry, 302 

Church  v.  Sparrow, 106 

Champion  v.  Bostwick, 96 

Chase  v.  Barrett,  97 

Chautauque  Co.  Bank  T.  Davis, 269 

Chewning  v.  Gatewood, 272 

Central  Bank  v.  Davis, 272 

Chapman  v.  White, 396,  406 

Child  v.  Morins, 78,  248 

Chapman  v.  Fish, 248 

Chapman  v.  Robertson, 177,  7 1 6 

Chappell  v.  Bis«ell, 659 

Churchill  v.  Gardner, 671 

Chamberlain  v.  Hopps, 188,  671 

Chappel  v.  Spencer, 501,  681 

Chapman  v.  Searle, 211 

Chambers  v.  Winn, 216 

Chamberlain  v.  Gorham, 217 

Chapin  v.  Merrill, 224 

Charles  v.  Marsden,... 321 

Charter  v.  Beckett, 223 

Chapman  T.  Durant, 202 

Chapman  v.  Black, 1 . .  • 354 

Chamberlyn  v.  Delerieve,  .1 199 

Churchv.   Clark, 497,  527 

Clayton's  Case, ...  - 556 

Clark  v.  Devlin, 571 

Clark  v.  Farmers'  Man.  Co., 208 

Clapp  v.  Rogers, ' 117 

Clark  v.  Minton's  adm'r 453 

Cloyes  v.  Thayer 356 

Clark  v.  Young  &  Co., 204 

Clair  v.  Barr, 487 

Clarke  v.  Gordon, 422 

Clark  v.   Cock, 407 

Clark  v.  Farmers'  Man.  Co., 165 

Clark  v.  Young, 262 

Clerke  v.  Martin, 169 

Clark  v.  Signurney, 266 

Cleridge  v.  Dalton, 640 

Clode  v.  Bayley, 62.3 

Clay  v.  Smith, 386 

Claxton  v.  Swift, 50,     53 

Clason  v.  Morris, 633 

Clark  v.  Yale, 547 

Clarke  v.  Sharpe, 609 

Clarke  v.  Russell, 448 

Clay  v.  Oakley, 602 

Clute  v.  Small, 95,  153 

Cleveland  v.  Loder, 361 

Com.  Bank  of  Lake  Erie  v.  Norton,.     88 

Count  v.  Thompson, 600 

Cookendorf  v.  Preston, 621 


TABLE  OF   CASES   CITED.  25 

Collott  T.  Ilaight, 675    Connor  T.  Martin, 71 

Cooler  v.  Davu, 676    Cornell  v.  Monltoo, 612 

Cook  r.  Litobfield, 692    Conig  r.  Bayard, 439 

C-id-liniston  v.  Hunt, 114    Con  rod  T.  Williams, 842 

Conraen  T.   Hamlin, 122     Cook  T    Bradley, 327 

Cone  v.  Baldwin, 312     Cook  r.  Mix 328 

Copp  T.  Sawyer, 324    Colvitle  v.  Besley, 326 

Colt  v.  N..bie, -474    Crook  v.  Jardis 318 

Cowqna  v.  Lamierburn 7,'u     Crocker  r.  Geicbell, 473 

Cuckrell  v.  Warner 726  I  Crawford  v.  Branch  Bank,   623 

Connec  icut  v.  Jackson, 357    Cross  v.  Andrews, 63 

Cockney  r.  F.-rrest, 352    Craig  v.  Sibbett  <fc  Jones, 424 

Cool klge  Y.  Russell, 141     Crandall  v.  Bradley 421 

Cook  r.  Colehan, 142    Crawford  T.  Milkpaugh, 436 

Coolidg«  v.  Ingle* 146    Cromwell  v.  Wing, 651 

Cockell  T.  Gray, 155    Crawford  v.  Mill»p»iogh 672 

Cotav.Uuck, 143    Crofts  T.  Beale, 377 

Coxgi.l  v.  The  American  Ex.  Bank...   189    Cromwell  v.  llinson, 399,  490 

2¥0,  544    Crawford  r.  Cully 143 

Cole  r.  Sacket,  192    Crutchley  v.  Clarence, 132 

Collins  v.  Line  In, 136    Crutchley  v.  Man, 1X3 

Conroy  r.  Warren 188    Crossthwait  v.  Ross,.... Iu2 

Coaler  and  al.  r.  Thomason, 632    Critchlow  v.  Parry 2b9 

Cory  and  al   T.  Soutt, 639    Crowe  v.  Clay, 295,  2V7 

Collins  v.  Allen, 692    Crookerv.  Crane, 347 

Com  stock  v.  Hoag, 692    Crank  v.  Frith, 7«l 

Ooddington  T.  Davis, 4S3    Crossley  v    Ham,  448 

Commercial  Bank   v.  St.  Croix  Man.  Crwae  v.  Smith, 613 

Company,.'    483    Crofts  T.  Beale, 327 

Cooper  r.  Le  Blanc, 433    Crocker  T.  Getcbell, 692 

Coolidge  v    Payson, 407,  414    Cruger  T.Armstrong, 44,    57 

Colvin  v.  Holbrook, 404    Crane  v.  Hnbbell, 366 

Commercial  Bank  of  Penn.  T.  Union  Cram  v.  Hendricks, 363 

Bank  of  N.  Y., 404,460,476    Curtis  v.  Inerarity, 708 

Corning  v.  Colt, 416  Cunningham  v.  Hudson  River  Bank, .  708 

Cox  v.  Troy 418,  434    Cuyler  r.  Cnyler 436 

Commonwealth  T.  Webster, 7<>6  '  Cunningham  v.  Wardell, 416 

Cook  v.  Satterlee, 41,  124    Camming  v.  Fisher, 237 

Cope  v.  Orerton, 6ft    Cuyler  r.  Stevens,   266 

Coddington  v.  Bay, 57  \  Cnrtis  v.  Smallinan, 234 

Col  man  T.  Eager, 623    Curti.«s  v.  Brown 225 

Col  man  v.  Ewing 527    Cumst  >n  v.  McN'air, 234 

Cooks  v.  Mastertuan, 190,  542    Cnshman  v.  Bailey, 97 

Coon  v.   Brook,.... 70    dimming  v.  Fisher, 452 

Collins  v.  Martin, 310    Cutbbert  v.  Haley, 351 

Corrne  v.  Black hurne, 74    Cuxhmnn  v.  Haynes, 140 

Collins  v.  Emmett 95    Cumpston  v.  McNair, 96 

Cox  v.  M'Burney, 110    Cnyler  r.  Stereos, 469,  483 

Cox  and  al.  v.  Troy 2Sr>    Cuyler  v.  Sandfnrd 366 


Colling  T.  Butler, 381 


Cuinmings  v.  Williaics, 363 


Conroy  v.  Warren, 180,  398 

Corney  v.  Da  Costa, 446  T) 

Com  tors  v.  Carpenter, 720  { 

Cottrtll  v.  Conklin, 230,  274    Danforth  r.  Evans, 369 


Coles  v.  Colea, 110 

Commercial  Bk.  of  Albany  v.  Hughes,  379 

397 

Coir*  v.  Davis, 247 

Cook.  v.  Nathan 235 

Coddington  v.  Bay,.  821 


David  v.  Ellice, 194 

Dayton  v   Trull 198,445,  41'5 

Danev.  Kirkwell, 63 

Davisv.  Allen, 115 

Davison  v.  Robertson, 162 

Davis  v.  Garr, 366 


Cook  v.  Fellows, 132    Darifs  v.  Wilkinson, 139 

Cooper  v.  Meyer, 129    Davisv.  Clark, 174 

Coit  v.  Tracey, 118    Day  v.  Murray, 435 


Cooke  v.  Bank  of  Tennessee 63! 

Coleman  v.  Carpenter, 615 

Colliiw  v.Allen 260 

Corro  v.  Port  Henry  Iron  Co., 378 

Cornwall  v.  Gould 375 


Day  v.  Stuart, 370 

Dabney  v.  Stidger, 631 

Pagfpttv.  Pratt, 713 

Davis  v.  Coleman, 714 

Davies  v.  Dodd 304 


Cowperth wait  v.  Sheffield,.  379,  406,  477    Da  Sllva  T.  Fuller, 649 

Cowiev.  Halsall, 602    Dana  v.  Sawyer, 629 


26 


TABLE   OF    CASES    CITED. 


Dangerfiold  v.  Wilby, ....  .  302 

Day  v.  Mur  ay, 547 

Davies  v.  Francisco, 4s9 

Davis  v.  Herrick, 613,  626 

Darbishire  V.  Parker, 619 

Day  v.  Ridgeway , 636 

Dana  v.  Underwood, 190,  666 

Day  and  al.  v.  Nix, 334 

Daeos  a  v.  Jones, 341,  342 

Deminds  V.    K'i  kh;un, 618 

Do  Mott  v.  Starkey H9I 

De  la  Chauinette  v.  Bank  of  England,  208 

Depew  v.  Wheelan, 302 

Decker  v.  Mathews, 303,  319,  66tf 

Denn ist on  v.  Bacon,. 311,  317 

Deering  v.  Chapman, 312 

De  Mott  v.  Starkey, 321 

Dewar  v.  Spar,    184 

Depeau  v.  Humphreys, 183 

De  Wolf  v.  J  hnson,. 181 

Deveau  v    Fowler, 122 

Deeriiig  v.  Chapman, . .  336 

Degell  v.Odell, 353 

Decker  v.  Miller, 553 

Dean  v.   Dodds, 351 

Deforest  v.  St-ong, 363 

Dean  v.  Newball, 436 

De  Tastel  v.  Baring, 731 

De  Peau  v  Humphreys, 717 

De  Wittv.  Walton, 378 

De  Wolf  v.  Murray, 381,  399,  490 

Dennis  v.  Walker, 486 

Deacon  v.  Stodhart 536 

Delafleld  v.  State  of  Illinois, 60,  85 

De  Grand  v.  Banks,   495 

Denny  v.  The  Manhattan  Co., 404 

Denny  v.  Defonttine, 152 

Doming  v.  Colt 121 

De  Bertv.  Atkinson, 491 

De  Forest  v.  Frary, HI,  213 

Dennv.Hall 222,229 

DeWolfv.  Raband, 227 

Dick  v.  Leverich, 432 

Dickerman  v.  Abraras, 70 

Dingwell  v.  Dunster, 436 

Dix<.nv.  Elliot, 653 

Dillon  v.  Rirnmer, 200 

Dix  v.  Van  Wyck, 351 

Doe  v.  Warren, 709 

Doe  v.  Luckermore, 706 

Doty  v.  Smith, 682 

Doolin  v.  Ward 345 

Downs  v.  Planters'  Bank, 618 

Doebree  v.  Eastwood, 616 

Dodge  v.  Bank  of  Kentucky, 619 

Dowe  v.  Drew, 357 

Dole  v.  Weeks,   166  I 

Donnes  v.  Church, W2  j 

Downer  v.  The  Madison  Co.  Bank,..  405  j 

Douglass  v  Cowlcs  and  Smith, 416  j 

Douglass  r.  Witkeson, 167,  279  i 

Dolev.GoM 470,  593 

Dow  v.  Russell, 584  j 

Donally  v.  Wilson, 558 

Dolfus  v.  Frosh, 4(>2,  275 

Doty  v.  Bates, 100 

Doubleday  v.  Muskett , 99 

Dobr.Halsey 98,  121 

Dow  v.  Russell, 186,  210 

Dodd  v .  Edwards, 43  6 


Dodds  v.  Wilson, 62 

Downer  v.  Madison  County  Bank,...  47*> 

Downer  v.  Reauitr, 463 

Dobbins  v.  Brandley, 244 

Dole  v.  Young, 232 

Douglass  v.  Kathbone, 238 

Douglass  v.  White, 294 

Douglass  v.  Howland, 240 

Dowe  v.  Schutt, 353,  323 

Doe  v.  Warren, 358 

Dodge  v.  Adams, 327 

Drinkwater  v.  Tibbetts,. 635 

Dry  Dock  Bank  v.  Arner.  Life  Ins.  and 

Trust  Co., 363 

Driggs  v.  Rockwell, 2i>0 

Draper  v.  Clemens, 504 

Duncan  v   Course, 583 

Dunham  v.  I»ey, 365 

Dunn  v.  Adams,     186 

Duncan  v.  McAffee 209 

Dugin  v  the  United  States, 271 

Dutchess  Co.  Bank  v.  Ibbottson, 4(56 

Duncan  v.  Scott, 131.  325 

Dunham  v.  Gould, 357 

Duncan  v.  Lowndes  <fc  Bateman, 105 

Duncan  v.  McCuliough, 486 

Durkin  v.  Henderson, 164 

Dubose  v.  VVheddon, 65 

Douglass  v.  Reynolds,  .....' 378 

Duffield  v.  Creed, 553 

Dwight  v.  Pease, 254 

Durham  v.  Manrow 229 

Durkee  v.  Marshall, 216 

E. 

Rag!  e  Bank  v.  Chapin, 474 

East  Haddarn  Bank  v.  Scovill, 476 

Eagle  Bank  v.  Smith, 207,  667 

Eagle  Bank  v.  Hathaway, 628 

East  India  Co.  v.  Sandys, 73 

Early  v.  Reed 105 

East  Haddam  Bank  v.  Scovill, 4(  4 

Earle  v.  Reed, 65 

Eaves  v.  Henderson, 314 

Easton  v.  Pratchett, 325 

Earl  v.  Page, 335 

Eastwood  v.  Kenyon, 238,  339 

Edmunds  v.  Groves, 687 

Eddy  v.  Stanton, 234 

Edgar  v.  Boi*, 723 

Edmonds  v.  Gates, 596 

Edwards  v.  Jones, 373 

Edwards  v.  Dick, 289,  350 

Eddie  v.  East  India  Co  , 254,  510 

Eggleston  v.  Shotwell, 361 

Egberts  v.  Wood, 121 

Ege  v.Kyle 209 

Egg  v.  Basnet, 553,  578 

Ehle  v.  Judson, 329 

Echelberger  v.  Finley, 449 

Ely  v.  Killon 314 

Ellis  v.  Com.  Bank  of  Natchez, 586 

Ellis  v.  Brown, 273 

Ellis  v.  Warner, 351 

Ellsworth  v.  Brewster, 666 

Elton  v.  Markham, 669 

Ellwood  v.  Monk, 224 

Ellis  v.  Wheeler, 132 

Elliott  T.  Cooper, 133 


TABLE   OF    CASES    CITED. 


Elton  v.  Denny, 634 

Ellis  T.  Commercial  Bank,  48V 

Elford  T.  Twd, 399 

Emery  T.  Irckhart, (67 

Eiutnott  v.   Kearus, 211 

English  T.  Darby, 294,   WW 

EDO  r.  Woodworth, 009 

Erwin  T.  Sounder*, 313 

Erwin  r.  Lara  born, 242 

Erskine  v.  Murray, 138 

E*laile  r.  Sowerby, 4-'»6,  4VU 

Evan*  T.  Uod.  rwoo-1 142 

Everson  v.  Carpenter, 65 

Everett  T.  Cox, 97 

Bran*  r.  Cramltngton, 256 

Evans  r.  St.  John 497 

Ererard  r.  Wataon, 597 

Ex  parte  Graham, 432 

Ex  part*  ITMOD, 135 

Ex  pirte  Tootle, 141 

Kx  parte  Wilson 45 

Ex  parta  BotiMtnaker, 73,   573 

Ex  parte  William-, 120 

Ex  parte  Wilg.n 676 

Ex  parte  Harrison, 24] 

Ex  parte  Ainawortb, 367 

Exon  r.  Russell, 501 

-  Bank  v.  Gordon 477 

Exter  Bank  T.  Sullivan, 119 

F. 

Fam.ingand  al.  v.  Conaequa,..   131,   722 

FallisT.  Griffith, 106 

FalUr.Gaitben,..   62 

Fayle  r.  Bird, 481 

Farmers'  Bank  T.  Reynold!, 482 

Farley  V.Cleveland, 224 

Fake  T.  Eddy, 719 

Falesr.  Russell, 299,  300 

Farmer'i  Bank  v.  Vanmeter, 452 

Farnara  T.  Brooks, 62 

Faulder  T.  Silk 04 

Farquhvr  T.  Soutney, 564 

Faircbild  r.   Holly 656 

Fall  River  Union  B.mk  T.  Willard,..  605 

Farmers'  Bank  T.  Duvall 611 

Farnbum  T.  Inghim, 315 

Faswell  T.  Kennett, I'M 

Faneonrt  r.  Tborne 1X8 

Farmer  v.  R*n<i, 272 

Fallen*  r.  Mercantile  Bank, 404,  522 

Fanner*'  end  Mechanic*1  Bank  Ac.  v. 

Butchers'  and  Drovers'  Bank, 4(40 

Fairlee  r.  Herring 41 - 

Farlenr.SiU, 64 

Fen  wick  r.  Se<r» 179 

Fennon  T.  Farmer, 1  *.'. 

Ferilon  r.  Oondry, 157 

Fellow*  r.  Harrington, 

Ferry  v.  Ferry, T»« 

Fellow*  r.  Prenlisi, 672 

Fcntura  r.  Pocook, 573 

Fenby  v.  Pi  itchard 323 

Ferris  r.  Bond,   134 

Fcntum  T.  Pocoek, 295 

Fergusnn  r.  Oliver, 336 

Fi-lier  r.  The  Morris  Canal  and  Bank- 
ing Company 60 

FiUgerald  v.  Williams, 045 


Flake  T.  Hutchinson, 223 

Flske  T.  Foster, 736 

Fitch  r .  Button, 436 

Fitch  v.  Jones, 432 

Fitshngh  v.  Runyon, 148,  313 

Finkv.  Cox, 325 

FUker.  Witt,.   143 

Held  v.  Carr, '663 

Fitehr.  Redding, 377 

Field  T.  Nickerson, 387 

Fisher  v.  Foster, 3*0 

Flint  T.  Rogers, 496,  627 

Fleming  v.    Fulton,.     691 

Fleming  v.  McClure, 682 

Fletcher  v.  hlodgctt, 14* 

Fleming  r.  Sloouiu, 333 

Flint  v.  Day, 230 

Flecknerv    Bai.k  of  U.  6., 369 

Folger  r.  Chaw, 267 

Folger  v.  Chase, 497 

Foster  r.  Shattuck, 433 

Foden  v    Sharp, 168 

Forster  v.  Fuller 79 

Fox  v.  Drake, 90 

Forbes  r.  Tantfield, 357 

Fowler  v.  Van  Surdam, 369 

Fox  r.  Reil, 175 

Foster  v.  Floyd, 176 

Foster  v.  Shatluck, 190 

Foot  v.  8abin, 104 

Foxv.  Hanbury, 112 

Foster  v.  Fuller, 248 

Fordv.  Hitchcock, 64 

Folti  v.  May 353 

Foot  T.  Brown, 221 

Franklin  v.  Vanderpool, 35:8 

Fry  T.  Hill, 389,  399 

Freeman's  Bank  T.  Perkins, 628 

Freeman  v.  Kennell, 080 

French  v.  Kennedy, 709 

Frear  v.  Evertson, 55 

Free  T.  Hawkins, 289 

Francis  T.  Cattleman 712,  713 

Freakley  v.  Fox 553 

Frisbee  r.  Hoffnagle, 328 

Freleighv.  Platt, 328 

Franklin  v.  Smith, 445 

French  T.  Bank  of  Columbia, 440 

FrancU  v.  Del  Banco, 302 

Freeman  v.  Boynton, 305,  400 

Fianklin  v.  March, 132 

Irvv.  Rousnean, 130 

Fuller  v.  Smith 540 

Furtado  r.  Rogers, 73 

Fnrroan  v.  Hankens, 390 

Fnrniss  r.Gilcbrist, 321 

G. 

Gardiner  v.  Caltrnder, 314 

(iaither    r.    Fanners'   Ac.    Bank    of 

r^etown, 353 

O*rdner  v.  Gardner, 653 

•  inr'lticr  v.  Hopkins, 224 

Gardner  v,  Oliver  Lee  Bank,....  178,  386 

Gardner  T.  WaUb «8l 

Gallery  r.  Prindle, 144 

Gaffrey  T.  Dennis 720 

Galway  r.  Matbew, 082 

Gamage  T.  Hutch  ins, 221 


28 


TABLE   OF    CASES    CITED. 


Gaortner  v.  Trustees  of  Canajoharie, .  120 

Grant  v.  Shuster, 123 

Grant  v.  Vaughan, 130,  373 

Graves  v.  May, 115 

Galers  v.  Maderly, 72 

Graves  v.  Mery,  115 

Galpin  v.  Hard, 151 

Gitnsevoort  v.  Williams, 103 

Gazzaiu  v.  Armstrong's  ex'rs, .....    .  441. 

Gannells  v.  Alexander, 704 

GaylorJ  v.  Van  Loon, 154,  708 

Galpin  v.  Hard, 485,  486 

Gammon  v.  Schmoll, 419 

Gay  v.  Pnyne, 674 

Gage  v.  Kendall, 661) 

Garvey  v.  Fowler, 66S 

Geiger  v.  Cook, 327 

Geary  v.  Physic, 150 

Geill  v.  Jeremy, 621 

George  r.  Surrey, 91,  134 

Gill  v.  Cubit, 318 

Giles  v.  Bourne, 161 

Gibbs  v.  Cannon, 221,  242,  489 

Gilbert  v.  Dennis, 470,  593 

Gilmore  v.  Spies, 237,  485 

Gist  v.  Sybrand, 484 

Gist  v.  Mason, 73 

Gillespie  v.  Hanahan, 486 

Gillett  v.  Averill, 497 

Gilbert  v.  Williams, 522 

Gibson  v.  Minet, 43 

Gibbs  v.  Fremont, 721 

Gilbert  v.  Dennis, 306,  507 

Girardy  v.  Richardson, 339 

Gillrnan  v.  State  Bank, 372 

Gillett  v.  Fairchild, 258 

Gibbs  v.  Mather, 427 

Gilman  v.  Peck, 206 

Gillett  v.  Hill, 211 

Glassford  v.  Laing, 356 

Glenn  v.  Grover, •  •  707 

Glnsgo  w  v.  Prattle, 588 

Gloucester  Bank  v.  Worcester, 571 

Gleason  v.  Henshaw, 62 

Goss  v.  Nelson, 142,  154 

Gowan  v.  Jackson, 1 56 

Goodsell  v.  Myers, 246 

Good  v.  Elliot, 341 

Goodtitle  v.  Br^ham, 705 

Goodwin  v.  Holbrook, 215 

Goodenow  v.  Tyler, 202 

Goodwin  v.  McCoy, 425 

Goodsell  v.  Myers 65 

Goodman  v.  Eastman, 438 

Goodin  in  v.  Harvey, 309,  318,  601 

Goodall  v.  Dolley, 387,  444 

Goodman  v.  Harvey, 538 

Goodale  v.  Holdridge, 340 

Goodrich  v.  Gordon, 144,  407,  409 

Godwin  v.  McGehee, 710 

Gowan  v.  Jackson, 385,  388 

Gould  v.  Chase, 261 

Goddard  v.  Ly  man, 254 

Gore  v.  Gibson, 689 

Gordon  v.  Price, 704 

Goupy  v.  Harden, 389 

Gordon  v.  Phelps, , 720 

Gordon  v.  Nelson, 275 

Gould  v.  Kobson, 569 


Goddard  &  St.  John  v.  The  Merchants' 

Bank, 643 

Goddin  v.  Shipley, 524 

Gold  v.  Phillips, 224 

Gower  v.  Moore, •  •  •  453 

Goshen  Turnpike  v.  Hustin 217,  312 

Goddard  v.  Cults, 314 

Gough  v.  Staats, 63,  155 

Griffithv.Reed, 374,  376 

Greenleaf  v.  Kellogg, 358 

Green  v.  Goings, 385,  427 

Grifforn  v.  Jacobs,, 272 

Grinnell  v.  Schmidt, 252 

Grant  v.  Seitsinger, 252 

Grand  Bank  v.  Blanchard, 615 

Griswold  v.  Waddington, 649 

Griswold  v.  Slocum, 230,  273 

Granite  Bank  v.  Ayres, 455 

Glasgow  v.  Copeland, 449 

Grant  v.  Healey, 726 

Graves  v.  Dash, 733 

Green  v.  Elmer, 349 

Greene  v.   Goddai'd, 733 

Green  v.  Croft,   577 

Grant  v.  Ellicott, 323 

Grangrae  v.  Arden, 325 

Grandin  v   Le  Roy, 316 

Greeley  v.  Thurston,  525 

Gregory  T.  Paul, 68 

Gray  v.  Milner, 1 74 

Greenslade  v.  Dower, 101 

Grew  v.  Bevan 325 

Gray  v.  Mathias, 339 

Griswold  v.  Waddington, 73,  338 

Greelev.  Parker, 407,  414 

Grant  v.  Shaw, 414,  422 

Gray  v.  Donahue, 135 

Graves  v.  Key, 578 

Gieen  v.  Deakin, 104,  110 

Graham  v.  Hope, 115 

Grafton  Bank  v.  Kent, 573 

Grugeen  v.  Smith, 596 

Griswold  v.  Slocum, 168 

Grew  v.  Burditt, 311 

Grinnell  v.  Schmidt,... 658 

Grutacap  v.  Woulluise, 728 

Guild  v.  Zager, 286 

Gwinnell  v.  Herbert, 287 

Gurney  v.  Langland, 705 

Gunson  v.  Metz, 401 

Guernsey  v.  Burns  and  al., 661 

Gurney  v.  Behrend, 61 

H. 

Hansoullier  v.  Hartsink, 1 44 

Hartley  v.  Wilkinson, 1 45 

Hay  wood  v.  Perrin, ....   146 

Hatch  v.  Searles, 432 

Harrison  v.  Close  and  al., 436 

Hartsman  v.  He&shaw, •  •.  •  •  •  433 

Han'ord  v.  M'Nair, 96 

Harris  v.  Warner, 293 

Harris  v.  Johnson, 204 

Hargrove  v.  Dusenbury, 207 

Hawes  v.  Armstrong, 241 

Haxtun  v.  Bishop, 261 

Hull  v.  Farmer, 229 

Hallv.  Phelps, 176 


TABLE   OF    CASES    CITED. 


29 


Hawking  v.  Walking, 17ft 

llaveng  v.  Hunt'mgtoa, 286 

Hawkins  v.  Cardy, 380 

Hale  r.  Bailey, 275 

Hall  v.  Newcomb, 236,  274 

Hart  v.  Alexander, 194 

Halliday  y.  Atkinson, 170,  311 

Hartford  Bank  v.  Stedman, 601 

Hawksv.  Salter, 021 

Harrison  v.  Edwards, 185,  210 

Harris  v.  Robinson, 648 

Hat  field  v.  Perry, 699 

Hatch  v.  Frayes, 169 

Hague  v.  RoUestoi, 112 

Hackloy  v.  Patrick, 118 

Hartv.  Potter, 106 

Haggerty  y.  Taylor, 109,  114 

Harrison  y.  Sterry, 121 

Harrey  v.Kay, 98 

Hal  ford  v.  Cameron*'  Ac.  Railway  Co.    91 

Hay  y.  Goldsmith, 87 

Hall  v.  Williams, 48 

Hacket  v.  Martin, 65 

Havens  v.  Huntington, 54 

Hasxard  v.  New  Eng.  M.  Ing.  Co.,..     62 

Halliday  y.  MoDougall, 49 

Barker  T.  Anderson, 57 

Harrison  T.  Richardson, 64 

Hart  v.  Deamen, 64 

Harris  T.  Benson, 585 

Hartridge  v.  Weasen, 583 

Hawley  v.  Foote 580 

Jfiirlwickev.  Fannerg'  B'k, 733 

Hargous  v .  Lahens,   735 

May  wood  r.  Bank  of  England, 506 

Hartford  Bank  v.  Barry, 614 

Harrington  v.  Fry, 702 

Hartford  Bank  T.  Parry, 494 

Harrison  v.  Ruscoe, 475 

Haley.  Burr, 489 

Hay  wood  y.  Perrin, 503 

Hartley  v.  Cage, 470,  526 

Hart  y.  Wilson, 466 

Halliday  y.  Martinet, 466 

Halliday  y.  McDougal, 464 

Hayncs  y .  Birkg,     469 

Harris  y.  Benson, 462 

Hackley  y .  Spragne, 350 

Uasey   y.  White  Pigeon,  Beet  Sugar 

Company, 417,  477 

Halstedy.  the  Mayor  of  N.  Y......  417 

Harvey  v.  Martin, 418 

Hamtneriley  y.  Knowlcg, 563 

Haynes  v.   I!irkg, 649 

Hall  v.  Fuller, '  646 

Ha  deman  y .  Cowan, 525 

Harris  v.  Bradley, 646 

Hill  v.  Haprart, 364 

Hart  y.  Palmer, 321 

Hall  v.  Hall 312 

Hall  y.  Wilwn, 318 

Hawaii  v.  Whitmore, 312 

Hallet  v.  Holmes, 294 

Hall  y.  Constant, 296 

Hansard  y.  Robinson, 299 

Hastings  v.  Win  wall, S68 

Harrison  r.  Williamson, 880 

Hark er  v.  Anderson, 396 

Harbecky.  Craftg, 398 

Harris  y.  Clark, 406 


Harrington  y."  St ration, 335 

Harlan  v.  Read, 336 

Hay  v.  Ayling, 336,  368 

Haxton  v.  Bishop, 427,  482 

HanUy  y.  Dobbin, 135 

Hacter  y.  Jeffery ,  126 

Hayes  y.  Heyer, 121 

Herne  v.  Nichols, 85 

Hedger  y.  Steavenson, 596 

Heyfyn  y.  Adamson, 3SS,  430 

Hennet  y.  Morris, 74 

Herring  y.  Sanger, 428 

Henry  y.  llaren, 141 

Hedger  y.  Stevenson, 470 

ll'iiverin  y.  Donnell, 425 

Herriok  y.  Whitney, 191,  289 

Uebden  r.  Hartsink, 199 

Hermanoe  y.  Vernoy, 188 

Helmsley  y.  Loader, 631 

Hetherington  v.  Kemp, 697 

Hedges  y.  Sealy, 268,  287 

Henry  y.  Bishop, 175 

Henry  y.  Jones,... 515 

Herrick  y.  Bennet, 154 

Herrick  y.  Malen, ...   168 

Herring  y.  Sanger, 156 

Hertel  y.  Bogart, 248 

Healy  y.  Gorman, 719 

Hendrickg  y.  Franklin,. 733 

Hewitt  y.  Goodrich, 570 

Heart  y.  Sybert, 327 

Heyden  y.  Thompson, 325 

Henshaw  y.  Robbing, 332 

Hicklingy.  Hardy, 204 

11  in-<lale  y.  Bank  of  Orange, 482 

lliggins  v .  Emmong, 216 

Hixon  y.  Hixon, 725 

Hitchcock  v.  Coker, 343 

Hitchcock  y.  Cloutier, 132 

Hilton  y.  Shepherd, 468 

1  licks  y.  Brown, 385 

Hine  y.  Allely, 496 

Hills  v.   Bannister, 83 

Hicks  y.  Beaufort, 653 

Hill  v.  Vanell, 611 

Uix  y.  Brown, 185 

Hicks  y.  Hinde, 283,  378 

Hilly.  Lewis, 266 

Hill  y.  Johnson, 671 

Hilton  y .  Dinsmore, 232 

Higgins  y.  Morrison, 445 

Hill  y.  Buckminster, 313 

Hill  y.  Bostick, 669 

Hill  y.  Norvell 521 

Hinev.  Alleley, 676 

Hinsdale  y.  Miles, 508 

Hinton  y.  Locke, 510 

1  Hill  y.  MoPhenon 578 

High  more  y.  Primrose, 171 

Hinsdale  y.  Bank  of  Orange, 307 

Holme  y.  Carsper, 686 

Hoar*  r.  Graham, 813 

Hopkirk  y.  Page, 649 

Holland  v.  Turner 639 

Howard  y.  Tiffany 669 

Hutighton  y.  Page,  180 

Hosford  y.  Nichols, 180 

Holmes  y.  U.  8.  Ins.  Co., Ill 

Honey.  Cost, 104 

Uolmesy.  Smyth, 321 


30 


TABLE    OF    CASES    CITED. 


Hollidayy.  Atkinson, 324 

Holmnn  v.  Johnson, 336 

Howson  v.  Hancock, 336 

Hough  v.  Gray, 229 

How  v.  Kemble, ^31 

Hornecastle  v.  Farren, 205 

Houghton  v.  Adams, 206,  291 

Holmes  y.  Vine, 345 

Hollrow  v.  Wilkins, 241 

Horner  v.  Ashford, 343 

Hooker  v.  Vande water, 344 

Hpwell  v.  Wilson, 262,  283 

Hoffman  &  Riger  v.  Coombs, 271 

Holmes  v.  Boughton, 49 

Holmes  v.  Nuncaster, 133 

Home  v.  Redfearn, 140 

Howard  v.  Central  B'k, 728 

Horner  v.  Hunt, 703 

Hopkins  v.  Megguire, 703,  707 

Hopkins  v.  Crittenden, 711 

Hopper  v.  Richmond, 712 

Hoare  v.  Graham, 425 

Hoare  v.  Allen, 73 

Hoare  v.  Cazenove, 438 

Holmes  v.  Williams 363 

Holmes  &  Drake  v.  DeCamp, 302 

Home  v.  Nichols, 330 

Hogan  v.  Cuyler, 517 

Holman  v.  Whitney, 637 

Holsworth  v.  Hunter, 162 

Hopping  v.  Quinn, 526 

Howard  v.  Chapman, 550 

Howard  v.  Ives, 457,  474 

Hough  v.  Gray, 222 

Holbrook  v.  Murray, 48 

Hogg  v.  Smith, 85 

Houghton  v.  E wbank, 88 

Hunt  v.  Wadleigh, 488 

Hunt  v.  Bell 341 

Hunt  v.  Maybee, 466 

Hubbard  v.  Troy, : 468 

Hubbard  v.  Guild, 121 

Hunt  v.  Knickerbacker, 336 

Hanter  v.  Ingraham, 420 

Hutchins  v.  Bowker, 62 

Hunt  v.  Massey, 67 

Huhne  v.  Tenant, 69 

Hussey  v.  Jacob, 351 

Hunt  v.  Adams, 313 

Hunt  v.  Fish 603 

Hubble  v.  Fogartie, 429 

Hughes  v.  Wheeler,.     169,  192,  302,  311 

Hunter  v.  Jeffery, 189 

Hunt  v.  Nevers, 200 

Hutchins  v .  Olcutt, 202 

Hunt  v.  Massey 676 

Hubley  v.  Brown, 569 

Hunt  v.  Smith, 244 

Hyde  v.  Goodnow, 181 

Hyslop  y.  Clarke, 336 

I. 

Ingram  v.  Crofts, 578 

Ireland  v.  Kip,    602 

I-igalls  v.  Lee, 289 

Imlay  v.  Ellefsen,  180 

Isgett  v.  Hoge, 221 

Ingraham  v.  Foster, 400 

In  re  Babcock, 431 

Ireland  v.  Kip, 456 


J. 

Jackson  v.  Richards, 1 5. 5 

Jackson  v.  Vanderheyden, 71 

Jackson  v.  Gumaer, 64 

Jameson  v.  Swinton, 474,  616 

Jackson  v.  Waldron, 

Jackson  v.  Alexander, 210 

!  Jacob  y.  Hungate, 688 

Jacks  v.  Nichols, 182,  718 

James  v.  Chalmers, 689 

January  v.  Goodman, 701 

Jackson  v.  Stackhouse, 572 

Jackson  v.  Richards, 453 

Jackson  v.  Henderson, 495 

Jackson  v.  Henry, 351 

Jackson  v.  Dominick, 351 

Jackson  v.  Tuttle,   351 

Jackson  v.  Packard, 354 

Jackson  v.    Duel', 346 

Jackson  v.  Warwick, 315 

Jarvis  v.  St.  Croix  Manuf.  Co., 607 

Jennings  v.  Roberts, 470,  601 

Jennings  v.  Shrive, 534 

Jewell  v.  Parr, 5fi5 

Je wett  v.  Colgate, 330 

Jenneys  v.  Parker, 328 

Jefferson  Co.  Bank  v.  Chapman,  261,   481 

Jenny  v.  Herle, 143 

Jenne  v.  Ward, 417 

Jerome  v.  Whitney, 421,   125,  169 

Jenkins  v.  Reynolds, 228 

Johnson  v.  Gilbert, 233 

Jones  v.  Ryde 207,  290 

Jocelyn  v.  Laseur, 143 

Jones  v.  Hake, 187 

Jones  y.  Savage,. 198 

Johnson  v.  Weed, 203 

Johnson  v.  Blasdale, 253 

Johnson  v.  Bridge, 259 

Johnson  y.  Bloodgood, 54 

Jones  v.  Hibbert, 323 

Jones  v.  Swan, 321 

Johnson  y.  Dickson, 338 

Johnson  T.  Titus, 331 

Jordan  y.  Jordan, 336 

Jones  v.  Rice, 340 

Jones  y .  Fort, 494 

Jones  v.  Caswell, 345 

Jones  v .  Lewis, 603 

Jones  y.  O'Brien, 652 

Johnson  v .  Mason, 681 

Jones  v.  Ryde, 546 

Johnson  v.  Bloodgood, 311,  321 

Jones  y.  Roe, 55 

Johnson  y.   Haight, 697 

Johnson  v .  Daverne, 1 04 

Jones  v.  Mallory, 710 

Johnson  v.  King  and  al.,  353 

Johnson  y.  Colling, 412 

Jordan  v.  Tackington, 431 

Jones  y.  Ravage, 445 

Jones  v.  Fales, 135,  297 

Judson  v.  Holmes, 277 

Julia  v.  Showbrooke, 212 

Juniatta  Bank  y.  Hale, 487 

Julia,   the, 73 

Judah  y.  Harris, 135 


TABLE   OF    CASES   CITED. 


31 


K. 

Kalfus  r.  Watts, 

Krt<9  >n  r.  Smith, 

Kelly  r.  Cowing, 

Kernodle  v.  Hunt, 

Kent  r.  Walton, 

Kennard  v.  Knot, 

Kenon  v.  McKea, 

Kenworthy  v.  Hopkins 

Ketchell  r.  Burnes,        

Ki-lly  v.  Mayor,  Ac.,  Brooklyn 

Kenison  T.  Cook, 

Kellogg  T.  Richards, 

Keeler  v.  Bartine, 

Kendall  T.  Galrin, 

Kemble,    Jowett  &    Co.   T.    Lull   & 

Draper,    

Kennedy  v.  Geddes, 

Kenner  T.  their  creditors, 

Ketchell  v.  Burnes, 

Keane  T.  Dafresne, 

Kersloke  v.  Morgan, •• 

Kennedy  v.  Strong, 

Keith  v.  Johns, 

Ketchum  v.  Barber, 3*5, 

Kennon  T.  Dickens, •  ••• 

Ke'inington  r.  Bedford, 

Kfllo-'jc  v.  Hickok, 

Kingston  r.  Long 

Kilgore  v.  Finlyon, 

Ketchum  and  Black  v.  Clark, 

Kirkpnrrick  r.  MoCullough, 

Kifiil'iill  v.  Huntington,   

Kirtland  v.  Wunzer, 

Kilgore  T.  Bulkley, 473, 

Kirtland  v.  Waczer, 465, 

Kirtland  r.  Holmes, 

King  T.  Thorn, 

Kingv    Paddock, 

Kingsley  v.  Vernon, 563, 

Kinney  v.  Flynn, 

Kies  T.  Tift 

Kilgorn  T.  Miles,   

King  T.  Caton, 

King  v.  Phillips, 

Kine  r.  Beaumont, 

Kingv.  Wilcomb, 

King  T.  Morrinon, 

Ki.gv.  Biokley, 

Kirksey  r.  Bates, 

King  v.  MiUon, 

Kin*T.  Baldwin, 

Kirhy  r.  Sisson. 

Kninht  r.  Hunt, 

Knight  r.  Pugh 

t  T.  Hunt 

Kn'.x  r.  Goodwin 

Knox  T.  Reeside 

Kramer  T.  Sandford, 

L. 


I  Lansing  T.  Gaine,  ..................  10t 

Landon  T.  Levy,  ..................   684 

HO    Lambert  T.  Pack,  .................  664 

317    Lambert  and  al.  T.  Ghiselin,  ........  019 

M7    Lafitte  v.  Slater,  ..................  645 

3-f  ft    Lary  v.  Young,  ..............  .....  933 

352    Laport  T.  Landry,  ...............  602 

571    Liiw.-nu  T.  the  Farmers'  Bank  of  S.,.  617 
675    Lawrence  v.   Trustees  of  Leake  and 


675 
220 
144 


Watts  Orphan  iloose,  .............   122 

Lanfear  v.   Blossman,  ..............  423 

Lawrenee  T.  Taylor,  ................     fft 


Lans:ngv.  Lansing, 

La  Farg«  v.  Herter, 

La  Grange  v.  Hamilton,' 

Lang  T.  Hale,.    

Landry  T.  Stnnsbury,  •  •• 
Lawrence  r.  Alston,.... 
Law  v.  Ford, 


575    Lacy  v.  llolb.ook,. 

572    Lamourienx  T.  Hewet, 219 

572    Lang  *  ton  T.  Corney, 2 

431  ,  Laing  v.  Parclay, 172 

Lawrence  v .  Langley, 264 

420    Lansing  v.  Lansing, 311 

409    Laing  v.  Meader,  577 

528    Lazarus  v.  Cowie 565 

668    Lancaster  v.  Walsh, 638 

I '.'3    Lambeth  v.  Rivarde, 538 

197    Lewis  v.  Papio, 704 

257    Leer.  Swift, 257,  677 

135  Legg  v.  Legg, 49 

454    LeTv.  Wilcox, 726 

358    Leverich  v.  Meyr, 522 

355    Legh  v.  Legh 55 

357    Leavitt  v.  Palmer, 76 

141     Leftly  v.  Mills, 585 

3    Lewis  T.  Jones, 671 

I    Leonard  v.  Leonard, o48 

136  Lenox  v.  Leverett, 601 

132    Lester  v.  Jenkins, 671 

584    Lewis  v.  Brewster, 221 

589  i  Lent  v.  Hodgaan, 211 

468    Leonard  v.  Vrendenbnrgh, 223 

5<>3    Ltqueer  v.  Prosser, 229 

248  ,  Leguire  v.   Prosser, 132 

334    Leiberv.  Goodrich, 134,  136 

655    Leonard  v.  Mason, 409 

702    Levy  v.  Bank  of  U.  S.,...- 433 

236    Leach  T.  Buchanan, 433 

155    Leach  v.Hewitt, 453 

705    Lewis  v.  Burr, 459 

»    lealbltterv.  Farrow, 83 

697  i  Leeds  v.  Lane»sbier, 145 

HO  jLe  Page  v   McCrea, 194 

12"     Levyv.Cadet 119 

600    Leffingwcll  v.  White, 155 

582    Leggett  v.  Cooper, 826 

309    Leavitt  v.  Putnam, 270 

f    Leyfield'sease 31 

2N':>    Lewis  v.  C'Mgrove, 826 

345    Le«v.  Davis, 719 

539    Leavitt  v.  Palmer, 258,  347 

815  I  Leavitt  T.  Simes 264 

861     Lech  man  v.  Junes, 486 

429    Leonard  v.   Gray, 487 

637    Livingston  v.  Radcliff, 195 

Lisby  T.  O'Brien', 2o3 

Lightbody  v.  Ontario  Co.  Bank,  206,  551 

Livingston  v.  Tremper,, 232 

;'     Livingston  v.  Rosevell 101 

;     Little  v.  Slaekford, 140 

r     Littlev.  Hurd 353 

>    Livirgston  v.   HiMtie, 102 

Lilley  v.  Miller, 449 

Llvennor*  r.  Ramd, 720 

1-0 


32 


TABLE   OF    CASES    CITED. 


Livingston  v.  Barn, 340 

Littler.  The  Phoenix  Bank,...  396,  398 

Lindo  v.  Unsworth, 530 

Livingston  v.  Rogers, 301 

Long  v.  Bailie, 302 

Long  v.  Heppele, 122 

Logan  v.  Mason, 554 

Lowry  v.  Murrell, 206 

Lowther  v.  Chappell, 119 

Lobdelv.  Hopkins, 154,  215 

Louisiana  State  Bank  v.  Rowell, 6U2 

Lowry  v.  Scott,  611 

Lockwoodv.  Crawford, 618 

Lloyd  v.  Howard, 286 

Lloyd  v.  Jawell, 328 

Lovell  v.  Evertson, 270 

Lovell  v.  Martin, 538 

L  >we  v.  Peers, 342 

Lowe  v.  Waller, 365 

Louisiana  State  Ins.   Co.   v.    Sham- 
burgh, 486,  503 

LoDsialev.  Brown, 463 

Lord  v.  Cheesebrough, 659 

Losee  v.  Dunkin, • 390 

Lovett  v.  Cornwall, 397,  401 

Loveland  v.  Shepard, 234 

Lunt  v.  Adams, 526 

Lumley  v.  Palmer, 462 

Lucas  v.  N.  Y.  Central  R.  R., 668 

Lundie  v.  Robertson, 652 

Luffe  v.  Pope, 380,  41 1 

Ludwick  v.  Huntzinger, 710 

Lyon  v.  Marshall, 125 

Lyon  v.  Lyman, 7<I6 

Lynch  v.  Reynolds, 294,  570 

M. 

Marshall  v.  Rutter, 68 

Mattocks  v.  Owen,     340 

Martin  v.  Chauntry, 138 

Matthews  v.  Houghton, 139 

Marvin  v.  Feeter, 3fiO 

Mai  lalien  v.  Hodgson, 345 

Marvine  v.  Hymers,  349,  360,  366 

Mandeville  v.  Welch, 379 

Mason  v.  Franklin, 382 

Marine  and  Fire  Insurance  Bank  of 

Georgia  v.  Jauncy,  380 

Martin  v.  Bailey  and  Burgess, 397 

May  v.  Coffin, 402 

Martin  v .  Bacon, 416 

Mason  v.  Barff, 418 

Massay  r.  the  Eagle  Bank, 407 

Marzetti  v.  Williams, 406 

Magadora  v.  Holt, 447 

Mass  v.  Livingston, 84,  249 

Mass  v.  the  Rossie  Lead  Mining  Co  ,.  88 

Mau  ran  v.  Lamb,  494 

Maine  Bank  v.  Smith, 508 

Malloy  v.  Delves, 411 

Mason  v.  Hunt, 407,  413,  486 

Mann  v.  Margh, 557 

Martin  v.  Morgan, 544 

Marvin  v.  Stone, 553 

Maynard  v.  Talcott, 671 

Marshall  v.  Mitchell 635 

Manchester  Bank  v.  Fellows, 623 

Marr  v.  Johnson, 610 

Mass  v.  Adams 557 


Manufacturers' Ac.  Bank  v.  Winship,.   107 

Madison  Co.  Bank  v.  Gould,  108 

Martin  v.  Miller, 151 

Mandeville  v.  Union  Bank, 166 

Mann  v.  Moors, 608 

Manhattan  Co.  v.  Reynolds, 575 

Macferson  v.  Thoy tes, » •  •  •   684 

March  v.  Ward, 682 

Marrin  and  al.  v.  Franklin  and  al., . .   727 

Manhattan  Co.  v.  Ledyard, 1 33 

Mack  v.  Spencer, '.....   133 

Marquand  v.  N.  Y.  Mar.  Co., 113 

Makepeace  v.  Harvard  College, 146 

Martin  v.  Walton, 116 

Maberv.  Massias, 211,  212 

iVIason  v.  Briggs, 216 

Martin  v.  Hill, 177 

Marvin  v.  McCullum,  186,  286 

Marsh  v.  Martindale, 356,  359 

Massen  v.  Bovet, 326 

Manely  v.  Magee, 79 

Man  v.  Lent, 329,  334 

Martin  v.  Bank  of  U.  S., 307 

Mathews  v.  Chisman, 244 

Marsh  v.  Gold, 1 02 

Mabbett  v.  White, 121 

Marsh  v.  Houlditch, 563 

Man  v.  Ex'rs  of  Man, 135 

McConnel  v.  Hector, 74 

MeCullen  v.  Coxe, 55 

McGregor  v.  Cleveland, 101 

McMurchy  v.  Robinson, 155 

Melver  v.  Humble, 98 

Mclntyre  v.  Oliver, 119 

McLead  v.  Snee, 144 

McConniek  v.  Trotter, 135 

McMurray  v.  Wood, 281 

McCoon  v.  Briggs, 285 

McCartney  v.  Graham, 304 

McDonald  v.  Bailey, 264,  272 

McKnight  v.  Lewis, 467 

McMurchy  v.  Robinson, 469 

MeGruderv.  B'kof  Washington,  486,  493 

McDonald  v.  Smith, 524 

McDonald  v.L  ee, 528 

Mclntyre  v.  Kennedy  and  al, 550 

McGee  v.  Prout, 573 

McDowell  v.  Canal  Co., 554 

MeFarland  v.  Lewis, 557 

MeLemore  v.  Powell, 568 

McDonald  v.  Hodge, 723 

McGregor  v.  Cleveland, 085 

McKinster  v.  Bank  of  Utica, . . .  403,  475 

MoMenomy  v.  Ferrers, 379 

McLean  v.  Waters, 610 

McEvers  v.  Mason, 407 

McCartie  v.  Stevens, 314 

M'Allisterv.  Reab, 3?4 

M 'Knight  v.  Wheeler, 350,  368 

M'Duffle  v.  Dame, 260 

M'Intosh  v.  Hayden,  502 

M'Allisterv.  Hoffman, 341 

Mercein  v.  Andrews, 102 

Meocher  v.  Fort, 129,  433 

Medbury  v.  Watrous 246 

Medina  v.  Stoughton, 331 

Mercer  v.  Clark 335 

Mellish  v.  Rawdon,  391,  393 

Mead  v.  Young, 250 


TABLE   OF    CASES    CITED. 


33 


Merchants'  Bank  v.  Splcer, 251 

Mecb.  and  Farmers'  B'k  T.  Schuyler,  150 

Merrittv.  Benton, 3*60 

Mendisabel  v.  Machardo, 420 

Meob.  Bank  of  N.  T.  r.  Griswold,...  448 

Merchants'  Bank  v.  Birch, 454 

Meadv.Engs,.         .   473 

Meoh.  Bank   at   Baltimore  T.  Mer- 
chants' Bank  at  Boston, 509,  522 

Mercer  T.  Cheese, 578 

Messenger  T.  Southey, 592 

Melleruh  v.  Ripper 472,  592 

Megher  T.  Mills, 67(5 

Meggot  r.  Mills, 556 

Mernmaok  Co.  Bank  v.  Brown, 556 

Melluh  v.  Simeon, 731 

Metcalffe  T.  Richardson, 652 

Merchants'  Bank  T.  Spioer, 57,    91 

Mechanics'  Bk  v.  Bank  of  Columbia,.    75 
Mechanics'  Bank  r.  N.  T.  A  N.  H. 

R.  Co., 61,    96 

Mitchell  r.  Culver, 92 

Mitchell  T.  Degrand, 506 

Mills  T.  Bank  of  the  U.S......  510,  519 

Milnes  v.  Duncan, 547 

Mills  v.  Argall, 109 

Mitohell  v.Oatram, Ill,  134 

Miller  v.  Reid, 135 

Minet  v.  Gibson, 126 

Milan  T.  De  Fitxjamea, 179 

Millerv.  Stewart, 219 

Mifflinr.  Smith, 107 

Miller  T.  Race, 308,  373 

Micklea  v.  Colvin, 322 

Miner  T.  Hoyt, 259 

Milne  v.  Priest, 407 

Miller  T.  Delamater, 247 

Mitchell  T.  Reynolds, 343 

Milford  v.  Meyor,  382 

Mitebel  and  al.  v.  Baring  and  al.,. . .  441 

Miller  v.  Uackley, 49,  698 

Miles  v.  Hall, 614 

Mills  T.  Barber 310,  686 

Millerv.  Gamble, 678 

Mitchell  v.  Dull, 554 

Michael  v.  Myers, 671 

Mills  v.  Fowkes, 555 

Millard  v.  Hewlett, 65 

Millerv.  Delamater, 71 

Minard  v.  Mead, 72,    85 

Mlllsv.  Duryee, 48 

Mitchell  v.  Kingman, 63 

Mottramv.  Mills 271,  291 

Moffatt  v.  Edwards, 155 

Morris  v.  Lea, 41,  124 

More  T.  Charles, 91 

Mowattv.  Howland, 118 

Mosely  T.  Hanford, 147 

Morris  v.  Edwards, 137 

Morrison  v.  Carrie, 188,  Ml 

Morley  v.  Boothby, 328,  240 

.M.ttv.  Hicks, 249,288 

Mohawk  Bank  v.  Corey, 320 

Moseley  v.  Hanford, 316 

Montroa*  v.  Clark, 890 

Morgan  v.  Richardson...... 334 

Moakley  T.  Riggs, 234 

Mowry  v.  Bishop, 357 

More  v.  Howland, 866 

Morton  v.  Nay  lor, 143,  380 

c 


Moore  v.  Cross  A  McGorvey , 386 

Moss  v.  Livingston 421 

Montgomery  Co.  Bank  v.  Albany  City 

Bank,.... 404,  506 

Montgomery  Co.  Bank  T.  Marsh,....  458 

Montague  v.  Perkins, 426 

Moore  v.  Wait, 488 

Moodie  v.  Morrall, 504 

Morgan  v.  Bank  of  the  State  of  N.  Y., 

637,  545 

Moyserv.  Whitall, 512 

Moody  v.Rowell, 706 

Montgomery  R.  R.  Co.  v.  Hurst, 682 

Montgomery  Co.  Bank  v.  Marsh,....  604 

Morris  v.  Husson, 609 

Mott  v  Brown, 565 

Mohawk  Bank  v.  Van  Home, 570 

Moorman  v.  Bank  of  Ala., 592 

Mott  v.  Petrie, 681 

Moses  v.  Fogarte, 68 

Mohawk  Bank  v.  Broderiok, 58,  155 

Mottv.Hicks, 77    81 

Mumford  v.  McKay 113 

Murray  v.  Mumford, 120 

Muse  v.  Donelson, 119 

Muck  v.  Smith, 231 

Murray  v.  Blatchford, 248 

Muldrowv.  Caldwell, 280 

Muir  v.  Sohenck, 297 

Munn  v.  the  Commission  Co,...  323,  352 

Murray  v.  Harding, •  •  356 

Mulliman  v.  D'Egenio, 384,  388 

Murray  v.  Judah, 57,  396 

Mulickv.  Radakisson, 387 

Mulford  v.  Walcott,  439,  443 

Murdock  v.  Mills, 422 

Musson  v.  Lake, 504 

Munroe  v.  Easton, 484 

Murray  v.  King, 636 

Munroe  v.  Douglass, 49 

Myers  v.  James, 166 

Myers  v.  Wells 294 

Myers  v.  Welles, 566,  569 

N. 

Nash  v.  Harrington, 613 

National  Bank  v.  Norton, Ill 

Napier  v.  Schneider, 733 

Nazro  v.  Fuller, 95,  502 

Nealv.  Irving, 88 

Nelson  v.  Bostwiok, 2i 

Newbury  v.  Armstrong, 228 

Newoomb  v.  Cramer, 214 

Newoomb  v.  Rayner, 291 

Nevinsv.  DeGrand, 438 

Nelson  v.  Fotterall, 688 

Nerot  v.  Burnand, 113 

New  Haven  Co.  B'k  T.  Mitchell,  ....  699 

Nelson  v.  Whittall, 702 

Newoomb  v.  Rayner, 569 

Nelson  T.  Dubois, 273 

Nevlson  v.  Wbitley, 356 

Nellisv.  Clark, 336,  346 

New-York  State  Bank  v.  Fletcher,  ..  201 

Nelson  v.  Cowing 188,  312 

Newball  v.  Clark, 421 

Nichols  v.  Parsons, 673 

Nicholson  v.  Revill, 673 

Nichols  v.  Tracy, T34 


34 


TABLE   OF    CASES    CITED. 


Nicholson  v.  Reville, 573 

Nichols  T.  Webb, 463 

Nilesv.  Porter, 283 

Nightingale  v.  Withington, 246 

Nichols  v.  Morris, 575 

Nixsen  v.  Ly ell, 653 

Nichols  v.  Goldsmith, ..* 496 

Nickerson  v .  Howard, 329 

Nichol  v.  Bate,    203 

Nixon  v.  English, 260 

Nichols  v.  Diamond,  70 

Nichols  v.  Green, 86 

North  River  Bank  v.  Aymar, ,  85 

North  Bankv.  Abbott, 499,  508 

North  Amer.  Coal  Co.  T.  Dyett, 569 

Norton  v.  Ellam, ... 612 

Norton  v.  Lewis, •  524 

Norton  v.  Pickering, 453,  644 

Norton  v.  Waite, • 321 

Noble  v.  Adams, 325 

Northan  v.  Latouche, 325 

Norris  T.  Badger, 276 

Noxon  v.  Lyell,., k 201 

Noell  v.  Murray, 195 

Norwich  Bank  v.  Hyde, 152,  168 

Noland  v.  Ringgold, 167 

Nobles  v.  Bates, . 344 

Noble  v.  his  creditors, 669 

Noyles  v.  Blakeman, 69 

N.  Y.  Firemens'  Ins.  Co.  V.  Sturges,  356 

N.  Y.  Firemens'  Ins.  Co.  v.  Ely,....  356 

0. 

Oakley  v.  Morton, 494 

O'Callaghan  v.  Sawyer, 259 

Ogden  v.  Saunders, 288,  379,  386 

Ogden  v.  Astor, 97 

Ogle  v.  Graham, 682 

O'Keefev.  Dunn...... 259,  447 

Okie  v.  Spencer, 203 

Olmsteadv.  Greenly, 224 

Oliver  v.  Houldlel, 246 

Oliver  v.  Bank  of  Tennessee 642 

Ontario  Bank  v.  Worthington,  409,  410 

413 

Olcottv.  Rathbone, 193,  506 

Ontario  Bankv.  Schermerhorn, 76 

Onondaga  County  Bank  v.  De  Puy, . .  106 
OuondagaCo.  Bankv.  Bates,..  466,  666 

Orr  v.  Magennis, 451,  642 

Ord  andal.  v.  Portal, 685 

Osborne  v.  Moncuro, 525 

Oulds  v.  Harrison, 259,  368 

Owen  v.  Waters, 671,  672 

Owen  T.  Van  Uster, 91 

Owen  v.  Gouch, 83 

Owenson  v.  Morse, 205 

Overton  v.  Tyler, 133 

Oxford  Bank  T.  Haynes, -  221 

P. 

Parish  v.  Stone, 171 

Passmore  v.  North, 151 

Parker  v.  Gordon, 147 

Parkin  v.  Carruthere, 116 

Patridge  v.  Strange, 55 

Patty  v.  Milne 564 

Parker  v.  Merrill, 118 


Palmer  v.  Stephens, 90 

Payne  v.  Ladue, 147 

Parker  v.  Gordon, 399 

Palmer  v.  Pratt, ..  141 

Patrick  T.  Cloy, 713 

Parker  v.  Riddle, 650 

Parker  v.  Totten, 658 

Patrick  v.  Beazley, 602 

Patridge  v.  Colby, 683 

Palmer  v.  Manning, 703 

Paton  T.  Lent, 697 

Patterson  v.  Patterson, 573 

Parsons  v.  Gloucester  Bank, 571 

Palmerton  v.  Huxford, 580 

Parr  v.  Jewell, 432 

Parker  v.  Leigh, 436 

Passmore  v.  North, 372 

Pawling  v.  Pawling,. 358 

Payne  v.  Eden, 346 

Payn  v.  Luze, 35o 

Payson  v.  Coolridge, 319 

Payne  v.  Ladue, « 313 

Patten  v.  Bank  of  So.  Car., 307 

Pain  v.  Packard, 293 

Palmer  v.  Richards,.... 286 

Palmer  v*  Stebbins, 343 

Patience  v.  Townley, 392,  492 

Packard  v.  Valentine, 264 

Parker  v.  Totten, 251 

Packard  v.  Richardson, 228 

Peters  v.  Brown, 185 

Pearson  v.  Garrett, 141 

Peacock  v.  Peacock 112 

Pearce  v.  Chamberlain,.. 113 

Perrina  v.  Gough, 162 

Pearsall  v.  Dwight, 49 

Pentum  v.  Pocock, 45 

•Pease  v.  Morgan, 134 

Peck  v.  Cochran, 416,  422 

Pentz  v.  Stanton, 80 

Perry  v.  Harrington, 420 

Petit  v.  Benson, 419 

Peetsv.  Bratt, 671 

Pearson  v.  Cranlan, 607 

Penn  v.  Flack, 666 

Perry  v.  Smith, 724 

Pecks  and  al.  v.  Mayo  and  al., 720 

Peacock  v.  Banks, 723 

Peters  v.  Anderson, 556 

Perce  v.  Davis, 553 

Perkins  v.  Franklin  Bank, 522 

People  v.  Spooner, 705 

Pentz  v.  Winterbottom, 703 

Perfect  v.  Musgrave, 572 

Pearce  v.  Rowe, 358 

Perkins  v.  Lyman, 344 

Perly  v.  Balch, 329 

People  ex  rel.  v.  Niagara  C.  P., 333 

Petr«yv.  Christy, 335 

Petriev.  Clark, 321 

Perly  v.  Balch, 326 

Pearson  v.  Pearson, 170,  324 

Peoplev.  Howell, 324 

Perkins  v.  Catlin, 267 

Peacock  v.  Rhodes, 270 

Perry  v.  Mays, 260 

Philips  v.   Cook, 122 

Phillips  v.  Astling, 399 

Phipson  v.  Kneller, 633 

Phinney  v.  Gleason, 732 


TABLE   OF   CASES    CITED. 


36 


PMJpot  v.  Jones, 55« 

Philpot  v.  IJryant,...  430,  488,  400,  667 

Pfaippa  v.  Milbury  Bank, 476 

Phettplaoe  y.  Stur*, 336 

Pieraon  v.  Hooker, 1)1 

Pierce  T.  Crafta, 170 

Pike  T.  Warren,  , 118 

PiUy.Smith, 64 

Piokard  T.  Valentine, 624 

Piercer.  1'endar, 610 

Pitman  y.  Kinter,  . 78 

Pinkh*m  v.  Macy, 470 

Pikey.  Ledwell, 364 

Pierion  y.  Hntchinson, 295,  302 

Piwee  y.  Fuller 343 

Piersonv.  Duniap, 419 

Pinkertonv.  Bailey, 311 

Heroe  T.  Short, 283 

Ptnckney  y.  Hall 266 

Pintard  y.  Ticking!**, ?9>  106 

Platt  v.  Smith, 147 

Platt  y.  Cottrell, 81 

Platt  r.  Drake, 696 

Planters' Bank  y.  White, 631 

Plimley  v.  Westley, 650 

PleU  v.  Johnson, 126,  130,  166 

Plumerv.  Smith, 340 

Planter*'  B«nk  v.  Sellman, (96 

Pott  r.  Kimberly, Ill 

Porter  T.  McClure, 97 

PowD«U  T.  Ferrari, 430 

Potig  r.  Reed, 278 

Potts  y.  Bell, 73  i 

Post  T.  Dart, 365 

Poulton  v.  Lattimore, 334 

Powell  v.  Waters, 316,  360 

Powell  T.  Smith, 294 

Pollard  T.  Sir  Kobt.  Henrca, 732 

Pollard  r.  Herrieg, 382 

Polhilly.  Walter, 173 

Porter  T.  Talcott 195 

Po«tma«t*r  General  y.  Farber, 668 

Poole  r.  Tumbridge, 627 

Porter  y.  Cummings, 680 

Powers  T.  Lynch, 264 

Posey  A  Coffee  v.  the  Decatur  Bank, .  608 

Poaton  y.  Stan  way 12:: 

Priee  T.  Inttrabe T:'4 

Pricey.  Mitchell, 147 

Price  T.  Young, 466,  487 

Price  T.  N*al 4.13 

Prattr.  Eads, 46,  628 

Pratt  r.  Foote, 201 

Pratt  y.  Adams 312 

Prattr.  Golick 147,  313 

PrentiM  T.  Sarage,    177 

Prentiss  y.  Sinclair 115 

Prentice  y.  Danielson, 242 

Preat wick  r.  Marshall, 72 

Pring  r.  Clarkion 670 

Purdy  y.  Phillips, 712 

Purdy  T.  Vermilya, 665 

Puller  T.  Roe, 99 

Pullum  T.  Withers, 682 

Putnam  T.  Sullivan, 85,    93 

Putnam  T.  Lewis, 197 

Pulsifer  v.  Hotchkiss 336 

Puckfordv.  Maxwell, 205 


Q- 

Qaackenbnah  v.  Leonard,  ...........  358 

Qniinby  v.  Boixell,  .................  70S 

T.  Burrell,  ............  .....  175 


R. 

T.  Pejton,  ..............  44,  416 

Randall  v.  Rich,  .   .................  370 

Rawlinaon  T.  Stone,  ................  247 

Rawdon  T.  Redfield,  ................  611 

Ramadale  v.  Uuton,  ................  207 

Rann  v.  Hughes,  ..................   325 

Rapelye  r.  Anderaon,  ...............  366 

Ransom  v.  Mack,  ..............  459,  473 

Randolph  T.  Pariah,  ...........  174,   733 

Raphael  T.  Bank  of  England,  .......  432 

Randall  v.  Van  Vechten,  ...........     82 

Rathbun  v.  Budlong,  ...............     81 

Rawlingron  v.  Stone,  ...............    80 

Rexr.  Hales,  ......................     94 

Rexr.  Henry,  .....................     94 

Rex  v.  Randall,  ....................  132 

Rexv.  Box,  .......................  251 

Reed  T.  Smith,  .....................  351 

Reed  v.  Batcbelder,  .................     66 

Reed  T.  Boardman,  .................  554 

Reed  T.  Warner,  ..............  321,  691 

Read  T.  Bank  of  Kentucky,  .........  681 

Read  v.  Cutta  ......................  243 

Read  T.  Wilkinson,  .................  213 

Read  v.  Xa*h,  .....................  224 

Ried  v.  Morrison,  ..................  486 

Reid  T.  Payne,  .....................  603 

Remington  r.  Harrington,  ...........  603 

Reea  v.  Marquis  of  lleadford,..  131,  310 
Rea  v.  Dorranoe,  ..................   524 

Reynolds  v.  Ward,  ................  572 

Reynolds  v.  Doyle,  ...............  .  664 

Reynolda  T.  Douglass,  ..............  241 

Reynolds  y.  Cleveland,  ............     90 

Rewy.Barbw,  ................  195,  203 

Renner  T.  Bank  of  Columbia,  .......  519 

Keetner  v.  Downer,  ............  456,  472 

Rhety.  Poe,  ..................  221.  244 

Rice  v.  Churchill,  ..................  216 

Rice  y.  Qoddard,  ..................  328 

Rioev.  Bull,  ......................  364 

Rice  y.  Peet,  ......................     63 

Rigga  y.  Lindsay  ...................  239 

Riggs  y.  McDonald,  ................  249 

Riggs  v    Lindsay,  ..................  737 

Richardson  y.  Lincoln,  .............  282 

Rice  y.  Stearns,  ................  81,  283 

Ridout  y.  Bristow,  .............  171,  316 

Richards  y.  Richards,  ...........   72,  125 

Richards  y.  Heather,  ...............   123 

Richards  y.  Franklin,  ..............  701 

Rlchter  y.  Selin  ....................  161 

Ridgeway  and  al.  T.  Day,  ...........  664 

Ridley  y.  Taylor,  .......   ..........  104 

Ridley  y.  Greenleaf,  ...............  514 

Roger*  y.  Morton,  .................  217 

Rogers  y.  Reed,  ...................  264 

Rogers  y.  Kneeland,  ................   177 

Rogers  y.  Stephens,  ...............  461 

Roberts  y.  Hardy,  .................     74 

Roberta  y.  Peake,  ..................  141 


36 


TABLE   OF   CASES    CITED. 


Roberts  v.  Mason, 499 

Robert  v.  Garnie, 554 

Roberts  v.  Bradshaw, 697 

Roberts  v.  Short, 725 

Roberts  v.  Kilpatrick, 262 

Robertson  y.  Smith, 574 

Robinson  T.  Reynolds, 131,  312 

Robinson  v.  Ames, 155,  384,  389 

Robinson  y.  Crandall, 247 

Robinson  v .  Bland, 722 

Robinson  y.  Reed, 204 

Robison  v.  Lyle, 573,  534 

Rose  y.  Dickson, 361 

Rookfeller  y.  Robinson, 666 

Root  v.  Goddard, 76 

Roof  y.  Stafford, 246 

Roach  v.  Ostler, 174 

Rowev.  Tipper, 459,  475 

Rowell  v.  Buck, 186 

Ro we  y.  Young, 383,  384,  426 

Robyv.  West, 340 

Rott  v.  Watson, 302,  578 

Ross  v.  Planters'  Bank, 591 

Rochester  v.  Taylor, 580 

Rowan  y.  Odenheimer, 591 

Rothschild  v.  Corney, 259 

Roseboom  y.  Mosher, 257 

Rossiter  y.  Rossiter, 86,  90,  252 

Rowley  v.  Ball, 295,  297 

Roach  v.  Ostler, 417 

Ross  y.  Sadgbeer, 343 

Rockwell  v.  Charles...... 341,  361 

Rockwell  y.  Charles, 370 

Rowley  v.  Stoddard, 436 

Roscoe  y.  Hardy, 448 

Russell  y.  Rogers, 345 

Russell  7.  Langstaffe, 93,  253 

Russell  y.  Ball  <fc  Cook, 372 

Russell  v.  Wiggin, ......  412,  414 

Russell  v.  Hester,. 242,  495 

Russell  y.  Hankey, 506 

Russell  v.  Lytle, 580 

Ruggles  y.  Ward, 574 

Ruggles  y.  Patten, 157,  481 

Rufiin  y.  Armstrong, 353 

Rumsey  v.  Leek, 312 

Rust  v.  Gott, 341 

Ruoker  y.  Killer, 450 

Ruff  v.  Webb, 140 

Ruokman  y.  Bryan, 369 

Rush  y.  Gott, 369 

S. 

Saunderson  y.  Judge, 147 

Sanaderson  v.  Piper, 168 

Sanderson  y.  Bowes, 157 

Sanderson  y .  Oakey, 497 

Saunders  y.  Bacon, 147,  281 

Saunders  v.  Wakefield, 228 

Sandford  y.  Miokles  and  al., 254 

Sandford  y.  Mickies, , 118 

Sandford  v.  Norton, 230 

Salter  v.  Burt, 155,  512 

Saltns  y.  Everett, 61 

Sayer  y.  Bennett, 113 

Sargent  v.  Southgate, 260 

Sainsbury  v.   Parkinson, 286 

Safford  y.  Wyckoff, 59,  75,  347 

Savings  Bank  of  N.  H.  v.  Bates, 525 


Sackett  y.  Andreas, 257 

Sally  v.  Hinde, ...    148 

Savage  v.  King, 72 

Satterwhite  v.  M'Kie, 713 

Sage  v.  Wilcox, 240 

Sanborn  y.  Little, 261 

Sarsfield  v.  Witherly, 50 

Saxton  v.  Johnson, 421,  210 

Schoonmaker  y.  Roosa, 1 70 ,  325 

Scott  r.  Colmesnel, 107 

Scott  v.  Bevan, 138,   728 

Scott  y.  Lifford, 436,  621 

Scovitlev.  Canfield, 179 

Scholey  v.  Ramsbottom, 545 

Scudder  y.  Andrews, 336 

Schultz  y.  Astley, 253 

Schofield  v.  Bayard, 392,  439 

Sohieldy.  Kilpin, 67ft 

Scruggs  v.  Gass, 206 

Schmidt  y.  Limehouse, 713 

Seeley  v.  Engell,. 148,  313,  673 

Seeley  v.  Bowney, 374 

Seymour  v.  Minturn, 437,  571 

Seymour  y.  Strong, 352 

Seymour  v.  Van  Slyok, 168,  650 

Seymour  y.  Sexton, 554 

Seneca  Co.  Bankv.  Neass,.  457,  496,  606 
Seneca  Co.  Bank  v.  Schermerhorn,  . .  362 

Selden  v.  Pringle, 303 

Selick  v.  Turnpike  Co., 557 

Seaver  y.  Phelps, 63 

Seabury  v.  Hungerford,  .......  272,  284 

Sears  y.  Brink, 227 

Seacord  y.  Miller, 446 

Seare  y.  Prentice, 522 

Sergeson  y.  Seeley, 64 

Serle  y.  Waterwath, 78 

Sentance  y.  Poole, 63 

Sexias  y.  Wood, 33d 

Sharp  y.  Bailey, 638 

Sharpy.  Ward,.. 524 

Shaw  y.  Markham, 697 

Shenk  y.  Mingle, 339 

Shaver  v.  Ehle, 176,  289,  703 

Shepard  v.  Hall, 524 

Shelton  v.  Braithwaite, 472,  592 

Shed  v.  Brett, 507 

Sheldon  v.  Benham, 602 

Shelton  v.  Bruce, 141 

Shiver  v.  Johnson, 176 

Shirley  v.  Fellows, 639 

Shove  v.  Wiley, 508,  696 

Shute  v.  Bobbins, 399 

Shultz  y.  Duprcy, 667 

Shumway  y .  Stillman, 48 

Sisson  v.  Barrett, ....  293,  375,  534,  573 

Sioe  v.  Cunningham, 156,  387,  390 

Sizer  v.  Heacock, 294,  566,  570 

Simmons  v.  Parmenter, 44 

Siggers  v.  Nichols, 426 

Sigourney  v.  Lloyd, 254,  278 

Sillv.Rood, 326 

Simson  v.  Ingham, 556,  561 

Skilding  v.  Warren, 312,  319 

Skinnerv.  Dayton, 112 

Slade  y.  Halsted, 148,  327 

Slocum  v.  Hooker, 66 

Slocum  v.  Pomery, 264 

Slasson  v.  Duff, 361 

Slingerland  v.  Morse, 219 


TABLE   OF   CASES    CITED. 


37 


297, 


Bmlth  T.  Kendall, 

Smith  T.  Bridges, 

(Smith  T.  Spinola, 

Smith  T.  Smith, 

Smith  T.  Jarrts, 

Smith  v.  Nightingale,.... 

Smith  T.  Tarlton, 

Smith  T.  Whiting, 

Smith  T.  Little, 

Smith  T.  Walton, 

Smith  T.  Martin, 

Smith  r.  Dunham, 

Smith  T.  Schanek, 

Smith  T.  Whiting, 

Smith  T.  Hawkins, 

Smith  T.  Beck  with, 

Smith  T.  Thatcher, 

Smith  T.  Little, 

Smith  T.  Argall, 

Smith  T.  Abbott, 

Smith  v.  Meroer, 

Smith  r.  Strong, 

Smith  T.  Ralston, 

Smith  T.  Smith, 

Smith  r.  Stranger, 

Smithv.  Loyd, 

Smith  T.  Rockwell, 

Smith  T.  Strong, 

Smith  r.  Brinkerhoff, 

Smith  T.  McClure, 

Smith  T.Sinclair, 

Smith  r.  Knox, 

Smithv.  Hiscock, 

Smith  T.  Fenand, 

Smith  T.  Ires, 

Smithv.  Gibaon, 

Smith  v.  Whiting 

Smith  T.  Dann, 238, 

Smith  T.  Hnbbs, 

Small  T.  Smith, 

Small  v.  Jones, 

Small  T.  Smith, 319, 

Smedes  T.  Bank  of  Utica, 

Smede*r.  Utica  Bank, 466, 

Smart  r.  Dean 

Small  wood  v.  Vcrnon 

Smedberg  v.  Simpson, 

Snyder  T.  Sponable, 

Snelting  T.  ^oyd, 

Baaed  T.  White, 

Snow  T.  Peacock, 

Solomons  T.  Turner 

Solomon*  T.  Bank  of  England, 

Southwick  v.  Sax, 

Solita  T.  Oarrow, 

8olartev.  Palmer, 

Soothwick  v.  Sax,  

Sonthall  v.  Rigg, 

Springfield  Bank  r.  Herrick, 

Sproat  r.  Matthews, 

Spear  T.  Pratt, 411, 

Spear  T.  Myers, 

Sparrow  T.  Chisman, 316, 

Spies  T.Oilmore, 152,159, 

Spies  T.  Newbery , 

Sparks  T.  Garrignes, 

Spencer  T.  Harvey, 

Kpri.gK  »••  Bank  of  Mt.  Pleasant, 

Spring  r.  Lovett, 

Ppaldiftg  r.  Vandercook, , 


...  167 
...  132 
...  179 
...  169 
...  133 
...  140 
...  110 
...  691 
...  684 
...  704 
...  688 
...  682 
...  673 
80,  134 
...  671 
...  669 
...  480 
...  497 
...  108 
...  420 
...  433 
...     59 
...  468 
...  385 
...     89 
566 
305 
347 
257 
303 
328 
316 
312 


Spenlock  T.  Union  Bank, 651 

Stone  T.  Hnbbard, 


248 
240 
336 
312 
345 
432 


Stone  T.  Metcalf, 
Stone  T.  De  Pugh,. 
Stone  T.  Ireland,  . . 
Steele  r.  Jennings, . 
Steele  T.  Oswego  Cotton  Manufactu- 
ring Company, 209 

Stewart  T.  Anderson, 261 

Stewart  v.  Small, 322 


706 
701 
668 
126 
119 


Stewart  T.  Lord  Kirkwall, 


M 


Stewart  T.  Mechanics'  and  Farmers' 

Bank, 361 

Steward  T.  Allison, 464 

Stedman  T.  Goneh, 197 

Stevens  v.  Strang, 129 

Stevens  T.  Blunt, 154 


Stevens  v.  Lynch, 


571 


Stevens  v.  Jackson, 67 

Strange  v.  Lee, 662 

Starback  v.  Murray, 48 

State  Bank  v.  Fearing, 192 

State  Bank  v.  Bowers, 744 

State  Bank  v.  Hard, 66 

Strong  v.  Holmes, 572 

Strong  v.  Tompkini, 341 

Strongv.  Foster, 535 

Strand  v.  Marshall, 63 

Staney  v.  Amer.  Life  Ins.  Co., 371 

Stackpole  v.  Arnold, 81,  313 

Steptoe  v.  Harvey,... .~ 364 

Stuckert  v.  Anderson, 604 

St.  John  v.  Pnrdy, 


580 

204  ,  Strange  v.  Price,",  i 470,  596 

233  |  Stalker  v.  McDonald, 67,  93,  310 

252  I  Stanton  v.  Allen, 344 


Stockton  v.  Colin, 596 


St.  John  v.  Redmond,  • 

Stainer  v.  Tysen, 

Stewart  v.  Lispenard,. 


89 
86 
62 

Stocken  v.  Collins, 616 

Stainback  v.  The  Bank  of  Va., 626 


403    Story  v.  Atkins, . 
475    ' 
616 
285 
352 
96 
255 
21  y 
318 
335 


169 

Stone  v.  Seymour, 654,  555 

Stone  v.  Peake, 336 

Stenben  Co.  Bank  v.  Mathewson,. . .  340 

Stockman  v.  Parr, 472,  592 

Strother  v.  Lucas, 705 

Stafford  T.  Yates, 474 

414 


Storer  v.  Logan 

Strohecker  v.  Cohen, 415 

Straker  v.  Graham,. 


390 
308    Stacy  v.  Baker,... 185,  210 


Stalker  v.  McDonald, 200 

Stadt  T.  Sill, 239 

Stafford  v.  Bacon, 327 

Sussex  Bank  r.  Baldwin, 494 

Suydamv.  Westfall,.  363,  374,  376,  293 
Suydam  v.  Bartle, 363 


Swingard  v.  Bowes, 


Swift  v.  Beers, 76,347,354 


m 

706 
Ml 

553 
327 
135 
212 
415 

n 

431 
230 
695 
IN 

637 

673 

•HI 5    Sweetter  v.  Lowell,. 

333  I  Swart  wont  r.  Payne, 


241 


Swift  v.  Tyson,. 
Swift  T.Stevens,. 


57,  321 

301,  303 

Swan  T.  Steele, 99,  103 

Sweeting  v.  Fowler  andal., 125 

Sweeting  v.  Halse, 435 

Sweet  v.  DoHfje 714 

Sweet  land  v.Creigh, 136 

364 


38 


TABLE   OF   CASES   CITED. 


Swasey  v.  Vanderheyden, 66 

Switzer  v.  Valentine, 70 

Sylvester  v.  Downer, • 265 

T. 

Taylorv.  Snyder, 152 

Taylor  T.  Otis  and  Brown,.  - 236 

Taylorv.  Ross, 228 

Taylor  v.  Bullen, 234 

Taylor  v.  Croker, 67,  250 

Taylor  v.  Snyder, 399 

Taylorv.  Fields, 123 

Taylor  v.  Moseley, 602 

Taylor  v.  Bank  of  Illinois, 468 

Tate  v.  Wellings, 356 

Tate  v.  Hilbert, 546 

Tate  v.  Welling, 364 

Tate  v.  Hulbert, 171 

Tappan  v.  Ely ,.  281,  503 

Tallmadge  v.  Wallis, 328 

Tallmage  v.  Pell, 76,  349 

Talbot  V.  Gray 221 

Talbot  v.  Bank  of  Rochester, 432 

Tallock  v.  Harris, 126 

Tanner  v.  Bean, 680 

Taft  v.  Brewster, 82 

Taber  v.  Cannon, 252 

Terry  v.  Parker, 491 

Terry  r.  Fargo, 88 

Ten  Eyck  v.  Vanderpool, 79,  327 

Tercesev.  Geray, 304 

Tebbits  r.  Dowd, 401,  455 

Terbushv.  Bispham, 63 

Thompson  v.  Sloan, 41,  136 

Thompson  v.  Morgan, 44 

Thompson  v.  Leach, 63 

Thompson  v.  Bank  of  the  State, ....  476 

Thompson  v.  Percival, 1 94 

Thompson  v.  Powles, 180 

Thompson  v.  Brown, 559 

Thompson  v.  Ketchum, 178 

Thompson  v.  Wilson, 248 

Thompson  v.  Clubley, 316 

Thomas  v.  Fenton, 646 

Thomas  v.  Heathorn, 198 

Thomas  v.  Woods, 234 

Thomas  v.  Roosa, 210 

Thomas  v.  Shoemaker, 525 

Thomas  v.  Bishop, 83 

Thomas  v.  Hewes, 90 

Thomas  v.  Dodd, 59 

Thomas  v.  Edwards, 339 

Thatcher  v.  Morris, 379,  669 

Thatcher  v.  Dinsmore, 79,  202 

Thalimer  v.  Brinkerhoff, 336,  698 

Thurber  v.  Blackborne, 49 

Thackray  v.  Blackett, 306 

Theedv.  Lovell, 272 

Thornton  v.  Wynne, 333 

Thayer  v.  Brockett, 579 

Tinson  v.  Francis, 371 

Tindall  v.  Brown, 156 

Titfordr.  Knott, 704 

Tidmarsh  v.  Grover, 438 

Titcombv.  Thomas, 166 

Timms  v.  Delisle, 662 

Tiernan  v.  Commercial  Bank 476 

Tomlinson  v.  Gill, 224 

Tombekbee  v.  Darnell, 401 


Tooseyv.  Williams,. .4 699 

Toulmin  v.  Price, 304 

Townsandv.  Derby, 169 

Townsend  v.  Riddle, 573 

Towle  v.  Stevenson, 88 

Townsley  v.  Sumrall, 184,  387,444 

Tobey  v.  Lenning, 473 

Truev.  Fuller, 219 

Truev.  Harding, 241 

Treadway  v.  Nicks  and  al., 488 

Tracy  v.  Tallmage, 75 

Trovinger  v.  M'Burney, 339 

Trotter  v.  Curtiss, 363 

Trasoott  v.  Davis, 353 

Triggsv.  Newman, 529 

Treacher  v.  Ilinton, 502 

Trascott  v.  King, 656 

Trimby  v.Vignier, 665 

Truman  v.  Hurst, 67 

Trimble  v.  Thorn*, 293 

Trapp  v.  Spearman, 147 

Tucker  v.  Welsh, 425 

Tucker  V.  Smith, 371 

Turk  v.  Richmond, 336 

Tuno  v.  Sague, 458 

Tudor  v.  Goodhue, 355 

Tuthill  v.  Davis, 352 

Turner  v.  Greenwood, 468 

Tunno  v.  Lague, 492 

Tuttle  r.  Love, 62 

Turner  v.  Haydin, 479 

Tuckerman  v.  Hartwell, 497,  501 

Tyler  v.  Binney, 220 

Tylee  v.  Yates, 336,  34? 

Tyler  v.  Yates, 76 

Ty«  v.  Owynne, 334 

u. 

Ulster  Co.  Bank  v.  McFarlan, . .  411,  422, 

238 

Union  Bank  v.  Coster, 239 

Union  Bank  v.  Willis, 500 

Union  Bank  v.  Hyde, 468,  584 

Union  Bank  of  Louisiana  V.  Ex'rs  of 

Coster, 240 

United  States  v.  Kirkpatrick, 558 

Upham  v.  Prince, 220 

Upham  v.  Lefavour, 558 

Utica  Ins.  Co.  v.  Tillman, 357 

Uticalns.  Co.  v.  Bloodgood, 360 

Utica  Ins.  Co.  v.  Caldwell, 362 

Uther  v.  Rich 318 

U.  S.  Bank  v.  Sill, 307 

U.S.Bankv.  Binney, 107 

U.  S.  Bank  v.  Chapin, 709 

U.  S.  Bank  v.  Bank  of  Georgia,.  190,  207 
U.  States  v.  White, 95,  131,  251 

V. 

Valkv.  Simmons, 402,  450 

Van  Winkle  v.  Ketchum, 67 

Van  Steenburgh  v.  Hoffman, 68 

Van  Eps  v.  Dillaye 114 

Van  Rensselaer  v.  Roberts, 554 

Van  Hoesen  v.  Van  Alstyne, ..  156,  484 

Van  Renscelaer  v.  Jewett, 357 

Van  Schaick  v.  Edwards, 365 

Van  Wart  v.  Woolley,....  403,  404,  445 


TABLE   OF   CASES    CITED. 


39 


Van  Vocbtcn  T.  Prnyn, 606 

Van  Ostrand  y.  Reed, V6 

Van  Allen  v.  Humphrey, lU 

Van  Hook  v.  W hillock, 386 

Van  Hoeaen  T.  Van  Alstyne, 390 

Van  Keuren  T.  Parmerlee, 118 

Vanderyeer  Y.  Wright,.... 171,  M8,  325 

VandewallT.  Tyrrell, 4«6 

Vandenburgh  v.  Hull, 07 

Vanderheyden  T.  Alallory, TO 

Vance  v.  Wells, «8 

VanceT.Ward 407 

Vanoe  r.  Bloomer, 216 

Varner  r.  Nobleborough, 2U2 

Vaughn  v.  Barrett, 248 

Vallettv.  Parker,....  105,  328,  337,  370 

Vere  y.  Ashley, 107 

Vere  T.  Lewis, 126 

Vernon  T.  the  Manhattan  Company,.  116 

Verree  T.  Hughes, 723 

Viwcher  y.  Yates, 369 

Vilas  v .  Jones, 355 

Viana  T.  Barclay, 88 

Vinal  y.  Burrill, 118 

Violetr.  Patten, 92,  262 

Vreeland  T.  Blunt, 144,  379 

W. 

Warren  v.  Mains, 69,  137 

Warden  v.  Tucker, 402 

Watcrvliet  Bank  T.  White,.  249,  275,  283 

Waitr.  Day, 339 

Watson  y.  Randall, 223 

Way-lull  v.  Lner, 194 

Warringtonv.  Early, 438 

Wardell  y.  Howell, 321 

Watkins  y .  Stevens, 06 

Watts  T.  Van  Ness, 346 

Waehburn  v.  Picott, 336 

Wardell  v.  Haight, 116,  255 

Wnnrington  v.  Furbor, 241 

Walker  y.  Bank  of  the  State  of  New- 
York 378,  383,  428 

Walrosley  v.  Child, 304 

Washington  Bank  T .  Prcsoott 555 

W  agger  and  al.  v.  Kenner, 615 

Watten  r.  Bank  of  Montgomery  Co., .  295 

Warner  T.  Beardsley , 293 

Walrathy.  Thompson, 238,  244 

Warren  v.  Lynch, 165,  208 

W at«oo's  ex "rsv.  McLaren, 220,  233 

Walker  T.  Maxwell, 49 

Wainwright  v.  Straw, 232 

Warwick  T.  Brace, 68 

Walden  v.  Sherburne, 118 

Walrodv.  Petrie, 125,  164 

Wallace  T.  M 'Council, 158 

Wain  v.  Walters 223 

Wardell  T.  Pinney, 133 

Wardell  v.  Hughes, 219,  681 

Walker  y.  State  Bank, .   629 

Waggener  v.  Colvln, 660 

WatU  y.  Kilburn, 702 

Washington  v.  Planters' Bank 710 

Walker  T.  Meek, 725 

Wain  v.  Bailey, 678 

Warren  v.  (Jilman, 600 

Wallace  r.  McConnell, 601 

Walsh  T.  Bailey, 668 


Ward  v.  Evans, 199,651 

Walpole  v.  Pultner, 436 

Warder  r .  Tucker, 452 

Walker  v.  Atwood, 419 

Wannell  T.  Adney, 238 

Warner  v.  Qourernenr's  ex'rs., 364 

Ward  T.Allen, 409 

Wallace  v.  Agry, 399,  414 

Warwick  v.  Rogers, 434 

Waring  v.  Mason, 330 

Weed  4  Co.  T.  Asa  Miller, 727 

Weedv. Clark, 233,  240 

Wells  T.  Brigham, 426 

Welli  T.  Baldwin, 313 

Webber  r.  Williams  College, 252 

Weinholt  v.  gpitten, 325,  335 

Wells  v.  Hopkins, 336 

Welland  Canal  Co.  T.  Hathaway,....  363 

Wendell  y.  Howell, 319 

Wellerv.  Keys, 102 

Wenman  T.  Mohawk  I»s.  Co., 712 

Wells  T.  Whitehead, 47,    49 

Westonv.  Barber, 213 

Wegerstoffe  T.  Keene, 419 

Wenman  v.  the  Mohawk  Ins.  Co.,...  512 

Welsh  v.  Barter, 329,  332 

Welsh  T.  Mandeyille, 55 

Wethey  v.  Andrews, 390 

West  Branch  Bank  T.  Morchcad, ....  557 

Webb  y.  Plummer, 177 

Wetumpka  and  Cooea  R.  T.  Bingbam,  174 

Wells  v.  Whitebead, 152 

Whiter.  Trumbull, 557 

White  r.  Skinner, 80 

White  y.  Howland, 234 

White  y .  Case, 234 

White  y .  Low, 258 

Whitey.  Joy, 670 

White  y.  Union  Ins.  Co 118 

Whitey.  Ambler, 397 

Whitey.  Howard, 563 

White  y.  Wright, 364 

White  T.  Springfield  Bank, 322 

White  v.Kebling, 372,  648 

Whitehead  v.  Tnokett, 87 

Whstehcady.  Walker, 259 

Whitney  y.  Lewis, 328 

Whitney  y.  Sterling, 98 

Whitney  y.  Abbott 487,  488 

Whitewright  y.  Stimpson, 109 

Whitcomb  y .  Whitney, 1 1 8 

Whipple  y.  Powers, 364 


Whittier  y.  Graffain,  . 


4.s6 


Whitwell  y.  Brigham, 375 

Whiteford  y.  Binkhymer, 693 

Wh  it  taker  y.  Brown, 100,  106 

Whitaker  y.  Cone, 336 

Wheelery.  Guild, 310,  318 

Wheeler  y.  Field, 486,  489 

Wheelery.  Wheeler, 80,  248 

Whitworth  y.  Hart, 710 

Whitwell  y .  Bennett, 666 

Whitwell  y.  Johnson, 306,  608 

Whcelock  y.  Freeman, 146 

Whitlack  y .  Underwood, 164 

Whitbeck  y.  Van  Nesi, 204 

Wilder  y.  Seelye, 197,  299,  504 

Wildery.  Keeler, 123 

Wilson  y.  Allen 257,  547 

WiUonv.  Little, 482 


40 


TABLE   OF    CASES    CITED. 


Wilson  v.  Clement, 407 

Wilson  v.  Kirkland, 705 

Wilson  v.  Troup,; 177 

Wilson  v.  Codman, 257 

Wilson  v.  Williams, 105 

Wilson  v.  Kilbnrn, 364 

Wilson  y.  Barthrop, 91 

Williams  v.  Germaine, 440 

Williams  v.  Sherman, 708 

Williams  v.  Bank  of  U.  S., 613 

Williams  v.  Mathews, 311,  258,  270 

Williams  v.  Hicks, 335 

Williams  T.  Waring, 501 

Williams  v.  Smith 369,  474 

Williams  v.  Thomas  and  al., Ill 

Williams  v.  Harrison, 67 

Williams  v.  Griffith, 562 

Williams  v.  Smith, 321 

Williamsv.  Wade, 262 

Williams  v.  Granger, 243 

Williams  T.  Walbridge, 106,   317 

Winsor  v.  Kendall, 346 

Willison  v.  Pateson, 338 

Wildes  v.  Savage, 414 

Witherby  v.  Mann 294 

Wilkie  v.  Roosevelt, 349 

Wilber  v.  Selden 191 

Wilkie  v.  Roosevelt, .187 

Wilmot  v.  Williams, 427 

Williamson  v.  Walts, 67 

Wilmouthv.  Patten,....   216 

Widgery  v.  Munroe, 485 

Wing  v.Terry, 374,  379 

Winter  v.  Livingston, 329 

Williamson  v.  Bennett, 143 

Wilborn  v.  Turner, 684 

Windham  Bank  v.  Norton  and  al., . . .  493 

Wheeler  v.  Curtiss, 656 

Winthrop  v.  Carleton, 713 

Willoek  v.  Riddle, 468 

Wilkerson  v.  Daniels, 712 

Wilkinson  v.  Lutridge, 433 

Wilkinson  v.  Johnson, 434,  542 

Wiggle  T.  Thompson, 525 

Wiggins  v.  Gans, 669 

Wiggin  v.  Bush, 77,  346,  372 

Wigan  v.  Fowler, 77 

Wilcox  v.  Howland, 709 

Willis  v.  Green, 256,401,455,  160 

Wing  v.  Terry, 43 

Wilkim  v.  Pearce, 101 


Wilkins  v.  Jadis, 381,  399 

Willets  v.  The  Phoenix  Bank, . .  308,  408 

Willmarth  v.  Crawford, 371,  668 

Wiffin  v.  Roberts, 323 

Windle  v.  Andrews, 462,  585 

Winter  v.  Drury, 406 

Wilberv.  Selden, 697 

Wildev.  Sheridan, 386 

Woodv.  Braddick, 119 

Wood  v.  Whiting 669 

Wood  and  al.v.  Corl, 721 

Wood  v.  Hitchcock, 577 

Woodv.  Wood, 134,  254 

Wood  v.  Pugh : 441 

Wood  v.  Jefferson  County  Bank,....  566 

Woods  v.  Williams,  437 

Woodbridge  v.  Spooner, 171,  315 

Woodbridge  v.  Brigham, 305 

Woodbury  v.  Sack  inder, 673 

Woodman  v,  Thurston, 635 

Woodhull  v.  Holmes, 317 

Woodford  v.  Darwin, 151,  188 

Woodson  v.  Moody 244 

Woodthorpe  v.  Lawes, 596 

Woodworth  v.  Bank  of  America,....     95 
Woodruff  v.  the  Merchants'  Bank  of 

New-York, 510,  521 

Wooster  v.  Jenkins, ....  322 

Woolcott  v.  Van  Santvoord,  . . .  427,  473 

Wolf  v.  Jewett, 399 

Worden  v.  Dodge, 143 

Wright  v.  Lainy, 559 

Wright  v.  Butler, 665 

Wright  v.  Shawcross, 459 

Wright  v.  Johnson, 244 

Wright  v.  Wright, 55 

Wrexham  v.  Huddleston, 113 

Wynne  v.  Raikes 407,  409 

Wynnv.Alden,    473,  598 

Y. 

Tates  v.  Boen, 64 

Yale  v.  Dederer, 70 

Yandes  v.  Lafaveur, . .  > 119 

Yeatman  v.  Cullen, 186 

Young  v.  Adams, 135 

Young  v.  Grote, 545 

Young  v.  Bryan, 584 

Youngs  v.  Lee, 322 

Young  v.  Hockley, 374 


BILLS  OF  EXCHANGE 


AND 


PROMISSORY  NOTES. 


CHAPTER    I. 
OF  NEGOTIABLE  PAPER— INTRODUCTION. 

THE  bill  of  exchange,  popularly  termed  a  draft,  is  written  in 
the  form  of  an  open  letter,  directing  the  person  to  whom  it  is 
addressed  to  pay  the  sum  of  money  therein  specified  to  a 
third  person  named  in  the  instrument,  on  account  of  the 
writer  or  person  by  whom  it  is  drawn,  i  It  derives  its  name 
from  the  French  billet  de  change,  and  has  been  defined  to  be  a 
written  order  or  request  by  one  person  to  another,  for  the 
payment  of  money,  absolutely  and  at  all  events.  2  No  par- 
ticular form  of  words  is  necessary  to  be  used  in  drawing  the 
bill ;  but  it  must  be  in  effect  an  order  addressed  by  one  person 
to  a  second,  desiring  him  to  pay  a  sum  of  money  to  a  third,  or 
to  any  other  to  whom  the  third  person  shall  order  it  to  be 
paid;  or  it  may  be  payable  to  bearer. 3  The  person  who 
writes  or  draws  the  bill  is  called  the  drawer,  and  he  to  whom 
it  is  written  the  drawee;  and  the  third  person  or  negotiator  to 
whom  it  is  payable,  (whether  specially  named  or  the  bearer 
generally,)  is  called  the  payee. 

The  instrument  was  originally  invented  among  the  mer- 
chants as  a  security  for  the  more  easy  remittance  of  money 
from  one  country  to  another.  If  A  lives  in  Jamaica,  and 

'  Morris  v.  Lea,  Ld.  Raym.,  1897;  Chitty  on  Bills,  180, 164.  The  bill  must 
be  in  substance  a  direction,  an  order  for  the  payment  of  money. 

•  Cook  T.  Satterlee,  6  Cowen  R.,  108;  6  Id.  186.  It  must  be  payable  in 
money,  Thompson  v.  Sloan,  28  Wend.  71. 

1  Kyd  on  Bills,  8,  3d  ed;  Chitty  on  Bills,  128. 

1 


42  OF    NEGOTIABLE   PAPER. 

owes  B,  who  lives  in  England,  one  thousand  pounds,  and  C  be 
going  from  England  to  Jamaica,  he  may  pay  B  this  one  thou- 
sand pounds,  and  take  a  bill  of  exchange  drawn  by  B  in 
England  upon  A  in  Jamaica,  and  receive  it  when  he  comes 
thither;  thus  B  receives  his  debt,  at  any  distance  of  place,  by 
transfering  it  to  C,  who  carries  over  his  money  in  paper  credit, 
without  danger  of  robbery  or  loss,  i  In  the  same  wayj  funds 
are  constantly  transmitted  from  country  to  country  throughout 
the  commercial  world. 

Bills  of  exchange  are  of  modern  origin;  they  are  said  to 
have  been  brought  into  general  use  by  the  Jews  and  Lombards, 
when  banished  from  country  to  country  for  their  usury  and 
other  vices,  in  order  to  carry  with  them  the  more  easily  their 
effects.  Others,  again,  assert  that  they  grew  into  use  on  the 
coasts  of  the  Mediterranean  in  the  early  part  of  the  fourteenth 
century;  and  all  authorities  concur  that  that  was  about  the 
period  when  they  began  to  be  generally  employed  as  a  conve- 
nient method  of  exchange.  But  they  were  occasionally  used 
at  an  earlier  day;  and  it  is  probable  that  the  Jew,  growing 
quick  witted  under  persecution,  first  brought  them  into  public 
notice  and  demonstrated  their  utility  in  a  conspicuous  manner. 

In  their  origin,  bills  of  exchange  were  used  as  a  mode  or 
means  of  transfering  property  from  one  place  or  country  to 
another;  as  now  employed  to  facilitate  the  great  operations  of 
commerce,  they  serve  the  further  purpose  of  increasing  the 
circulation,  and  enlarging  the  nominal  capital  in  trade.  The 
negotiability  of  the  instrument  gives  to  it  many  of  the  pecu- 
liarities of  money,  so  that  it  becomes  a  part  of  the  commercial 
currency  of  the  world.  It  passes  from  hand  to  hand  by  the 
simple  act  of  indorsement  and  delivery,  and  is  given  and 
received  as  a  representative  of  value.  Unlike  other  choses  in 
action,  it  is  presumed  to  have  been  given  for  a  good  considera- 
tion ;  2  and  is  transfered  by  the  holder  with  an  engagement 
to  pay  it  in  case  it  is  dishonored,  by  the  easy  device  of  writing 
his  name  across  the  back.  Very  often  it  passes  through  many 

1  2  Black.  Comm.,  467. 
*  Chit-ty  on  Bills,  69. 


NATURE    AND    ORIGIN. 


43 


hands,  each  of  whom  has  giiarranteed  its  payment,  thus  giving 
to  it  a  credit  equal  to  ready  money  in  the  market,  i 

The  theory  always  is  that  the  drawer  of  the  bill  of  exchange 
has  funds  in  the  hands  of  the  person  on  whom  he  draws,  equal 
to  the  amount  which  he  orders  paid;  and  consequently  the 
drawee,  as  soon  as  he  has  accepted  the  bill,  becomes  primarily 
liable  for  its  payment;  and  the  drawers  and  indorsers  are  from 
moment  liable  only  collaterally,  as  a  sort  of  sureties.  2 
So  long  as  the  fact  corresponds  with  the  theory,  and  none  but 
business  paper  is  put  in  circulation,  no  inconveniences  are 
lik»  ly  to  arise  from  the  use  of  this  kind  of  paper;  each  bill 
represents  a  debt  ol  equal  amount,  and  the  debt  has  been 
(•••ntrartnl,  we  will  suppose,  on  the  sale  of  property  worth  the 
face  of  the  bill.  To  this  extent  the  use  of  bills  is  perfectly 
legitimate.  3  But  bills  of  exchange  are  sometimes  drawn  upon 
a  i -arty  who  has  no  funds  in  his  hands  belonging  to  the  drawer, 
and  who  in  pursuance  of  a  previous  agreement,  accepts  the 
same  for  the  drawer's  accommodation.  In  this  way  bills  are 
put  in  circulation  solely  on  the  credit  of  the  parties  making 

1  Gibson  r.  Minet,  1  Hen.  Bla..  618.    From  testimony  furnished  by  Mr. 
Loyd,  of  the  firm  of  Jones,  Loyd  &,  Co.,  London,  it  appears  that  the  circula- 
tion of  Manchester,  England,  consists  of  nine  parts  of  hills  of  exchange,  and 
in  part,  gold  and  bank  of  England  notes.    Other  bankers  thought  the 
proportion  still  larger,  say  twenty  or  even  fifty  to  one.     Mr.  Loyd  stated  that 
he  bad  seen  bills  of  10/  with  o«e  hundred  and  twenty  indorsements  upon  them. 
:  an  estimate  made  by  Mr.  Leatham,  an  old  banker  near  London,  by  the 
aid  of  official  returns,  the  amount  of  bills  in  circulation  (as  indicated  by  the 
•tamps  used,)  was  as  follows: 

'i.  UritAJn.  Irish.  Foreign  Ac.  Total. 

1815, £177,493,000         £79,582,000         £92,845,000         £649. 920,000 

1824, 2:?2,  429,  000  -,miO  45,195,000  316,362,1(^0 

260,379,000  43,396,000  60,«3i',WiO  304.4 

182«, 207,347,000  34,557.000  4»',3I8,000  Ji'2,000 

1835, 2V4,775,  000  61,109,000  59,519,0.0  4"5.: 

1836, 355,289,000  59,155,000  71,409,000  485,943,000 

1837, 333,268,000  54,180,000  67,636,000  455,OM,OUO 

1828, 841,947,000  54,360,000  69,197,000  465,504,000 

1839, 394,203,000  45,615,000  78,675,000  528,493,000 

It  appeared  that  the  average  time  of  circulation  was  three  months.  Accord- 
ing to  official  statement*,  it  seems  that  the  actual  bank  note  circulation  in 
Great  Britain  and  Ireland,  wss  less  than  forty  millions  of  pounds  sterling,  or  less 
than  one  third  of  the  circulation  of  bills  of  exchange  eighteen  years  ago.  Vol. 
29,  Merchant's  Magazine,  789. 

1  Suydam  v.  Wentfall.  4  Hill  R.,  211;  Wing  v.  Terry,  6  Hill,  160. 

*  Smith's  Wealth  of  Nations,  126. 


44  OF    NEGOTIABLE   PAPER. 

or  endorsing  them;  they  are  not  based  upon  a  specific  fund  or 
debt  due,  but  upon  the  general  credit  of  the  acceptors  and 
endorsers,  so  that  they  no  longer  represent  ready  money,  or 
capital  invested  in  business,  i 

When  given  in  the  ordinary  course  of  business,  a  bill  of 
exchange  imports  that  a  debt  is  due  from  the  drawee  to  the 
drawer,  which  is  assigned  to  the  payee  of  the  bill;  and  if  the 
drawee  accepts,  it  is  an  acknowledgment  on  his  part  that  he 
has  funds  of  the  drawer  in  his  hands  to  the  amount  of  the 
bill.  The  presumption  of  funds  in  the  hands  of  the  acceptor 
is  conclusive  as  between  him  and  every  bona  Jide  holder  of  the 
paper;  and  it  is  so  strong  in  favor  of  the  drawer,  that  when 
the  bill  is  payable,  as  it  is  sometimes  made,  to  his  own  order, 
he  may,  like  any  other  holder,  maintain  an  action  on  the  bill, 
against  the  acceptor.  As  drawer,  his  undertaking  is  that  the 
bill  shall  be  accepted  and  paid  by  the  drawee;  and  hence, 
after  acceptance,  his  undertaking  becomes  collateral  to  that 
of  the  acceptor,  who  is  then  regarded  as  the  principal  debtor; 
and  if  the  latter  fail  to  pay  the  bill  when  it  becomes  due,  the 
holder,  having  it  duly  protested,  may  call  upon  the  maker 
and  indorser  for  payment.  2  As  between  the  drawer  and 
indorsers  of  the  bill,  they  are  liable  to  the  holder  in  the  order 
in  which  they  have  become  parties  to  the  instrument.  But 
the  holder  may,  if  he  choose,  demand  and  collect  the  bill  of  the 
last  indorser,  or  the  person  from  whom  he  received  the  bill 
by  endorsement;  and  he  in  turn  may  collect  of  the  next 
indorsers,  and  he  from  the  next,  and  so  on  till  the  first  indorser 
has  been  paid  by  the  drawer;  or  the  holder  may  maintain  his 
action  against  all  the  parties  to  the  bill,  who  became  such  pre- 
viously to  himself.  3 

No  doubt  bills  are  now  very  commonly  drawn  and  accepted 
by  way  of  accommodation,  so  that  the  original  theory,  which 
supposes  funds  in  the  hands  of  the  drawee,  is  not  true  in  res- 

1  Griffith  v.  Reed,  21  Wend.  R.,  502. 

*  Cruger  v.  Armstrong.  3  John.  Caa.,  .5;  Simmons  v.  Parminter,  1  Wils., 
185;  Vere  v.  Lewis,  3  T.  R.,  182;  Thompson  v.  Morgan,  3  Campb.,  101;  Ray- 
borg  v.  Peyton,  2  Wheat.,  385. 

s  Chitty  on  Bills,  536 ;  4  T.  R.,471;  Britten  v.  Webb,  2  Barn,  and  Ores.,  483. 


NATUKE   AND  ORIGIN.  45 

pect  to  them,  i  Both  banks  and  individuals  frequently  make 
arrangements  with  other  persons  and  moneyed  institutions  for 
the  privilege  of  drawing  on  them  to  a  certain -amount  and  in 
a  certain  manner,  with  an  agreement  to  put  them  in  funds  or 
balance  the  account  with  them  at  stated  periods.  In  this  way 
it  sometimes  happens  that  the  currency  is  largely  inflated  by 
the  use  of  bills  of  exchange,  which  circulate  very  much  like 
money,  and  occasionally  draw  after  them  pernicious  conse- 
quences. The  practice  of  drawing  and  redrawing  in  order  to 
meet  the  draft,  creates  an  unreal  credit,  and  is  an  abuse  of  the 
bill  of  exchange :  it  creates  an  increase  of  present  capital,  at 
the  expense  of  paying  compound  interest  for  that  which  is  so 
acquired.  In  fact  the  pernicious  effects  of  a  fabricated  credit, 
by  the  undue  use  of  accommodation  bills  of  exchange,  drawn 
out  of  the  ordinary  course  of  trade,  have  led  many  to  ruin  : 
and  the  use  of  them,  where  there  is  no  real  demand  subsisting 
between  the  parties,  nor  an  actual  fund  to  resort  to  in  case  of 
need,  is  injurious  to  the  public,  as  well  as  to  the  parties  con- 
cerned in  the  negotiation.  2 

Used  legitimately,  bills  of  exchange  obviate  to  a  great  de- 
gree the  necessity  of  transmitting  specie  from  one  country  to 
another  for  the  payment  of  debts.  Dealers  in  the  produce  of 
the  soil,  export  large  quantities  of  corn  from  the  city  of  New 
York,  to  Liverpool  and  London;  and  dealers  in  cotton  ship 
large  amounts  of  that  staple  from  New  Orleans  for  the  same 
destination;  thus  accumulating  demands  against  the  purchas- 
ers in  those  foreign  cities.  On  the  other  hand,  our  merchants 
import  various  kinds  of  goods,  wares  and  merchandizes  from 
_land,  thereby  contracting  debts  to  be  discharged  where 
they  are  made.  Now,  by  the  use  of  bills  of  exchange,  these 
debts  on  both  sides  of  the  ocean  are  set  off  one  against  the 
other,  so  that  comparatively  but  a  small  amount  of  specie  is 
required  to  be  transmitted  from  one  nation  to  the  other,  in 
order  to  balance  the  account.  Indeed,  considering  the  great 
commerce  carried  on  between  these  two  countries,  it  is  remark- 

1  21  Wend.  R.,  607;  Pentum  v.  Pocock,  5  Taunt.,  192. 
1  Ex  parte  Wilson,  11  Vet.,  411  j  21  Wend..  608. 


46  OF    NEGOTIABLE    PAPER. 

able  how  small  is  the  quantity  of  gold  and  silver  employed 
in  effecting  the  exchanges.  As  with  an  individual,  the  nation 
that  buys  more  than  it  sells,  accumulates  a  debt  against  itself; 
and  this  debt  or  this  net  balance  of  trade  is  the  amount  of 
specie  requisite  to  close  the  financial  year. 

The  law-merchant  is  a  part  of  the  public  law :  it  does  not 
rest  essentially  for  its  character  and  authority  on  the  positive 
institutions  and  local  customs  of  any  particular  country,  but 
consists  of  certain  principles  of  equity  and  usages  of  trade, 
which  general  convenience  and  the  common  sense  of  justice 
have  established,  to  regulate  the  dealings  of  merchants  and 
mariners  in  all  the  commercial  countries  of  the  civilized 
world,  i  It  is  also  a  part  of  the  common  law,  growing  up  as 
it  did  out  of  the  necessities  of  business;  2  being  founded  on 
what  is  termed,  and  was  in  fact  the  custom  of  merchants. 
We  examine  and  study  the  system  as  it  now  stands  developed 
by  time  and  experience,  and  recorded  in  the  reports  of  ad- 
judged cases;  but  the  system  itself  arose  out  of  the  general 
usages  of  trade,  and  has  gradually  expanded  to  meet  the  wants 
of  men  engaged  in  commerce.  3  In  this,  as  in  other  cases, 
the  courts  have  felt  themselves  authorized  and  required  to 
consult  the  interests  of  the  community  in  favor  of  commerce; 
and  have  in  this  manner  methodized  and  affirmed  the  principles 
of  equity  and  good  faith,  so  imperatively  demanded  in  all 
commercial  transactions.  4 

Hence,  we  sometimes  find  the  lex  mercatoria  ranked  under 
the  head  of  the  particular  customs  of  England  that  go  to 
make  up  the  great  body  of  the  common  law;  5  and  sometimes 
treated  of  as  the  general  body  of  European  usages  in  matters 
relative  to  commerce — usages  and  rules  not  peculiar  to  any 
one  nation,  but  common  in  most  respects  to  all.  6  Each  mode 
of  treating  the  subject  is  perfectly  accurate;  but  neither  is  by 

1  3  Kent  Comm.,  2;  Luke  v.  Lyde,  2  Burr.,  822. 
8  Pratt  v.  Eads,  1  Blackf.,  81. 

3  Master  v.  Miller,  4  T.  R.,  342;  1  Bl.  Comm.,  75. 

4  Chitty  on  Bills,  8. 

*  1  Black.  Com.,  75. 

•  Steph.  Com.  54;  3  Kent  Com.,  2. 


NATURE   AND   ORIGIN.  47 

itself  full  and  satisfactory.  The  intercourse  of  nations  can 
only  be  regulated  by  such  principles  as  are  recognized  and 
enforced  equally  and  uniformly  in  all;  and  for  this  reason  we 
find  the  laws  of  commerce  gradually  working  themselves  into 
the  public  or  international  code.  At  the  same  time  each  State 
has  its  own  peculiar  policy  and  mode  of  administering  justice, 
and  does  not  hesitate  to  modify  the  details  of  the  system  in 
conformity  with  its  own  views  of  general  convenience  and 
commercial  utility,  i 

Bills  of  exchange  are  either  foreign  or  inland-,  foreign, 
when  drawn  by  a  person  in  one  State  or  country  upon  a  person 
in  another  state  or  country;  as  for  example,  when  drawn  by 
a  person  in  America  upon  a  person  resident  in  England,  and 
payable  by  the  latter,  or  vice  versa;  and  inland,  when  both 
the  drawer  and  the  drawee  reside  in  the  same  state  or  country, 
or  when  both  drawn  and  payable  in  the  same  state  or  country, 
though  accepted  abroad.  2  This  definition  assumes  that  bills 
drawn  in  one  of  the  several  states  of  the  Union  upon  persons 
i « -ident  in  another,  are  to  be  regarded  as  foreign  bills,  on  the 
ground  that  they  answer  all  the  purposes  of  remittances,  and 
commercial  facilities,  equally  with  bills  drawn  upon  other 
countries;  and  the  authorities  are  to  the  same  effect.  3 

For  all  national  purposes  embraced  by  the  federal  constitu- 
tion,  the  States  and  the  citizens  thereof  are  one,  united  under 
the  same  sovereign  authority  and  governed  by  the  same 
laws.  In  all  other  respects  the  states  are  necessarily  foreign 
to,  and  independent  of  each  other.  Their  constitutions  and 
forms  of  government  are  alike  in  one  particular;  they  are  of 
a  republican  character;  but  notwithstanding  this  feature  or 
principle  prevails  in  all  of  them  alike,  each  state  is,  in  its 
relation  to  the  others,  a  separate  sovereignty ;  having  its  own 
executive  and  legislative  government,  and  its  own  laws  and 
municipal  regulations.  4  It  may  serve  to  illustrate  this  posi- 

1  9th  and  10th  Will.  3,  c.  17;  8d  and  4th  Anne,  c.  9;  2  R.  S.  of  New-York, 
3d  ed.  p.  62-55. 

1  2  Black.  Com.  467;  Chitty  on  Bills,  10.  The  text  is  from  Blackstone,  as 
modified  by  subsequent  decisions. 

»  Buckner  T.  Finley,  2  Peters  U.  S.  R.,  686. 

4  2  Peters  R.,  688;  Wells  v.  Whitehead,  16  Wend.  R.,  627. 


48  OF    NEGOTIABLE    PAPER. 

tion  to  refer  to  the  credit  accorded  to  judgments  and  judicial 
proceedings  between  the  several  states.  In  one  case,  Mr. 
Justice  Marcy,  delivering  the  opinion  of  the  court,  says: 
The  states  being  independent  sovereignties,  judgments  re- 
covered in  the  courts  of  one  state  would  be  foreign  judgments 
in  every  other,  but  for  that  clause  in  the  constitution  of  the 
United  States  which  declares  that  full  faith  and  credit  shall  be 
given  in  each  state  to  the  acts,  records  and  judicial  proceedings 
of  every  other  state  ;  i  and  goes  on  to  quote  with  approbation 
the  language  of  Chief  Justice  Parsons,  to  this  effect :  Judg- 
ments rendered  in  any  other  of  the  United  States,  are  not, 
when  produced  here  as  the  foundation  of  actions,  to  be  con- 
sidered as  foreign  judgments,  the  merits  of  which  are  to  be 
inquired  into,  as  well  as  the  jurisdiction  of  the  courts  render- 
ing them;  neither  are  they  to  be  considered  as  domestic  judg- 
ments, rendered  in  our  own  courts  of  record,  because  the  juris- 
diction of  the  courts  rendering  them  is  a  subject  of  inquiry. 
But  such  judgments,  as  far  as  the  court  rendering  them  had 
jurisdiction,  are  to  have  in  our  courts  full  faith  and  credit. 
They  may,  therefore,  be  declared  on  as  evidences  of  debts  or 
promises;  and  on  the  general  issue  the  jurisdiction  of  the 
courts  rendering  them  is  put  in  issue,  but  not  the  merits  of 
the  judgments.  2 

But  for  the  clause  in  the  constitution  of  the  United  States, 
quoted  above,  the  judicial  records  and  judgments  of  each  State 
would  be  treated  in  the  others  as  foreign  judgments  :  for  it  is 
worthy  of  remark,  in  this  connexion,  that  notwithstanding  the 
provision  referred  to,  it  appears  from  some  of  the  earlier  cases, 
that  a  judgment  rendered  by  a  court  of  one  State,  was  not 
considered  conclusive  between  the  parties  in  the  other  states, 
in  the  same  manner  and  to  the  same  extent  as  judgments  ren- 
dered in  their  own  courts.  It  was  declared  prima  facie  evi- 
dence of  debt,  subject  to  be  inquired  into  and  disproved  in  an 
action  upon  it  in  another  state.  3  By  degrees,  however,  those 

1  Starbuck  v.  Murray,  5  Wend.  R.,  148;  Holbrookv.  Murray,  id.  161.  See 
art.  4  §1,  Constitution  of  U.  S. 

a  Bissell  v.  Briggs,  9  Mass.  R.,  462;  Mills  v.  Duryee,  7  Cranch,  418;  Hall  v. 
Williams,  6  Pick.,  232;  Shumway  v.  Stillman,  4CowenR.,272;  2  Kernan,  156. 

'  1  Caines'  R.,  460;  1  Mass.  R.  401. 


NATURE   AND    ORIGIN. 


49 


decisions  have  been  so  far  modified  that  the  only  question  now 
permitted  to  be  raised  upon  a  judgment  recovered  in  another 
state,  relates  to  the  jurisdiction  of  the  court  rendering  it.  i 
In  other  respects  they  are  to  be  treated  as  domestic  judg- 
ments, and  are  to  be  received  with  full  faith  and  credit.  So 
much  as  this,  demanded  by  the  express  terms  of  the  federal 
compact,  is  conceded  to  the  authority  of  that  instrument. 

The  same  analogy  is  found  in  another  class  of  cases.  Obey- 
ing the  well  established  principle  that  courts  do  not  ex  offlcio 
take  notice  of  foreign  laws,  it  is  adjudged  that  the  courts  of 
this  state  will  not  take  judicial  cognizance  of  the  statute  laws 
of  sister  states,  at  variance  with  the  common  law.  2  In  other 
words,  each  state  in  this  instance  treats  the  courts  of  neigh- 
boring states  as  those  of  a  foreign  jurisdiction.  But  it  seems 
that  upon  common  law  questions,  the  legal  presumption  is 
that  the  common  law  of  a  sister  state  is  similar  to  our  own;  3 
while  the  statutes  must  be  pleaded  and  proved  like  those  of 
foreign  states. 

There  are,  especially  in  the  earlier  decisions  of  our  courts, 
dicta  to  the  effect  that  bills  drawn  in  one  state  upon  persons 
residing  in  another,  are  to  be  treated  as  inland  bills.  4  But 
the  later  decisions  hold  a  contrary  doctrine,  based  upon  the 
fact  that  each  state  has  a  separate  and  distinct  municipal 
jurisprudence,  framed  by  its  own  legislature,  and  within  its 
proper  sphere  of  action  subject  to  no  control.  5  The  limited 
sovereignty  delegated  to  the  national  government,  does  not 
make  the  states,  as  such,  at  all  dependent  one  upon  the  other. 
Analogous  to  this,  it  is  adjudged  that  a  bill  drawn  in  Ireland 
upon  England,  is  to  be  considered  a  foreign  and  not  an  inland 
bill ;  but  it  has  been  held  under  the  English  revenue  laws, 

1  Borden  v.  Fitch,  15  John.  R.  121  ;  Andrews  v.  Montgomery,  19  id.  162;  4 
Cowen  R.,  272;  Thurber  v.  Blackborne,  N.  Hamp.  246;  Bent  on  v.  Bingot,  10 
Serg.  and  Rawle,  240;  Aldrich  v.  Henway,  4  Conn.  R.,  280;  2  Kern.  156;  22 
Barb.  R.,  118;  1  Seld.  448. 

•  Holmes  v.  Broughton,  10  Wend.  R.  75;  1  Mass.  R.,  103;  2  East  R.  161. 

1  Walker  v.   Maxwell,  1  Mass.  R.,  103;  Pearsall  v.  Dwight,  2  id.  34;  Legg 
v.  Legg,  8  id.  99;  10  Wend.  R.  75;  Monroe  v.  Douglass,  1  Selden,  448. 
4  Miller  v.  Hackley,  5  John.  R.,  876. 

•  2  Peters   R.  686;    Wells  v.   Whitehead.   15  Wend.  R.  627;  Halliday  y. 
McDougall,  20  Wend.  R.  81;  22  id.  264;  Story  on  Bills,  §  22,  23. 


50  OF    NEGOTIABLE   PAPER. 

that  a  bill  drawn  in  London,  payable  to  the  order  of  the 
drawer  in  the  same  city,  upon  a  merchant  residing  at  Brus- 
sels, and  accepted  by  him,  is  an  inland  bill,  and  must  be 
stamped  as  such,  i 

At  common  law,  if  the  drawee  of  a  foreign  bill  of  ex- 
change refuse  to  accept,  the  bill  must  be  protested  by  the 
holder,  or  by  some  other  person,  if  he  be  ill  or  absent,  and 
notice  thereof  given  to  the  drawer.  The  protest  is  made  by 
a  notary  public,  and  notice  of  the  non-acceptance  or  non- 
payment should  be  immediately  sent  to  all  the  parties  on  whom 
the  holder  means  to  call  for  payment.  2  The  inland  bill 
stands  upon  a  different  footing :  where  there  is  no  statute  re- 
quiring it,  it  need  not  be  protested  for  non-payment  or  non- 
acceptance;  but  a  notice  of  the  dishonor  should  be  given  to 
the  drawer  and  endorsers.  3 

For  the  convenience  of  trade  and  commerce,  the  certificate 
of  the  notary,  who  has  protested  a  foreign  bill,  given  under 
his  seal  of  office,  is  made  evidence  of  the  protest  in  a  foreign 
state,  without  any  auxiliary  support,  and  is  so  received  in  all 
courts,  according  to  the  usage  and  custom  of  merchants. 

It  should  be  borne  in  mind  that  the  use  of  inland  bills  did 
not  become  frequent  until  some  time  after  the  law  in  respect 
to  foreign  bills  had  become  well  established.  They  were  at 
first,  like  foreign  bills,  quite  restricted  in  their  operation;  and 
it  was  deemed  essential  to  their  validity  that  they  should  be 
drawn  between  merchants,  and  that  a  special  custom  for  the 
drawing  and  accepting  them  should  exist  between  the  towns 
in  which  the  drawer  and  acceptor  lived;  or  if  they  lived  in 
the  same  town,  that  such  a  custom  should  exist  therein.  4  Chief 
Justice  Holt,  expresses  the  opinion  that  they  did  not  originate 
at  a  much  earlier  period  than  the  reign  of  Charles  the  Second.  5 

1  Chitty  on  Bills,  10. 

8  Chitty  on  Bills,  334,  335. 

*  3  Kent  Com.,  93,  109;  3  Campb.,  334;  10  Mass.  R.  5;  Wells  v.  White- 
head,  15  Wend.  R.,  527. 

4  Buller  v.  Crips,  6  Mad.  R.,  29;  Claxton  v.  Swift,  3  Mad.  R.  86;  Brora- 
wich  v.  Loyd,  2  Lutw.,  1586;  Sarsfleld  v.  Witherly,  Garth.  82. 

6  6  Mod.  R.  29.  The  use  of  foreign  bills  had  grown  quite  common  previous 
to  that  time.  Clarendon  gives  an  instance  of  their  use.  worthy  of  mention. 


NATURE   AND   ORIGIN.  51 

It  is  certain,  however,  that  these  local  customs  soon  became 
general,  and  that  the  inland  or  domestic  bill  has  finally  become 
as  great  a  favorite  with  the  community  as  its  predecessor,  the 
foreign  bill,  i  Employed  for  a  time  as  a  convenient  device 
among  the  merchants  in  the  transaction  of  business,  this  use 
became  a  local  usage  or  custom  of  trade;  by  degrees  this 
custom  became  general  and  assumed  the  uniformity  and  sta- 
bility of  recognized  and  common  law.  Found  beneficial  to 
men  engaged  in  commerce,  there  was  no  longer  any  reason 
why  it  should  be  confined  among  the  merchants;  and  hence 
it  became  the  common  instrument  of  business,  favored  in  the 
courts  and  improved  by  statutory  enactments.  2 

1  2Bla.  Com.,467. 

*  9th  and  10th  Will.  8,  ch.  17;  3d  and  4th  Anne,  ch.  9. 

When  Charles  the  Second,  after  an  exile  of  twelve  years  from  the  execution  of 
his  father,  was  invited  by  the  English  people  to  return  and  take  his  seat  on  the 
vacant  throne,  the  committees  sent  to  him  by  the  two  houses  of  Parliament, 
carried  with  them  a  donation  or  present  of  fifty  thousand  pounds,  and  a  com- 
mittee from  the  city  of  London,  bore  with  them  a  peace  offering  of  ten  thou- 
sand pounds.  "  It  will  hardly  be  believed,"  says  the  Chancellor,  "  that  this 
money  presented  to  the  king  by  the  Parliament  and  the  city,  and  charged  by 
bills  of  exchange  upon  the  richest  merchants  of  Amsterdam,  who  had  vast 
estates,  could  not  be  received  in  many  days,  though  some  of  the  principal  citi- 
zens of  London  who  came  to  the  king,  went  themselves  to  solicit  it,  and  had 
credit  among  themselves  for  much  greater  sums,  if  they  had  brought  over  no 
bills  of  exchange.  But  this  was  not  the  first  time  (of  which  somewhat  hath 
been  said  before.)  that  it  was  evident  to  the  king,  that  it  is  not  easy  in  that 
most  opulent  city,  with  the  help  of  all  the  rich  towns  adjacent,  and  upon  the 
greatest  credit,  to  draw  together  a  great  sum  of  ready  money.  The  custom  of 
that  country,  which  flourishes  so  much  in  trade,  being  to  make  their  payments 
in  paper  by  assignations;  they  having  very  rarely  occasion  for  a  great  sum  in 
any  one  particular  place.  And  so  at  this  time  his  majesty  was  compelled,  that 
he  might  not  defer  the  voyage  he  so  impatiently  longed  to  make,  to  take  bills  of 
exchange  from  Amsterdam  upon  their  correspondents  in  London,  for  above 
thirty  thousand  pounds  of  the  money  that  was  assigned;  all  which  was  paid  in 
London  as  soon  as  demanded." 

This  casual  passage  in  the  admirable  story  of  the  great  rebellion,  opens  a 
door  through  which  we  can  see  the  mode  of  transacting  financial  affairs  that 
prevailed  two  hundred  years  ago,  and  shows  among  other  things,  the  necessity 
for  the  allowance  of  days  of  grace. 

Clarendon's  History  of  the  Rebellion,  at  the  close. 

The  use  of  bills  of  exchange  had  become  very  common  at  a  much  earlier 
day;  had  in  fact  grown  up  with  the  commerce  of  modern  Europe.  Mr.  Pre.s- 
cott ,  in  his  history  of  Philip  the  Second,  describing  the  prosperous  condition 
of  the  Netherlands,  and  particularly  the  city  of  Antwerp,  says  :  "  A  great 


52  OF    NEGOTIABLE   PAPER. 

Promissory  notes  in  writing,  made  payable  to  the  persons 
to  whom  they  were  given,  or  order,  were  habitually  employed 
in  business  some  time  before  they  acquired  the  sanction  of 
law.  The  courts  decided  against  the  negotiability  of  the  in- 
strument, holding  that  the  endorsement  did  not  give  to  the 
indorsee  a  right  of  action  in  his  own  name  against  the  maker, 

traffic  was  carried  on  in  bills  of  exchange.  Antwerp,  in  short,  became  the 
banking  house  of  Europe,  and  capitalists,  the  Rothschilds  of  their  day,  whose 
dealings  were  with  sovereign  princes,  fixed  their  abode  in  Antwerp,  which  was 
to  the  rest  of  Europe  in  the  sixteenth  century,  what  London  is  in  the  nine- 
teenth— the  great  heart  of  commercial  circulation."  Vol.  1,  page  371. 

6  Mod.  29. 

The  case  just  referred  to,  is  worth  transcribing  as  a  piece  of  history.  A 
note  was  in  this  form  •.  "  I  promise  to  pay  J.  S.,  or  order,  the  sum  of  100/,  on 
account  of  wine  had  from  him."  J.  S.  indorses  this  note  to  another;  the 
indorsee  brings  an  action  against  him  that  drew  this  note,  and  declares  upon 
the  custom  of  merchants,  as  upon  a  bill  of  exchange ;  and  a  motion  was  made 
in  arrest  of  judgment  upon  the  authority  of  Martin  and  Clerk's  case. 

But  Brotherick  would  distinguish  this  case  from  that,  for  there  the  party  to 
whom  the  note  was  originally  made  brought  the  action,  but  here  it  is  the 
indorsee;  and  he  that  gave  this  note  did,  by  the  tenor  thereof,  make  it  assign- 
able or  negotiable  by  the  words  or  order,  which  amounts  to  a  promise  or  under- 
taking to  pay  it  to  any  whom  he  should  appoint,  and  the  indorsement  is  an 
appointment  to  the  plaintiff. 

Ch.  J.  Holt.  I  remember  when  actions  upon  inland  bills  of  exchange  did 
first  begin,  and  then  they  laid  a  particular  custom  between  London  and  Bristol, 
and  it  was  an  action  against  the  acceptor;  the  defendant's  counsel  would  put 
them  to  prove  the  custom,  at  which  Hale,  who  tried  it,  laughed  and  said  "  they 
had  a  hopeful  case  on  't;"  and  in  my  lord  North's  time  it  was  said  that  the 
custom  in  that  case  was  part  of  the  common  law  of  England,  and  the  actions 
since  became  frequent  as  the  trade  of  the  nation  did  increase,  and  all  the  dif- 
ference between  foreign  and  inland  bills  is  that  foreign  bills  must  be  protested 
before  a  public  notary,  before  the  drawer  may  be  charged;  but  inland  bills 
need  no  protest.  And  the  notes  in  question  are  only  an  invention  of  the  gold- 
smiths in  Lombard  street,  who  had  a  mind  to  make  a  law  to  bind  all  those  that 
did  deal  with  them,  and  sure  to  allow  such  note  to  carry  any  lien  with  it  were 
to  turn  a  piece  of  paper,  which  is  in  law  but  evidence  of  a  parcel  contract,  into 
a  specialty;  and  besides,  it  would  impower  one  to  assign  that  to  another  which 
he  could  not  have  himself.  For  since  he  to  whom  this  note  was  made  could 
not  have  this  action,  how  can  his  assignee  have  it  ?  And  these  notes  are  not 
in  the  nature  of  a  bill  of  exchange ;  for  the  reason  of  the  custom  of  bills  of 
exchange  is  for  the  expedition  of  trade  and  its  safety,  and  likewise  it  hinders 
exportation  of  money  out  of  the  realm.  He  said,  if  the  indorsee  had  brought 
this  action  against  the  indorser,  it  might  peradventure  lie,  for  the  indorsement 
may  be  said  to  be  tantamount  to  drawing  a  new  bill  for  so  much  as  the  note  is 
for,  upon  the  person  that  gave  the  note;  or  he  may  sue  the  first  drawer  in  the 
name  of  the  indorser,  and  convert  the  money,  when  recovered,  to  his  own  use; 


NATURE    AND   ORIGIN.  53 

but  that  the  indorsee  might  bring  his  action  in  the  name  of 
the  payee  and  recover  thereon  the  amount  to  his  own  use,  the 
indorsement  being  an  appointment  or  agreement  to  that  effect; 
or  that  he  might  bring  an  action  thereon  against  the  person 
win)  indorsed  it  to  him,  such  indorsement  being  equivalent 
to  the  drawing  of  a  bill  for  the  amount  of  the  note.  But  the 
use  of  such  negotiable  notes  having  become  general,  they  were 
at  length  by  the  statute  of  3  &  4  Ann,  c.  9,  made  assignable 
and  indorsable  in  like  manner  as  bills  of  exchange.  So  that 
^>ect  to  promissory  notes,  their  negotiability  has  a  statu- 
tory origin;  whereas  the  negotiable  property  of  bills  of 
exchange  rests  upon  what  is  everywhere  termed  the  custom  of 
merchants,  i 

1  2  R.  S.  of  New-York;  3d  ed.,  p.  52-55. 

for  the  indorsement  amounts  at  least  to  an  agreement  that  the  indorsee  should 
sue  for  money  in  the  name  of  the  indorser,  and  receive  it  to  his  own  use,  and 
besides  it  is  a  good  authority  to  the  original  drawer  to  pay  the  money  to  the 
indorsee." 

Mr.  Justice  Powell  then  cited  a  similar  case  brought  in  the  common  pleas, 
making  this  remark,  which  shows  how  rare  such  actions  must  have  been  at 
that  time,  and  also  how  little  confidence  the  courts  felt  in  their  own  knowledge 
of  the  subject:  "  At  another  day  the  chief  justice  declared  that  he  had  desired 
to  speak  with  two  of  the  most  famous  merchants  in  London,  to  be  informed  of 
the  mighty  ill  consequences  that  was  pretended  would  ensue  by  obstructing 
this  course,  and  that  they  had  told  him  it  was  very  frequent  with  them  to  make 
such  notes,  and  that  they  looked  upon  them  as  bills  of  exchange,  and  that  they 
had  been  used  for  a  matter  of  thirty  years;  and  that  not  only  notes,  but  bonds 
for  money  were  transfered  frequently,  and  indorsed  as  bills  of  exchange." 

Butler  v.  Crips,  6  Mod.  R.,  29. 

Claxton  T.  Swift,  is  a  still  earlier  case.  "  The  plaintiff  being  a  merchant, 
brought  an  action  upon  a  bill  of  exchange,  setting  forth  the  custom  of  mer- 
chants, etc.,  and  that  London  and  Worcester  were  ancient  cities,  and  that 
there  was  a  custom  amongst  merchants  that  if  any  person  living  in  Worcester 
draw  a  bill  upon  another  in  London,  and  if  this  bill  be  accepted  and  indorsed, 
the  first  indorser  is  liable  to  the  payment.  That  one  Hughes  drew  a  bill  of 
100/  upon  Mr.  Pardoe,  payable  to  the  defendant,  or  order. 

Mr.  Swift  indorsed  this  bill  to  Allen,  or  order,  and  Allen  indorsed  it  to 
Claxton.  The  money  not  being  paid  Claxton  brings  his  action  against  liughes, 
and  recovers,  but  did  not  take  out  execution. 

Afterwards  he  sued  Mr.  Swift,  who  was  the  first  indorser.  and  he  pleads  the 
first  recovery  against  Hughes  in  bar  to  this  action,  and  avers  that  it  was  for 
the  same  bill,  and  that  they  were  the  same  parties.  To  this  plea  the  plaintiff 
demurred,  and  the  defendant  joined  in  demurrer.  Mr.  Pollexfen  then  argued 
that  the  plaintiff  had  his  election  to  bring  his  action  against  either  of  the 
iudorsers  or  against  the  drawer,  but  not  against  them  all. 


54  OF    NEGOTIABLE   PAPER. 

The  payee,  we  may  observe,  either  of  a  bill  of  exchange  or 
of  a  promissory  note,  has  clearly  a  property  vested  in  him 
(not  indeed  in  possession  but  in  action,)  by  the  express  con- 
tract of  the  drawer  in  the  case  of  a  promissory  note,  and,  in 
the  case  of  a  bill  of  exchange,  by  his  implied  contract,  namely; 
that  provided  the  drawee  does  not  pay  the  bill,  the  drawer 
will.i  And  this  property,  so  vested,  may  be  transfered  and 
assigned  from  the  payee  to  any  other  man,  contrary  to  the 
general  rules  of  the  common  law,  that  no  chose  in  action  is 
assignable,  which  assignment  is  the  life  of  paper  credit. 

In  the  first  place,  the  payee  or  person  to  whom  or  to  whose 
order  such  bill  of  exchange  or  promissory  note  is  payable,  may 
by  indorsement,  or  writing  his  name  in  dorso,  or  on  the  back 
of  it,  assign  over  his  whole  property  to  the  bearer,  or  else  to 
another  person  by  name,  either  of  whom  is  then  called  the 
indorsee;  and  he  may  assign  the  same  to  another,  and  so  on 
in  infinitum.  And  a  promissory  note,  payable  to  A  or  bearer, 
is  negotiable  without  any  indorsement,  and  payment  thereof 
may  be  demanded  by  any  bearer  of  it.  But  whenever  the 
bill  or  the  note  is  past  due  and  negotiated  after  that,  the  in- 
dorsee takes  it  subject  to  every  defence  which  existed  between 
the  original  parties  at  the  time  of  the  transfer  to  him.  2 

1  2  Bla.  Com.,  468. 

2  Havens  v.  Huntington,   1  Cowen  R.,  387;  Brown  v.  Davis,  3  T.  R.,  80; 
Johnson  v.  Bloodgood,  1  John.  Gas.,  51;  2  Caine's  Cas.  in  Error,  303;  1  John. 
Cas.,  331;  2  John.  R.,  306;  id  5.  318;  8  id.  454. 

Chief  Justice.  If  the  plaintiff  had  accepted  of  a  bond  from  the  first  drawer, 
in  satisfaction  of  this  money,  it  had  been  a  good  bar  to  any  action  which  might 
have  been  brought  against  the  other  indorsers  for  the  same;  and  as  this  case  is. 
the  drawer  is  still  liable,  and  if  he  fail  in  payment  the  first  indorser  is  charge- 
able, because  if  he  make  indorsement  upon  a  bad  bill,  'tis  equity  and  good  con- 
science that  the  indorser  may  resort  to  him  to  make  it  good.  But  the  other 
justices  being  against  the  opinion  of  the  chief  justice,  judgment  was  given  for 
the  defendant;  but  it  was  afterwards  reversed  in  the  exchequer  chambtr. 
Lutw.  88,  2  b  " 

This  case  was  decided  in  1685,  and  is  interesting  as  evidence  of  the  law  at 
that  time,  and  as  shewing  the  origin  and  growth  of  the  law-merchant.  3  Mod. 
86.  Perhaps  we  should  say  in  justice  to  the  memory  of  an  eminent  judge,  that 
Holt,  referring  to  the  reports  called  Modern,  complained  bitterly  of  his  repor- 
ters, saying  that  the  tcimble-scamble  stuff  which  they  published  would  "  make 
posterity  think  ill  of  his  understanding,  and  that  of  his  brethren  on  the  bench." 
The  other  reporters  of  the  period  were  better  scholars,  and  particularly  Lord 
Raymond,  who  was  his  pupil  and  became  his  successor. 


NATURE    AND   ORIGIN.  55 

As  we  have  said,  it  was  the  original  doctrine  of  the  common 
law  that  choses  in  action  caimot  be  transfered  to  a  stranger, 
"because,  under  color  thereof,  pretended  titles  might  be  granted 
to  great  men,  whereby  right  might  be  trodden  down  and  the 
weak  oppressed,  which  the  common  law  forbiddeth  !'  i  The 
rule,  as  the  reason  given  for  it  implies,  originally  had  relation 
only  to  landed  estates;  but  it  was  afterwards  made  equally 
applicable  to  the  assignment  of  a  mere  personal  chattel  not  in 
possession,2  and  to  all  such  interests  in  contracts  as,  in  case 
of  non-performance,  can  only  be  reduced  into  beneficial  pos- 
session by  an  action  or  suit.  3  But  the  rule  was  never 
adopted  in  courts  of  equity;  4  and  it  has  been  gradually  modi- 
fied in  courts  of  law,  so  as  to  protect  the  rights  of  the  assignee 
and  defend  him  from  the  unconscientious  conduct  of  the 
assignor.  5  At  a  very  early  day,  it  was  asserted  by  one  of 
the  judges,  "  that  if  an  assignee  of  a  chose  in  action  have  an 
equity,  that  equity  shall  be  no  exile  to  the  courts  of  common 
law."  Though  he  has  not  a  right  of  action  in  his  own  name, 
he  has  an  equitable  right  which  the  courts  recognize  and  take 
care  to  protect :  for  example,  they  will  not  permit  the  assignor 
of  a  judgment  to  enter  satisfaction  upon  it;  they  will  not  per- 
mit him  to  discontinue  a  suit  brought  in  his  own  name  on  a 
bond  which  he  has  assigned;  and  they  will  not  even  permit 
his  declarations  and  admissions  made  subsequent  to  the  assign- 
ment to  be  shown  in  evidence  by  way  of  defeating  a  recovery 
by  his  assignee.  6  And  in  this  state,  it  is  at  length  settled  by 
statute,  that  the  assignee  or  real  party  in  interest  may  and  must 
bring  his  action  in  his  own  name  upon  the  thing  assigned; 
with  this  qualification,  that  no  assignment  of  a  thing  in  action 

Co.  Litt.  14  a;  Scolcy  v.  Daniel,  2  Bos.  &  Pull.  541. 

Pat  ridge  v.  Strange,  Plowd.  88;  Joues  v.  Roe,  1  Hen.  Bla.,  80. 

2  Bla.  Com.,  442. 

Wright  v.  Wright,  1  Ves.,  411,  412. 

Welsh  T.  Mandeville,  1  Whcaton.  233;  Andrews  v.  Beecher.  1  John.  Cas. 
411 ;  3  John.  R.426;  Legh  v.  Legh,  1  Bos.  &  Pull.  447;  Frcar  v.  Evertson,  20 
John.  R.,  142. 

•  2  John  Cas.,  121,  268;  M'Cullen  T.  Coxe,  1  Dall.,  139;  Hacket  v.  Martin, 
SGreenl.,  77;  20  John  R.  142;  16  Maine  R.  49;  1  Mass.  B.  117;  3  id.  558;  4 
id.  508;  9  id.  837;  10  id.  316;  10  Wend.  676. 


56  OF    NEGOTIABLE    PAPER. 

not  arising  out  of  contract  shall  be  permitted,  and  that  execu- 
tors, administrators  and  trustees  of  express  trusts,  or  persons 
expressly  authorised  by  statute  may  sue  without  joining  with 
them  the  persons  for  whose  benefit  the  action  is  prosecuted,  i 
So  that  with  us,  all  choses  or  things  in  action  arising  out  of 
contract  are  to  be  enforced  in  the  name  of  the  assignee;  though 
the  assignment,  like  all  other  contracts,  must  be  shown  to  have 
been  made  for  a  valuable  consideration. 

On  the  other  hand,  as  to  bills  of  exchange  and  negotiable 
promissory  notes,  a  consideration  is  always  implied  in  law,  and 
the  transfer  by  indorsement  is  held  to  vest  in  the  indorsee, 
both  the  legal  and  equitable  title ;  and  the  presumption  is  that 
the  person  in  possession  of  the  note  or  bill  is  the  legal  holder.  2 
Formerly  it  was  usual  in  bills  of  exchange  to  express  that  the 
value  thereof  hath  been  received  by  the  drawer;  3  in  order  to 
show  the  consideration,  upon  which  the  implied  contract  of 
repayment  arises;  and  promissory  notes  are  very  generally 
drawn  so  as  to  express  the  fact  that  they  have  been  given  for 
value  received.  But  no  such  words  are  necessary  to  the  vali- 
dity of  the  instrument,  and  they  are  very  frequently  omitted.  4 

Between  the  original  parties  the  consideration  may  be 
inquired  into;  but  an  innocent  holder  of  negotiable  paper  who 
has  received  it  in  the  usual  course  of  trade,  for  a  valuable 
consideration,  though  from  a  person  having  no  title  and  no 
authority  to  transfer  it,  will  be  protected  even  as  against  the 
claim  of  the  previous  owner;  the  rule  is  otherwise  where  it 
appears  that  the  paper  was  received  as  security  for  an  ante- 
cedent debt  due  from  the  person  who  made  the  unauthorised 
transfer,  and  the  holder  neither  parted  with  value  on  the  credit 
of  it,  nor  relinquished  any  previous  security.  In  other  words, 
the  bona  fide  holder  of  negotiable  paper  who  has  paid  value 
for  it  before  its  maturity,  or  who  has  relinquished  some  avail- 
able security  or  valuable  right  on  the  credit  thereof,  is  enti- 
tled to  protection,  and  may  recover  thereon  notwithstanding 
some  of  the  previous  holders  procured  the  same  by  fraud  or 

1  Code  of  Procedure,  §  111,  112,  13. 

*  Baker  v.  Arnold,  8  Cai.  R.  279;  Brennan  v.  Hess  13  John.  R.,  52. 

3  2Bla.  Com.,468. 

4  Chitty  on  Bills,  69. 


NATURE   A1H)   ORIGIN.  57 

diverted  it  from  its  original  purpose.  But  the  fact  that  it  has 
been  received,  not  in  the  usual  course  of  trade,  but  only  as  a 
collateral  security  for  a  pre-existing  debt,  lets  in  a  defence  to 
the  plaintiff's  title. i 

The  law  on  this  subject  was  lately  stated  by  the  Supreme 
Court  of  the  United  States  in  these  terms :  There  is  no  doubt 
that  a  bona  fide  holder  of  a  negotiable  instrument  for  a  valu- 
able consideration,  without  any  notice  of  facts,  which  impeach 
its  validity  between  the  antecedent  parties,  if  he  takes  it 
under  an  indorsement  before  the  same  becomes  due,  holds  the 
title  unaffected  by  these  facts,  and  may  recover  thereon, 
although  as  between  the  antecedent  parties  the  transaction 
may  be  without  any  legal  validity.  This  is  a  doctrine  so  long 
and  so  well  established,  and  so  essential  to  the  security  of 
negotiable  paper,  that  it  is  laid  up  among  the  fundamentals 
of  the  law,  and  requires  no  authority  or  reasoning  to  be 
brought  in  its  support.2  But  in  the  application  of  the  prin- 
ciple thus  stated,  there  is  some  diversity  of  opinion;  if  the 
holder  received  the  paper  in  payment  of  a  pre-existing  debt,  it 
is  adjudged  by  high  authority  that  he  may  recover  on  it,  not- 
withstanding the  facts  which  implicate  its  validity  as  between 
the  antecedent  parties;  and  it  is  adjudged  that,  though  he 
received  the  paper  in  good  faith  as  a  pledge  or  security  for  a 
prior  debt,  he  is  not  entitled  to  the  same  protection  as  if  he 
had  received  it  in  the  usual  course  of  trade  and  given  or  parted 
with  value  for  it.3 

Bank  checks  are  in  substance  bills  of  exchange,  payable  on 
demand. 4  They  are  sometimes  said  to  resemble,  or  to  be  like 
bills  of  exchange;  but  they  are  in  truth  a  species  of  the  bill, 
just  as  a  note  on  demand,  or  a  banker's  or  a  goldsmith's  note 

1  Coddington  v.  Bay,  20  John.  R.  637;  Stalker  v.  M'Donald,  6  Hill  R.,  93, 
and  the  cases  there  cited. 

1  Swift  v.  Tyson,  16  Peters  U.  S.  S  R.,  1. 

*  5  John.  Ch.  R.,  54;  20  John.  R  ,  687;  6  Hill  R  ,  93;  8  Kent's  Com.,  81. 
The  subject  is  considered  more  at  length  in  a  subsequent  chapter. 

4  Harker  v.  Anderson,  21  Wend.  R..  872;  Boehm  v.  Sterling,  7  Term  R., 
4191  426;  Cruger  v.  Armstrong;  Merchants'  Bank  v.  Spicer,  6  Wend.,  443; 
Murray  v.  Judah,  6  Cowen,  484;  Chapman  v.  White,  2  Selden  R.,  412. 

2 


58  OF    NEGOTIABLE    PAPER. 

is  a  species  of  promissory  note.  It  is  essential  to  a  check,  eo 
nomine,  or  bank  draft,  that  it  be  payable  on  demand,  and 
then  days  of  grace  do  not  attach,  any  more  than  to  bills  or 
notes  payable  on  demand. i  If  drawn  on  a  bank,  payable  to 
the  order  of  the  payee  at  a  future  day,  it  is  not  properly  a 
check,  but  a  bill  of  exchange,  entitled  to  days  of  grace.  The 
circumstance  that  it  is  drawn  on  a  bank  does  not  determine 
its  character;  for  if  it  did,  there  could  be  no  days  of  grace 
allowed  on  any  draft  drawn  on  banking  associations.2  It  is 
generally  made  payable  to  bearer,  but  its  character  is  not 
changed  by  the  fact  that  it  is  made  payable  to  the  order  of  the 
person  to  whom  it  is  given. 3  Being  indorsed,  the  holder,  if 
he  would  preserve  his  right  to  resort  to  the  drawers  and  indor- 
sers,  must  use  the  same  diligence  in  presenting  it  for  payment 
and  in  giving  notice  of  the  drawer's  default,  that  would  be 
required  of  him  as  the  holder  of  an  inland  bill  .4  It  must  be 
presented  for  payment  within  a  reasonable  time;  and  it  is 
asserted  that  the  holder  is  required  to  use  even  greater  dili- 
gence in  presenting  it  for  payment  than  is  necessary  in  pre- 
senting common  inland  bills  of  exchange. 5  Though  the  drawer 
have  no  funds  in  the  bank  on  which  he  gives  his  check,  yet 
in  order  to  charge  the  indorser  it  is  essential  that  the  check 

1  Woodruff  v.  Merchants'  Bank  of  the  city  of  New-York,  25  Wend.  672;  6 
Hill  R.,  174. 

1  Brown  v.  Newall,  4  Selden  R.,  190.  The  law-merchant  is  stated  in  the 
text.  ''An  act  in  relation  to  commercial  paper,"  passed  April  17,  1857,  pro- 
vides that  checks  and  drafts,  appearing  on  their  face  to  be  drawn  upon  banks, 
banking  associations  or  individual  bankers,  carrying  on  business  under  the  act 
to  authorise  the  business  of  banking,  payable  on  any  specified  day  or  in  any 
number  of  days  after  the  date  or  sight  thereof,  shall  become  due  and  payable 
without  any  days  of  grace  being  allowed;  and  that  it  shall  not  be  necessary  to 
protest  the  same  for  non-acceptance.  And  the  same  act  declares  that  drafts 
drawn  payable  at  sight,  at  any  place  within  this  state,  shall  be  deemed  due 
and  payable  on  presentation,  without  any  days  of  grace  being  allowed  thereon. 
Session  Laws  of  New-York.  Under  this  statute  it  will  become  important  to 
determine  the  meaning  of  the  terms  it  shall  not  be  necessary  to  protest  the  same 
for  non-acceptance.  Do  these  words  mean  that  it  shall  not  be  necessary  to 
give  the  drawer  and  indorser  notice  of  non-acceptance  ? 

»  Mohawk  Bank  v.  Broderick,  10  Wend.  R.,  304. 

4  6  Wend.  R.,  445 

»  Gough  v.  Staats,  13  Wend.  R.  549;  10  id.  304;  4  Duer  R.,  122. 


NATURE   AND   ORIGIN.  59 

be  presented  within  a  reasonable  time,  and  protested  for  non- 
payment, i  The  maker  or  drawer's  undertaking  is,  not  that 
he  will  pay  the  amount,  but  that  the  bank  will  pay  it  on  pre- 
sentment. But  as  between  the  maker  and  the  holder  there  are 
many  circumstances  that  will  excuse  a  delay  or  failure  to 
demand  payment;  as  if  he  have  no  funds  in  the  bank  on  which 
he  draws,  or  having  funds  there  withdraws  them  to  his  own 
use.  2 

Bank  notes,  as  we  have  just  now  remarked,  are  a  species  of 
promissory  note;  they  are  drawn  payable  to  the  bearer  on 
demand,  and  are  for  many  purposes  considered  and  treated  as 
cash.  Being  payable  on  demand  and  issued  by  a  responsible 
association,  they  are  not  regarded  as  mere  securities  for  debts, 
but  are  by  general  consent  used  as  money  in  the  ordinary 
course  and  transaction  of  business.  The  business  of  banking 
being  regulated  by  law,  and  carried  on  under  such  conditions 
and  restrictions  as  are  deemed  necessary  for  the  protection  of 
the  community,  a  certain  credit  attaches  to  the  notes  of  a  bank 
that  gives  them  currency,  and  renders  them  a  convenient  sub- 
stitute for  money.3  Hence  the  practice  is  to  use  them  as  such 
in  the  payment  of  debts,  though  they  are  not  a  legal  tender, 
and  are  strictly  only  promissory  notes.4  Being  assignable  by 
delivery,  well  secured,  and  payable  in  specie  on  demand,  they 
are  habitually  spoken  of  and  given  and  received  as  cash;  so 
that  in  popular  language,  bank  notes  issued  by  authority  and 
payable  at  any  time  in  coin,  are  called  money,  and  are  said  to 
represent  coin,  for  which  they  are  used  as  a  substitute.  For 
this  reason  they  pass  under  a  will  as  money,  on  the  presump- 
tion that  the  testator  employed  the  language  used  by  him  in 
its  ordinary  meaning.5 

The  value  of  bank  bills  depends  upon  the  fact  that  they  are 
redeemable  at  any  moment,  and  are  not  a  mere  creation  of 

1  21  Wend.  R.,  876. 
*  6  Cowen  R.,  484. 

»  Smith  v.  Strong,  2  Hill  R.  241 ;  Safford  v.  Wyckoff,  1  Hill  R.,  18. 
4  Jffferson  County  Bank  v.  Chapman,  19  John.  R.,  116;  Thomas  v.  Dodd,  6 
Hill  R.,  340;  Warren  r.  Mains,  7  John.  R.,  476. 
'  Chitty  on  Bills,  523. 


60  OF   NEGOTIABLE   PAPER. 

authority;  for  it  is  impossible  to  create  money  by  an  arbitrary 
act  of  legislation.  An  English  statesman,  towards  the  close 
of  the  last  century,  reviewing  the  course  of  the  French  revo- 
lution, and  the  financial  expedients  to  which  its  leaders  had 
been  compelled  to  resort,  makes  these  pertinent  and  pithy 
remarks :  "  At  present  the  state  of  their  treasury  sinks  every 
day  more  and  more  in  cash,  and  swells -more  and  more  in 
fictitious  representation.  When  so  little  within  or  without  is 
now  found  but  paper,  the  representative,  not  of  opulence  but 
of  want,  the  creature  not  of  credit  but  of  power,  they  imagine 
that  our  flourishing  state  in  England  is  owing  to  that  bank 
paper,  and  not  the  bank  paper  to  the  flourishing  condition  of 
our  commerce,  to  the  solidity  of  our  credit,  and  to  the  total 
exclusion  of  all  idea  of  power  from  any  part  of  the  transac- 
tion. They  forget  that  in  England,  not  one  shilling  of  paper 
money  of  any  description  is  received  but  of  choice,  that  the 
whole  has  had  its  origin  in  cash  actually  deposited,  and  that 
it  is  convertible,  at  pleasure,  in  an  instant,  and  without  the 
smallest  loss,  into  cash  again  ."i 

The  same  is  true  in  this  country;  the  legal  character  of  a 
bank  bill  is  that  of  a  promissory  note,  and  its  currency  de- 
pends upon  the  credit  of  the  bank  issuing  it;  while  the  credit 
of  the  bank  depends  in  part  upon  its  management,  and  in  part 
upon  the  security  which  it  has  deposited,  under  the  law  of  the 
state,  for  the  redemption  of  its  notes. 

There  is  still  another  species  of  negotiable  paper,  namely, 
bonds  issued  by  states  or  corporations  under  authority  of  law, 
and  drawn  in  negotiable  form.  The  title  to  these  instruments, 
which  are  frequently  made  payable  to  bearer,  passes  by  mere 
delivery;  and  they  are  therefore,  in  some  respects,  treated  as 
negotiable  paper.  One  who  purchases  them  without  notice 
of  any  defect  in  the  title  of  the  vendor  has  been  held  to 
acquire  a  valid  title,  free  from  the  equities  existing  between 
prior  parties. 2  The  form,  design  and  nature  of  the  instrument 
shew  that  it  is  intended  for  negotiation  and  sale,  like  a  nego- 

1  3d  vol.  of  Burke's  Works,  266. 

a  Fisher  v.  The  Morris  Canal  and  Banking  Company,  3  Am.  Law  Reg.,  423; 
4  Duer  R.,  539,  582;  Delafield  v.  State  of  Illinois,  2  Hill  R.,  157,  177. 


NATURE   AND   ORIGIN.  61 

tiable  note  or  bill  of  exchange.  It  is  itself  an  absolute  con- 
tract for  the  payment  of  a  certain  sum  of  money  to  the  bearer; 
and  the  common  usage  is  to  sell  such  bonds  in  the  market,  and 
transfer  them  by  delivery.  A  certificate  of  stock,  which  is 
not  a  contract  for  the  payment  of  money  and  is  not  in  terms 
negotiable,  is  an  entirely  different  instrument,  and  is  not  placed 
upon  the  footing  of  commercial  paper;  and  consequently  the 
lender,  taking  it  in  good  faith  as  a  security  for  a  loan  of  money, 
does  not  thereby  acquire  such  a  right  as  against  the  corpora- 
tion issuing  it,  as  will  entitle  him  to  compensation  notwith- 
standing the  certificate  was  fraudulently  issued  by  the  agent 
of  the  corporation.!  In  other  words,  certificates  of  stock  in 
a  banking  association,  or  in  a  railroad  company  are  not  secu- 
rities for  the  payment  of  money,  that  may  be  transfered, 
subject  to  the  rules  applicable  to  negotiable  paper;  on  the 
contrary,  they  are  simply  the  muniments  and  evidence  of  the 
holder's  title  to  a  given  share  in  the  franchises  of  the  corpo- 
ration of  which  he  is  a  member. 

1  Mechanic's  Bank  v.  New-York  and  New  Haven  Railroad  Company,  4  Duer 
R.,  480;  S.  C.,  8  Kernan  R.,  599.  A  bill  of  lading  may  be  transfered  by  in- 
dorsement and  delivery,  and  possesses  a  negotiable  quality,  thongb  it  is  not  in 
the  full  sense  of  the  term  a  negotiable  instrument.  Saltus  v.  Everett,  15 
Wend.,  475;  20  id.  257;  Gurney  v.  Behrend,  3  Ellis  and  Black.,  622;  4  Denio, 
323;  14  Mees.  and  W.,  402;  2  Sand.  68;  15  Barb.  R.  506;  2  Term  R.  63. 


. 


CHAPTER    II. 

PARTIES  TO  BILLS   OF  EXCHANGE  AND  PROMISSORY 

NOTES. 

A  contract  is  an  agreement  by  which  one  or  more  persons 
bind  themselves  to  one  or  more  others,  to  give,  to  do,  or  not 
to  do  some  act  or  thing;  and  four  conditions  are  essential  to 
the  validity  of  a  contract:  the  consent  of  the  party  bound; 
the  capacity  of  the  contractor;  an  object  certain  which  forms 
the  subject  of  the  engagement,  and  a  lawful  consideration. 
A  promise  by  one  party  amounts  to  nothing  until  it  has  been 
accepted  by  the  party  to  whom  it  was  made.i  The  obligation 
must  be  mutual,  and  the  parties  must  assent  to  the  same  terms 
in  the  same  sense.2 

The  assent  which  is  requisite  to  give  validity  to  a  promise, 
necessarily  implies  a  free  and  serious  exercise  of  the  reasoning 
faculty;  in  other  words,  a  capacity  to  deliberate  upon  the 
matter,  and  weigh  its  consequences.  One  who  is  deprived  of 
the  use  of  his  understanding,  or  deemed  by  law  not  to  have 
attained  a  sufficient  degree  of  mental  power,  cannot  give  the 
requisite  assent,  and  consequently  cannot  enter  into  a  binding 
agreement.  Mere  weakness  of  mind,  short  of  insanity;  im- 
maturity of  reason,  where  the  party  has  attained  to  full  age; 
the  want  of  experience  and  skill  in  the  subject  matter  of  the 
contract;  neither  of  these  affords  any  ground  for  relief  at  law 
or  in  equity;  provided  no  actual  fraud  has  been  practised  on 
the  party.3  But  these  circumstances  become  material  consid- 

1  Tuttle  v.  Love,  7  John.  R.,  171;  Gleason  v.  Henshaw,  4  Wheat.,  425; 
Falls  v.  Gaithen,  9  Porter,  605;  Hutchinson  v.  Bowker,  5  Mee.  &  Wels.,  635. 

9  Hazard  v.  New  Eng.  Mar.  Ins.  Co.,  1  Sumner,  218. 

1  Stewart  v.  Liapenard,  26  Wend.  R.,  299;  Farnam  v.  Brooks,  9  Pick.,  212; 
Dodds  v.  Wilson,  1  Const.  Rep.,  448. 


PARTIES.  63 

erations  in  cases  of  fraud  and  unfair  practice,  when  the  con- 
tract is  entirely  to  the  disadvantage  of  the  weaker  party. i 

Persons  of  non-sane  mind  may  plead  and  show  the  fact, 
that  at  the  time  of  giving  or  drawing  a  promissory  note  or 
bill  of  exchange,  they  were  insane  and  incapable  of  contract- 
ing.2  Being  bereft  of  reason  and  understanding,  they  are 
considered  incapable  of  consenting  to  a  contract,  or  of  doing 
any  other  valid  act;  and  although  their  contracts  are  not 
generally  absolutely  void,  but  only  voidable,  the  law  takes 
care  effectually  and  fully  to  protect  their  interests;  and  will 
allow  them  to  plead  their  disability  in  avoidance  of  their  con- 
veyances, purchases  and  contracts. 3  No  matter  though  the 
contract  be  free  from  all  imputation  of  unfairness,  the  insane 
have  no  contracting  capacity,  so  as  to  bind  themselves  by  a 
legal  agreement.  Thus,  an  insane  man  cannot  make  a  valid 
pledge  of  a  promissory  note,  even  where  the  pledgee  is  igno- 
rant of  his  infirmity  and  practices  no  sort  of  management  in 
obtaining  the  security.4 

It  was  the  ancient  doctrine  of  the  common  law  that  a  per- 
son non  compos  mentis  may  avoid  his  deed  or  feoffment;>  it 
was  afterwards  held  that  no  man  shall  be  allowed  to  disable 
or  stultify  himself  by  pleading  his  own  incapacity  ;tf  but  it  is 
at  length  settled  that  the  contracts  of  idiots  and  insane  per- 
sons are  not  binding  upon  them.7  In  some  cases,  as  for  neces- 
saries and  the  like,  they  have  been  held  answerable  ;*<  and  the 
court  in  one  instance  say,  "  that  the  grants  of  infants,  and  of 
persons  non  compos,  are  parallel,  both  in  law  and  reason.".) 
But  where  the  agreement  is  unexecuted,  it  is  very  clear  that 

Dane  v.  Kirkwell,  8  Carr.  and  P.,  679. 

Rice  v.  Peet,  15  John.  R.,  503. 

Mitchell  T.  Kingman,  5  Pick.  R.,  431. 

Seaver  v.  Pliclps,  11  Pick.,  804. 

Tear  Book  9,  Henry  6,  b ;  Chitty  on  contracts,  186. 

Beverley's  case,  4  Rep.,  126;  Strand  v.  Marshall,  Cro.  Eliz.,  398;  Cross  T. 
A  .lr.-ws.  id.  622. 

Terbush  v.  Bispham,  2  Mees.  and  Wels.,  6. 

Bagster  and  others  v.  Earl  Portsmouth,  2  C.  and  P.  178;  S.  C.  in  7  D.  and 
R.,  614;  and  5  B.  and  C.,  170;  Sentance  v.  Poole,  3  C.  and  P.,  1. 
•  Thompson  v.  Leach,  3  Mod.,  810. 


64  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

it  cannot  be  enforced,  because  it  wants  the  essential  properties 
of  a  legal  contract.! 

The  presumption  is  that  all  persons  are  capable  of  con- 
tracting, unless  they  are  declared  incapable  by  law.  The 
disability  or  want  of  capacity  is  treated  as  an  exception  to  the 
general  rule,  and  must  consequently  be  pleaded  and  estab- 
lished by  evidence.2  Being  put  in  issue,  it  is  to  be  found  by 
the  jury  as  a  fact  from  the  evidence  produced  before  them. 

Prima  facie  an  inquisition  taken  upon  a  commission  of 
lunacy,  is  evidence  of  the  fact  found  by  it;  for  this  is  in  the 
nature  of  a  proceeding  in  rein,  since  it  is  instituted  by  the 
direction  of  the  court  to  whom  the  custody  of  idiots  and 
lunatics  is  intrusted.3  The  inquisition  is  admissible,  but  not 
conclusive;  it  is  received  for  the  consideration  of  the  jury, 
who,  after  comparing  it  with  the  other  facts  in  the  case,  are 
to  determine  what  weight  it  is  entitled  to;4  the  rule  being 
that  the  acts  of  a  lunatic  before  office  found,  are  not  void 
but  voidable;  while  after  office  found  they  are  void. 5 

Infants  are  capable  of  binding  themselves  by  contract  for 
necessaries  only;  in  respect  to  all  other  contracts,  they  are  at 
liberty  to  disaffirm  them  on  coming  of  age. 6  There  is  some 
difficulty  in  distinguishing  between  those  contracts  of  an  in- 
fant which  are  void,  and  those  that  are  voidable  at  his  elec- 
tion. But  the  difficulty,  we  apprehend,  arises  mainly  from 
the  fact  that  his  contract  is  frequently  spoken  of  in  the  earlier 
cases  as  void,  when  it  is  intended  that  it  is  only  void  as  to 
him,  although  still  capable  of  being  ratified  by  him.  Thus, 

1  Tales  v.  Boen,  Stra.  1104;  Sergeson  v.  Sealey,  2  Atk.,  412;  Faulder  v. 
Silk,  3Campb.,126. 

*  26  Wend.  R.,  225;  4  Cowen,  207;  Harrison  v.  Richardson,  1  Mood,  and 
Rob..  504. 

*  Hart  v.  Deamen,  6  Wend.  R.,  497. 

*  Farlan  v.  Silk,  3  Campb.,  126;  2  Atk.,  412. 

It  has  been  held  in  England  that  a  contract,  made  by  a  person  in  a  complete 
state  of  intoxication,  is  void;  such  a  person  has  no  agreeing  mind.  Per  Lord 
Elleuborough  in  Pitt  v.  Smith,  3  Campb.  33;  Starkie  R.,  126.  In  this  country 
there  are  cases  to  the  same  effect,  especially  cases  of  fraud.  Ford  v.  Hitch- 
cock, 8  Ohio,  214;  2  Vermont,  297;  6  Watts,  139;  3  Cowen  R.,  445. 

'  Jackson  v.  Gumaer,  2  Cowen  R.,  552;  3  J.  J.  Marsh,  658. 
Bacon's  Abr.,  Infancy. 


PARTIES.  65 

in  one  case  the  court  say,  "  a  negotiable  note  given  by  an 
infant,  even  for  necessaries,  is  void.i  This  we  consider  to  be 
the  law,  and  it  is  the  opinion  of  respectable  writers.  The 
reason  given  is,  that  if  the  note  be  valid  in  the  first  instance 
as  a  negotiable  note,  the  consideration  can  not  be  inquired 
into  when  it  is  in  the  hands  of  a  bona  fide  holder,  and  the 
infant  would  thereby  be  precluded  from  questioning  the  con- 
sideration." In  a  later  case,  where  infancy  was  the  defence 
pleaded  to  a  promissory  note,  the  court  held  that  the  note  was 
merely  voidable  and  not  void,  and  that  therefore  it  could  be 
made  available  by  a  new  promise.2  But  this  new  promise  or 
ratification  of  the  old,  must  be  equivalent  to  a  new  contract.3 

During  his  minority,  the  infant  can  not  make  a  contract 
waiving  the  privilege  accorded  to  him  by  law.  Though  he 
gives  his  negotiable  note  for  necessaries,  the  holder  in  an  action 
upon  it  must  shew  that  it  was  so  given,  and  he  can  then  recover 
only  so  much  as  the  things  furnished  were  reasonably  worth.4 
But  here  the  recovery  is  not  through  the  force  of  the  terms 
used  in  the  note;  on  the  contrary,  it  proceeds  upon  the  origi- 
nal consideration,  thus  destroying  the  negotiability  of  the 
instrument  so  far  as  that  depends  upon  the  legal  presumption 
that  it  has  been  given  for  value,  or  upon  the  obligation  of  the 
promise.5  When  the  action  is  upon  the  note,  it  is  barred  by 
the  plea  that  it  was  given  by  an  infant :  unless  the  plaintiff 
then  proceeds  to  shew  that  the  note  was  given  for  necessaries, 
his  action  fails.  But  in  some  cases  it  is  held  that,  notwith- 
standing the  consideration  is  open  to  inquiry,  the  action 
thereon  may  be  maintained  by  the  holder  of  the  note,  by  an 
indorsee.6 

An  infant  makes  a  negotiable  note,  which  can  not  be  en- 
forced against  him  on  the  ground  of  his  infancy :  on  coming 
of  age,  he  promises  the  holder  or  party  in  interest  to  pay  the 

Swasey  v  Vanderbeyden,  10  John.  R-,  88. 
Everson  v.  Carpenter,  17  Wend.  R.,  419. 

Goodsell  v.  Myers,  3  Wend.  R.,  479;  Millard  T.  Hewlett,  19  id.  801. 
Earle  v.  Reed,  10  Metcalf,  887. 
Beeler  v.  Toung,  1  Bibb,  619. 

Dubose  T.  Wheddon,  4  McCord,  221,  2  Hill,  S.  C.  R.  400;  Bonchell  T. 
Clary,  8  Brevard,  194;  10  Metcalf,  887. 


66  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

note,  and  this  new  promise  is  a  ratification  of  the  note  ;  is 
equivalent  to  a  new  contract.!  And  the  new  promise  made 
to  the  payee  enures  to  the  benefit  of  the  person  to  whom  he 
afterwards  transfers  the  note. 2 

The  contract  of  the  infant  not  being  void,  but  only  voidable 
at  his  election,  the  payee  or  indorsee  of  the  note  brings  his 
action  upon  the  original  promise,  and  replies  the  new  promise 
to  a  plea  of  infancy  when  that  is  interposed  by  the  infant. 
This  form  of  pleading  results  naturally  from  the  nature  of 
his  contract,  and  the  relation  in  which  he  stands  towards 
the  party  with  whom  he  has  made  the  agreement  j  unless  he 
chooses  to  avoid  it,  the  contract  is  valid. 3  His  new  promise 
is,  therefore,  logically  treated  as  an  affirmance  or  ratification 
of  the  note. 4  At  the  same  time,  "  it  results  from  the  fact  of 
the  original  contract  not  being  binding  on  the  infant,  that  the 
new  promise  must  possess  all  the  ingredients  of  a  complete 
agreement,  to  enable  the  plaintiff  to  recover  against  the  infant. 
Hence,  as  no  agreement  is  complete  until  the  minds  of  the 
contracting  parties  meet,  the  new  promise,  to  be  binding  on  the 
infant,  must  be  made  to  the  creditor  in  person,  or  to  his  agent. 
The  new  promise  creates  a  new  contract;  and  the  old  debt 
supplies  the  consideration.'^  In  the  same  manner,  a  debt 
barred  by  the  statute  of  limitations  is  a  good  consideration  for 
a  new  and  valid  promise  to  pay  it. 6 

Where  an  infant  loans  money  upon  an  usurious  contract, 
which  the  law  declares  absolutely  void,  he  may  on  coming  of 
age,  recover  the  money  lent  and  for  which  he  has  received 
promissory  notes,  as  money  had  and  received.7  The  rule  that 
he  is  not  bound  by  his  contracts,  with  the  one  exception 
already  named,  runs  through  all  the  cases,  and  no  other  prin- 
ciple is  allowed  to  arrest  its  operation.  Though  he  accept  a 

1  Goodsell  v.  Myers,  supra ;  Taft  v.  Sergeant,  18  Barb.,  320. 
8  Reed  v.  Batchelder,  1  Mete.,  559, 

*  Slocum  v.  Hooker,  13  Barb.  536. 

4  18  Barb.  R.,  320.    Per  Welles  J.  and  cases  there  cited. 

*  Hodges  v.  Hunt,  22.Barb.  R.,  150.     Per  Paige  J. 
6  Watkins  v.  Stevens,  4  Barb.  R.,  168. 

»  19  Wend.  R.,  301;  Corpe  v.  Overton,  10  Bing.,  252, 


PARTIES.  67 

bill  of  exchange,  he  is  not  answerable  as  acceptor  :i  though 
he  state  an  account,  his  act  will  not  preclude  him  from  after- 
wards disputing  and  investigating  the  items.2  He  is  not 
estopped  by  his  own  representations,  nor  can  he  in  any  case 
be  deprived  of  the  protection  which  the  law  allows  him. 3 

It  is  sometimes  said  that  the  infant  cannot  accept  a  bill  of 
exchange :  the  meaning  is  that  he  cannot  by  his  acceptance 
waive  his  right  to  disaffirm  the  contract;  for  it  is  no  doubt 
true,  that  having  accepted  a  bill  he  may  afterwards  render  it 
valid  by  a  new  promise  to  pay  it.4  That  is  to  say,  his  privi- 
lege prevails  over  the  rules  and  presumptions  attaching  to 
negotiable  paper.5  Though  he  carry  on  trade  as  an  adult,  he 
is  not  liable  on  his  notes  or  bills  given  in  the  course  of  it 
during  his  infancy.e  But  he  is  liable  on  a  bill  drawn  on  him 
during  his  infancy  and  accepted  by  him  after  he  comes  to  full 
age;7  for  this  is  an  engagement  entered  into  after  acquiring 
full  capacity  to  contract. 

When  an  infant  indorses  negotiable  notes  or  bills,  he  does 
not  pass  any  interest  in  them  as  against  himself;  but  neither 
the  acceptor  nor  subsequent  indorsers  can  allege  his  infancy 
to  evade  their  liability. 8 

Nor  can  the  drawer  of  a  bill  set  up  the  infancy  of  a  payee 
and  indorser,  as  a  defence  to  an  action  thereon  against  him- 
self.'* In  other  words,  the  act  stands  good  and  valid  until  the 
infant  interposes  and,  by  giving  notice  to  the  antecedent  par- 
ties, intercepts  the  payment  to  his  indorsee.  10  The  parties  con- 

1  Williamson  v.  Watts,  1  Campb.,  652. 

*  1  Term  R.,  40,  Truman  v.  Hurst ;  Ingledcw  v.  Douglas,  2  Stark.  36. 

'  Cannan  v.  Farmer,  8  Excli.  Rep.,  598;  Williams  v.  Harrison  and  others, 
Garth.  160;  8  Salk.  197. 

4  10  John.  R.,  83;  Hunt  v.  Massey,  5  Bar.  and  Adol.,  902;  3  Nev.  and  M., 
109;  17  Wend.,  419;  8  Wend.,  479;  1  Mete.,  659. 

*  Nightengale  v.  Withington,  15  Mass.,  27± 

*  Van  Winkle  v.  Ketcham,  3  Caines,S28. 
T  Stevens  v.  Jackson,  4  Camp.,  164. 

*  Taylor  v.  Croker.  4  Esp.  R  ,  187. 

*  Where  two  partners  accept  a  bill,  one  of  whom  is  an  infant,  the  holder 
may  sue  the  adult  partner  alone,  and  if  he  plead  non-joinder,  plaintiff  may 
reply  the  infancy  of  his  partner;  but  it  must  appear  that  the  infant  claims  his 
defence  as  such.    4  Taunt.,  468;  Chitty  on  Bills,  20,  200;  15  Mass.,  272. 

**  Story  on  Promissory  Notes,  §  80. 


68  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

tracting  with'  him  assume  all  the  inconveniences  incident  to 
the  protection  which  the  law  allows  him;  and  this  protection  is 
complete  and  ample  against  all  his  liabilities  arising  on  contract. 
On  the  other  hand,  an  infant  may  certainly  sue  on  a  bill  of 
exchange  in  his  favor,  i  But  he  sues  by  his  guardian,  and 
payment  should  accordingly  be  made  to  him.  After  coming 
of.  age,  he  may  bring  an  action  in  his  own  name,  and  there  is 
nothing  to  prevent  his  recovering  on  any  contract  into  which 
he  has  entered  during  his  minority. 

At  common  law,  a  married  woman  has  no  power  to  bind 
herself  by  contract ;  and  hence  her  negotiable  promissory  note 
is  absolutely  void. 2  Indeed,  the  principle  is  well  settled,  that 
a  married  woman  can  in  no  case  be  sued  upon  a  mere  personal 
contract  made  during  the  coverture,  whether  joined  with  her 
husband  or  not,  unless  the  husband  be  civiliter  mortuus,  or 
banished  or  transported. 3  But  where  her  husband  is  legally 
dead,  or  where  he  has  been  absent  and  not  heard  from  for 
seven  years,  so  that  the  law  presumes  him  to  be  dead,  she 
may  make  contracts  that  will  bind  her  at  law.4  In  Massa- 
chusetts the  exception  is  carried  still  further,  and  it  is  held 
that  where  the  husband  was  never  within  the  commonwealth, 
or  has  left  it  and  wholly  renounced  his  marital  rights  and 
duties,  and  deserted  his  wife,  she  may  make  contracts  and  sue 
and  be  sued  in  her  own  name  as  a  feme  sole.5 

There  are  some  English  cases  in  equity,  in  which  it  is 
adjudged  that  a  married  woman  having  a  separate  estate,  is 
chargeable  in  respect  of  it  for  debts  incurred  by  her.  Thus, 
where  a  feme  covert  borrowed  money  on  the  faith  of,  and 
promised  that  it  should  be  repaid  out  of  her  separate  estate, 

1  "Warwick  v.  Bruce,  2  Maule  and  S.,  205;  Teed  v.  Elworth,  14  East,  210; 
6  Taunt.,  118. 

3  Van  Steenburgh  v.  Hoffman,  15  Barb.  S.  C.  R.,  28;  Marshall  v.  Rutter, 
8  T.  R.,  546;  Vance  v.  Wells,  6  Ala.  R.,  637;  Moses  v.  Fogarte,  2  Hill  (S.  C.) 
R.,  835. 

*  2  Saund.,  180.  n.  9. 

4  Lord  Raym.,  147;  1  Bos.  and  Pull.,  358;  2  Campb.,  113,  273.     The  wife 
may  bind  herself  on  a  contract,  where  her  husband  being  an  alien,  was  never 
in  the  country;  so  held  in  England.     3  Campb.  123. 

*  Gregory  v.  Pierce,  4  Mete.  R.,  478;  Gregory  v.  Paul,  15  Mass.,  31. 


PARTIES. 


69 


giving  her  promissory  note  for  the  amount,  and  a  bill  was 
filed  against  herself,  her  husband  and  trustees,  setting  forth 
the  facts,  a  decree  was  made  directing  the  payment  of  the  note 
out  of  the  rents  and  profits  of  her  separate  property.  1  The 
same  decision  was  made  in  a  similar  case,  but  differing  in  this 
respect,  that  she  gave  the  note  jointly  with  her  husband  and 
as  security  for  his  debt.2  Living  separate  from  her  husband 
and  having  a  separate  maintenance,  she  was  held  answerable 
in  the  same  manner  as  the  acceptor  of  a  bill  of  exchange  ;3 
and  that  notwithstanding  the  bill  was  drawn  for  the  benefit  of 
a  third  person.4  But  in  these  cases  her  liability  was  estab- 
lished in  equity,  and  on  considerations  that  did  not  recognise 
her  legal  obligation  as  arising  out  of  the  contract.  On  the 
contrary,  it  was  placed  upon  the  fact  that  the  credit  was  given 
or  the  debt  contracted  on  the  faith  of  her  separate  estate,  to 
be  paid  out  of  it,  and  that  by  the  terms  of  the  settlement  her 
power  of  disposition  and  control  was  not  restrained. 5 

Before  the  Revised  Statutes,  the  doctrine  was  established  in 
this  state,  as  it  is  in  England,  that  where  real  or  personal 
property  is  settled  to  the  separate  use  of  a  married  woman, 
her  power  of  disposition  and  control  is  subject  to  no  other 
limitation  or  restraint  than  such  as  the  terms  of  the  settlement 
directly  and  plainly  impose.  She  might  therefore  charge  it 
with  the  payment  of  debts,  and  when,  with  her  assent,  credit 
was  given  to  her  on  the  faith  of  such  estate,  the  creditor 
acquired  a  lien  which  equity  would  enforce.  But  where, 
under  our  Revised  Statutes,  real  estate  is  settled  to  her  separate 
use,  the  legal  estate  is  not  in  her,  and  she  has  no  power  to 
incur  any  debt  chargeable  on  the  same  or  payable  out  of  the 
rents  and  profits  thereof;  nor  is  she  in  such  a  case  liable  per- 
sonally for  debts,  or  for  counsel  fees  and  services  rendered  in 
defending  the  estate.6 

Bullfln  r.  Clarke,  17  Yes.,  866. 

Hulme  v.  Tenant,  1  Bro.  C.  C.,  16;  9  Yes.,  189,  486;  11  id.  209. 

Stewart  v.  Lord  Kirkwall  et  al.  3  Mad.  387. 

Bingham  v.  Jones,  Chitty  on  Bills,  21. 

Noyes  v.  Blakeman,  8  Sand.  S.  C.  R.,  531.    Mr.  Duer,  J.,   reviews  the 
law  on  the  subject  in  this  case,  holding  the  doctrine  as  settled  in  England,  with 
such  qualifications  as  have  been  made  by  statute,  S.  C.,  2  Selden  R.,  567. 
•  3  Sand.,  S.  C.  R.,  535,  and  the  cases  there  cited;  2  Selden  R.,  567. 


70  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

The  recent  statutes  of  this  state  permitting  a  married  woman 
to  hold  her  property,  real  and  personal,  as  a  separate  estate, 
free  from  the  control  and  disposal  of  her  husband,  as  if  she 
were  a  single  female,  does  not  authorise  her  to  enter  into  con- 
tracts in  the  same  manner  as  if  she  were  unmarried.  1  But 
she  may  convey  the  same  by  deed,  and  her  husband  need  not 
join  with  her  in  executing  it. 2  The  act,  however,  does  not 
in  terms,  abrogate  the  common  law  rule,  that  she  cannot  bind 
herself  by  contract;  and  hence  it  is  held  that,  though  she 
may  make  an  appointment  charging  her  estate,  she  cannot 
enter  into  contracts  binding  upon  her  in  law.3  Even  where 
she  has  a  separate  estate,  it  will  not  be  charged  with  debts 
incurred  by  her,  unless  they  are  incurred  with  that  under- 
standings There  must  be  an  intention  to  charge  her  separate 
estate;  otherwise  the  debt  will  not  affect  it.  If,  however,  she 
joins  with  her  husband  in  giving  a  promissory  note,  even  as 
surety  for  him,  she  thereby  charges  her  separate  estate,  in 
equity,  with  the  payment  thereof;  as  where  the  husband  pur- 
chased chattels  during  the  coverture,  under  an  express  agree- 
ment that  his  wife  should  sign  the  notes  to  be  given  for  them.5 
u  The  fact  that  the  debt  has  been  contracted  by  a  woman 
during  her  coverture,  either  as  a  principal  or  as  a  surety,  for 
herself,  or  for  her  husband,  or  jointly  with  him,  seems  ordi- 
narily to  be  held  prima  facie  evidence  to  charge  her  separate 
estate,  without  any  proof  of  a  positive  agreement  or  intention 
to  do  so."6 

It  is  not  material  whether  a  married  woman  has  a  separate 
estate  in  equity  or  a  separate  estate  in  law,  under  our  recent 
statutes  :  In  either  case  the  estate  can  only  be  reached  by  a 
court  of  equity;  as  a  married  woman,  she  cannot  be  sued  at 

1  See  statutes  of  1848  and  1849. 

9  Blood  v.  Humphrey,  17  Barb..  S.  C.  R.,  660. 

'  Switzer  v.  Valentine,  10  Howard  Pr.  R.,  109;  Dickerman  v.  Abrams,  per 
Harris,  Justice,  21  Barb.  R.,  551;  Willard's  Equity  Jurisprudence,  650,  654; 
Coon  v.  Brook,  21  Barb.  546. 

4  1  Corast.  R.,462. 

6  Yale  v.  Dederer.  21  Barb.  R.,  286,  and  cases  there  cited. 

6  Vanderheyden  y.  Mallory,  1  Comst.  R.,  462.  In  relation  to  a  debt  con- 
tracted before  marriage,  an  actual  intention  to  charge  the  wife's  estate  must  be 
shewn.  See  Van  Allen  v.  Humphrey.  15  Barb.  R.,  555. 


PARTIES.  71 

law.  If  a  building  be  erected  upon  her  separate  estate,  at 
her  request  as  well  as  that  of  her  husband,  and  the  latter  be 
insolvent  so  that  the  builder  can  have  a  remedy  only  against 
the  estate,  the  estate  is  chargeable,  i 

A  married  woman  cannot  bind  herself  by  covenant  during 
coverture,  nor  is  she  estopped  by  her  covenant  from  setting 
up  a  subsequently  acquired  interest  in  lands  conveyed  by  her 
jointly  with  her  husband.  2  To  hold  her  estopped  from 
asserting  her  title  would  be  equivalent  to  holding  her  bound 
by  the  covenant.  Nor  is  a  married  woman  estopped  by  her 
representations  that  she  is  a  feme  sole.3 

At  common  law,  where  a  promissory  note  is  made  to  a  feme 
sole,  and  she  afterwards  marries,  being  possessed  of  the  note, 
the  title  vests  in  the  husband,  and  he  alone  can  indorse  it.4 
And  so,  where  a  note  is  made  payable  to  a  married  woman, 
the  legal  interest  in  it  vests  in  her  husband.j  Such  negotia- 
ble paper,  being  part  of  her  personal  estate,  payable  to  her 
order,  is  in  legal  effect  payable  to  her  husband .6  But  a  feme 
covert  may  make  a  valid  indorsement  of  a  note,  given  to  her 
before  marriage,  by  a  name  different  from  that  of  her  husband, 
if  the  circumstances  of  the  case  be  such  as  to  warrant  the  pre- 
sumption that  the  indorsement  was  made  with  the  assent  of 
the  husband.  And  such  indorsement  will  be  valid,  notwith- 
standing that  by  an  ante-nuptial  contract  she  had  assigned  the 
note  to  a  trustee  for  her  benefit;  the  indorsement  being  made 
with  the  knowledge  and  assent  of  the  trustee.7  The  husband 
may  authorise  his  wife  to  indorse  bills  of  exchange  or  promis- 
sory notes;  and  where  he  permits  her  to  carry  on  business  and 

1  Colvin  v.  Currier,  22  Barb.  R.,  371,  E.  Darwin  Smith,  J.  "  A  tepmralt 
etlate  belonging  to  a  married  woman  should  be  considered  the  separate  estate 
recognized  by  a  court  of  equity,  however  acquired.  A  married  woman  is 
under  the  particular  jurisdiction  of  this  court,  considered  as  a  court  of  equity. 
She  cannot  bo  sued  at  law.  This  court  disregards  the  disability  of  coverture. 
and  treats  her  as  a/<«e  tolt  for  her  benefit;  and  it  allows  her  to  sue  and  be 
sued  as  such,  in  respect  to  her  separate  property." 

Jackson  v.  Vanderheyden,  17  John.  R.,  167;  3  Blackf.,201. 

Canam  v.  Farmer,  3  Ex.  Rep.,  698. 

Conner  v.  Martin,  1  Stra.,  516;  S  Wils.,  5;  Legg  v.  Legg,  9  Mass.,  99. 

Barlow  v.  Bishop,  1  East,  432;  8  Esp.,  266. 

10  Mod.  245;  4  T.  R.  361 ;  2  BDIT.,  1776. 

Miller  T.  Dclamater,  12  Wend.,  433. 


72  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

pass  under  an  assumed  name,  such  an  authority  may  be  pre- 
sumed, i  If  he  permits  her  to  carry  on  business  in  her  own 
name,  and  she  indorses  a  note  made  payable  to  her  in  the 
course  of  her  business,  using  the  name  of  ter  husband,  it 
seems  the  circumstances  may  be  left  to  the  jury  to  presume 
or  infer  an  authority  from  him  to  indorse. 2  So,  where  she 
drew  a  bill  of  exchange  payable  to  her  own  order,  and  indorsed 
it  with  the  assent  of  her  husband,  it  was  held  that  this  indorse- 
ment carried  the  title  to  her  indorsee,  so  as  to  enable  him  to 
recover  thereon  against  the  acceptor. 3  But  where  no  autho- 
rity is  shown,  her  act  is  a  nullity,  and  her  indorsement  trans- 
fers no  property  in  the  bill  or  note.4  Unless  she  acts  as  the 
agent  of  her  husband,  her  act  will  not  bind  him;  and  if 
authorised  to  give  a  note  in  his  name,  she  cannot  give  one  in 
her  own  name  so  as  to  bind  him. 5 

A  promissory  note  is  not  a  personal  chattel  in  possession, 
but  a  chose  in  action;  and  the  common  law  rule  is  that  when 
a  chose  in  action,  such  as  a  bond  or  note,  is  given  to  a  feme 
covert,  the  husband  may  elect  to  let  his  wife  have  the  benefit 
of  it,  or  he  may  take  it  himself  and  reduce  it  into  possession 
at  any  time  during  the  coverture. 6  But  if  he  omit  to  do  this, 
it  will  survive  to  her  after  the  death  of  her  husband.  Being 
negotiable,  he  may  reduce  it  into  possession  by  indorsing  and 
transfering  it;  not  being  negotiable,  he  must  reduce  it  into 
possession  by  a  suit  at  law,  like  any  other  thing  in  action.  If 
he  omits  to  do  this,  and  he  survives  her,  the  action  must  be 
brought  in  the  name  of  her  personal  representatives.7 

Mien  Enemies. — A  state  of  war  operates  to  suspend  and 
interdict  all  intercourse  and  correspondence  with  the  enemy; 
it  prohibits  all  commerce  and  contracts  between  the  citizens 
and  subjects  of  the  belligerent  nations,  and  renders  them 

1  Coles  r.  Davis,  1  Campb.  485. 

*  1  East,  432. 

*  Prestwick  v.  Marshall,  5  Car.  and  P.,  594;  4  M.  and  P.,  513. 
4  Savage  v.  King,  17  Maine,  301. 

*  Minard  v.  Mead,  7  Wend.  R.,  68. 

*  Galers  v.  Maderley,  6  Mees.  and  Welsh.  R..  422;  Richards  v.  Richards, 
Barn,  and  Adol  ,  447;  Belts  v.  Kimpton,  2  id.  273. 

*  6  Mees.  and  Welsh.  R.,  422. 


PARTIES. 


73 


unlawful  and  void.  The  theory  is  that  every  man  is  a  party 
to  the  acts  of  his  own  government :  and  when  one  govern- 
ment declares  or  enters  upon  war  against  another,  the  two 
nations  become  enemies,  and  all  the  subjects  of  the  one  are 
enemies  to  all  the  subjects  of  the  other.  Formerly,  when  it 
was  customary  to  announce  the  beginning  of  a  war  by  an  open 
declaration,  it  was  common  to  include  in  it,  by  way*  of  moni- 
tion to  the  subject,  a  clause  prohibiting  all  correspondence  and 
commerce  with  the  enemy.  But  this  prohibition  was  only 
declaratory  of  the  laws  of  war,  and  by  no  means  necessary 
to  render  unlawful  all  trade  between  the  subjects  of  the 
parties  at  war.i 

Hence,  contracts  made  with  an  enemy  are  void :  and  con- 
tracts entered  into  between  subjects  of  the  belligerent  parties 
before  the  war  began,  are  suspended  in  their  operation  until 
the  restoration  of  peace. 2  The  effect  of  the  law  is  to  bind  up 
the  interests  of  every  individual  in  those  of  his  nation,  and 
thus  constrain  every  part  of  the  state  to  lend  its  utmost  energy 
in  support  of  the  common  cause,  and  withdraw  from  the 
enemy  every  aid  and  assistance.  And  certainly  nothing  can 
be  more  reasonable;  for  it  is  impossible  that  a  part  of  the 
people  should  claim  to  be  at  peace  while  the  residue  are 
involved  in  the  calamities  of  war.  3 

It  follows  as  a  consequence  of  what  has  been  said,  that 
debts  due  to  an  enemy,  though  contracted  prior  to  the  break- 
ing out  of  hostilities,  cannot  be  collected  nor  lawfully  paid 
pending  the  war;  and  that  bills  of  exchange  used  for  the 
remittance  of  money  from  one  country  to  the  other,  between 
the  subjects  of  the  belligerent  parties,  are  void.  4  And  the 
rule  applies,  not  only  to  citizens  and  native  born  subjects,  but 

1  Griswold  v.  Waddington,  15  John.  R.  57;  same  case,  16  John.  R.,  438,  and 
the  coses  and* authorities  there  cited  by  Chancellor  Kent. 

»  East  India  Co.  v.  Sandys,  2  Show.,  868;  Gist  v.  Mason,  1  Term  R.  84; 
Potts  y.  Bell,  8  Term  R..  584;  Brandon  v.  Nesbit,  6  Term  R.,  28, 35;  Furtado 
T.  Rogers,  3  Bos.  and  Pull,  191 ;  ex  parte  Boussmaker,  18  Vesey,  71;  Antoino 
v.  Morahead.  6  Taunt.,  287;  7  id.,  439. 

1  The  Julia,  8  Cranch,  181. 

4  Hoare  r.  Allen,  2  Dall.,  102;  16  John.  R.,  484. 

3 


74  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

to  all  persons  voluntarily  domiciled  in  either  country,  i  But 
where  two  British  subjects  were  detained  prisoners  in  France, 
and  one  of  them  drew  a  bill  in  favor  of  the  other  on  a  third 
British  subject,  resident  in  England,  and  such  payee  indorsed 
the  same  in  France  to  an  alien  enemy,  it  was  decided  that  the 
alien's  right  of  action  was  only  suspended  during  the  war,  so 
that  on  the  return  of  peace  he  might  recover  the  amount 
from  the  acceptor;  and  the  decision  was  placed  on  the  ground 
that  otherwise  such  persons  would  sustain  greater  privations 
during  their  detention. 2 

The  place  of  the  transaction  does  not  make  it  illegal ;  the 
material  question  is,  whether  it  renders  assistance  to  an  alien 
enemy  in  the  time  of  war.  Thus,  it  is  held  in  England  that 
an  action  may  be  sustained  there  by  a  neutral  on  a  promissory 
note  given  to  him  by  a  British  subject  in  an  enemy's  country 
for  goods  sold  there.  3  If  the  contract  be  in  favor  or  for  the 
benefit  of  an  alien  enemy  not  domiciled  in  the  country,  it  is 
void  both  at  law  and  in  equity  :  but  it  is  not  void  where  it  is 
made  for  the  benefit  of  a  neutral;  and  it  seems  that  although 
a  bill  be  drawn  by  an  alien  enemy,  it  may  be  valid  in  the 
hands  of  a  neutral  who  received  the  same  without  any  previ- 
ous understanding  or  knowledge  of  any  intended  illegal  use 
to  be  made  of  it.  4  So,  doubtless  a  bill  drawn  for  the  pay- 
ment of  ransom  money  is  legal  and  valid,  though  payable  to 
an  alien  enemy;  for  this  is  such  a  contract  as  the  laws  of  war 
permit,  and  it  stands  on  the  same  principle  as  a  convention 
for  the  exchange  of  prisoners.  5  In  like  manner  bills  of  ex- 
change, and  promissory  notes  drawn  or  made  for  repairs  done 
to  a  cartel  ship,  used  for  the  transmission  of  propositions  to 
an  enemy  or  for  carrying  into  eflect  such  agreements  as  are 

1  M'Connel  v.  Hector,  3  Bos.  and  P.,  113;  6  Rob.  Adm.  R.,  90;  1  Campb., 
482;  Roberts  v.  Hardy,  3  Maule  and  S.,  533. 
1  Antoine  v.  Morshead,  6  Taunt.,  237;  6  id.  382. 

*  Honriet  v.  Morris,  3  Campb.,  803;  Cowp.  163. 
4  Story  on  Bills,  §  103,  104. 

*  16  John  R.,  438;  Conne  v.  Blackburne,  2  Doug.  R.,  641;  id.  649;  Tates 
v.  Hall,  1  Term  R.,  78. 


PARTIES. 


75 


frequently  entered  into  between  states  at  war,  are  latvful  and 
binding  upon  the  parties  to  them.i 

Corporations  and  associations  organized  under  the  general 
banking  law,  can  only  exercise  the  powers  and  carry  on  the 
business  which  the  statute  under  which  they  are  created  has 
authorised  them  to  exercise  and  carry  on,  either  in  terms  or 
by  necessary  implication.  They  are  not  like  natural  persons, 
in  respect  to  whom  the  presumption  is,  that  they  have  the 
right  to  carry  on  all  business  and  perform  any  act  which  the 
law  does  not  expressly  prohibit.  Being  creations  of  the  state, 
organized  for  specified  objects,  they  are  held  to  acquire  cer- 
tain rights  as  incidental  to  the  general  powers  conferred  on 
them  by  statute  ;  and  these  incidents  are  to  be  ascertained  by 
considering  the  policy  of  the  state  in  their  creation,  and  the 
general  law  controling  and  regulating  the  business  in  which 
they  are  engaged.  2  Though  they  can  do  no  act  which  they 
are  expressly  prohibited  from  doing,  they  may  do  many  acts 
which  they  are  not  in  terms  authorised  to  perform.  Thus,  a 
corporation  authorised  by  its  charter  to  employ  its  stock  solely 
in  advancing  money  upon  goods  and  in  the  sale  thereof  upon 
commission,  may  lawfully  accept  bills  drawn  on  account  of 
future  consignments  or  deposits  of  goods.  The  acceptance  of  a 
bill  is  an  engagement  to  pay  money,  and  the  company  or  corpo- 
rate body  may  agree  to  pay  or  advance  money,  at  a  future  day, 
and  they  may  engage  to  do  this  by  the  acceptance  of  a  bill.  3 

It  is  not  material  whether  a  prohibition  is  incorporated 
into  the  charter  of  a  body  corporate,  or  embodied  in  a  general 
law  to  which  it  is  subject.  In  this  state  the  business  of  bank- 
ing is  now  regulated  by  a  general  statute  ;  and  banking  asso- 
ciations are  prohibited  by  law  from  issuing  or  putting  in 
circulation  any  bill  or  note,  unless  the  same  is  payable  on 

1  8  Term  R.,  648;  Story  on  Notes,  §  97;  Story  on  Bills,  §  102.  The  lan- 
guage used  by  Mr.  Justice  Story,  is  the  same  in  both  of  these  works,  with 
slight  modifications. 

*  Saffbrd  v.  Wykoff,  1  Hill  R.,  11;  4  id.  442;  Mechanics'  Bank  T.  Bank  of 
Columbia,  5  Wheat.  R.,  826;  Tracy  v.  Tallmage,  18  Barb.  R.,  456. 

'  Munn  v.  Commission  Co.,  15  John.  R.,  44.  No  seal  is  required  in  the  exe- 
cution of  such  an  act ;  an  agent  may  do  it. 


76  BILLS  OF   EXCHANGE  AND   PROMISSORY  NOTES. 

demand  »and  without  interest ;  i  and  it  is  adjudged  that  this 
prohibition  is  not  confined  to  bills  and  notes  capable  of  circu-. 
lation  as  money.  2  Consequently,  our  banking  associations, 
organized  under  the  general  law,  cannot  issue  negotiable 
promissory  notes,  payable  at  a  future  day  with  interest;  nor 
are  such  notes  valid,  though  given  on  account  of  a  previous 
liability.  3  The  intention  with  which  such  notes  are  made, 
does  not  relieve  them  from  the  interdict  under  which  they 
are  placed  ;  though  it  is  no  doubt  true  that  the  design  of  the 
state  is  to  prevent  such  paper  from  being  issued  and  circulated 
as  money.  4 

The  law  confers  the  capacity  to  contract,  and  regulates  the 
transaction  of  the  business.  Any  departure  from  the  sphere 
of  business  prescribed~to  them,  is  unlawful,  and  their  engage- 
ments made  in  the  prosecution  of  an  unlawful  business,  are 
void.  In  short,  banking  associations  in  this  state  possess  only 
authority  to  carry  on  the  business  of  banking  in  the  manner 
and  with  the  powers  specified  in  the  statutes;  they  have  no 
power,  for  example,  to  purchase  state  or  other  stocks  for  the 
purpose  of  selling  them  for  profit,  or  as  a  means  of  raising 
money,  except  when  such  stocks  have  been  received  in  good 
faith,  and  as  security  for  a  loan  made  by,  or  a  debt  due  to  such 
association,  or  when  taken  in  payment,  in  whole  or  in  part  of 
such  loan  or  debt.  5  And  therefore  promissory  notes,  payable 
at  a  future  day,  given  on  the  purchase  of  state  stocks,  and 
made  for  the  purpose  of  raising  money,  are  void  for  two  rea- 
sons; first,  because  they  are  payable  at  a  future  time,  and 
second,  because  the  act  is  a  departure  from  the  legitimate 
business  of  banking. 

In  the  absence  of  any  prohibitory  statute,  a  corporation  may 
give  a  promissory  note  for  a  debt  contracted  in  the  course  of 

1  Statutes  of  1840.  p.  306. 

*  Leavitt  v.  Palmer,  3  Comst.  R.,  19. 

'  3  Comst.  R.,  19;  Swift  v.  Beers,  3  Denio  R.,  70;  Tyler  v.  Yates,  8  Barb. 
S.  C.  R.,  222;  Root  v.  Goddard,  3  McLean,  102,  276;  Ontario  Bankv.  Scher- 
merhorn,  10  Paige,  113;  18  Barb.  R.,  456. 

4  IHillR..  11;  4  id.  442;  3  Comst.  R.,  33. 

*  Talmage  v.  Pell,  8  Selden  R.,328;  id.  364;  Tbe  Bank  Commissioners  T. 
St.  Lawrence  Bank,  3  id.  513. 


PARTIES.  77 

its  legitimate  business,  though  not  specially  authorised  to  dp 
so  by  statute,  i  When  there  is  nothing  on  the  face  of  the  note 
or  bill  to  show  that  it  was  issued  contrary  to  law,  or  upon  an 
illegal  consideration,  or  to  raise  a  suspicion  that  it  was  drawn 
for  an  illegal  purpose,  the  presumption  is  that  it  was  given  for 
a  lawful  purpose.  2  On  the  other  hand,  when  it  appears  upon 
the  face  of  the  instrument  that  it  was  issued  contrary  to  law, 
or  where  there  is  sufficient  to  create  a  suspicion  of  its  illegality 
and  to  put  the  party  who  takes  it  upon  enquiry,  he  is  not  a 
bona  fide  holder,  and  cannot  recover  on  it  as  such.  3 

In  England,  as  in  this  country,  banking  business  is  regulated 
by  statute,  and  various  restrictions  in  favor  of  the  Bank  of 
England  and  the  East  India  company,  are  imposed  with  respect 
to  the  description  of  bills  and  notes  which  corporations  and 
associations  in  the  nature  of  banks  may  make,  accept  and 
negotiate;  such  as  those  payable  on  demand  or  within  a  brief 
period  and  circulated  as  cash.  But  it  is  agreed  that  these  pro- 
hibitory acts  do  not  prevent  corporations  and  companies  from 
making  promissory  notes  and  accepting  bills  of  exchange  in 
the  payment  of  debts  and  liabilities  incurred  in  their  legiti- 
mate business.  4  And  it  deserves  to  be  remarked  that  corpo- 
rations are  mentioned  in  the  statute  of  Anne,  as  persons  who 
may  make  and  indorse  notes,  and  have  the  like  remedy  in  the 
collection  thereof  which  is  given  to  other  persons.") 

The  result  of  the  authorities  seems  to  be,  that  corporations 
carrying  on  business  under  no  restraining  act  may  make 
promissory  notes  and  draw  bills  of  exchange,  where  these  are 
the  usual  and  proper  means  to  accomplish  the  purposes  of 
their  organization;  that  such  notes  and  bills  are  to  be  pre- 
sumed legal  and  valid,  where  they  are  not  prohibited  by  law, 

1  Barker  v.  Mechanic's  IDS.  Co.,  3  Wend.,  94;  Mott  r.  Hicks.  1  Cowen  R., 
613. 

•8  Wend.  R.,  94;  4  Hill  R.,  444,  445;  6  Wend.  R.,616. 

•4  Broughton  v.  The  Manchester  Water  Works  Co.,  8  Barn,  and  Aid.,  1; 
Wiggin  T.  Bush,  12  John.  R.,  806. 

4  Wigan  v.  Fowler,  1  Stark.  R.,  459;  Harvey  T.  Kay,  9  B.  and  C.,  301;  3 
Barn  and  Aid,  R.,  1. 

*  See  a  collection  of  English  statutes  on  the  subject,  in  the  appendix  to 
Byles'  Work  on  Bills. 


78  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

and  are  received  in  good  faith ;  and  that  they  are  invalid  when 
given  in  violation  of  law,  or  when  given  for  purposes  wholly 
foreign  to  those  for  which  the  corporation  was  created,  i 

A  negotiable  promissory  note  imports  a  consideration,  and  it 
is  unnecessary  to  state  any  in  pleading,  or  to  prove  any  upon  the 
trial  in  the  first  instance.  When  given  by  an  executor  or  admin- 
istrator, it  is  prima  facie  evidence  of  assets,  because  they  are 
the  legal  consideration  upon  which  such  a  promise  ought  to 
be,  and  is  presumed  to  be  founded.  It  is  but  prima  facie 
evidence,  however,  between  the  original  parties,  and  the  de- 
fendant may  shew  that  in  fact  there  was  a  deficiency  of 
assets,  and  of  course  no  consideration  to  support  the  note. 
The  onus  probandi  in  such  a  case  rests  on  him.  2 

But  if  an  executor  or  administrator  make  a  negotiable 
promissory  note,  or  accept  a  bill  of  exchange,  and  the  same  be 
transfered  before  it  becomes  due,  he  is  held  to  a  personal  lia- 
bility thereon ;  because  here  he  makes  a  positive  promise  to 
pay,  and  executes  it  in  the  form  of  a  negotiable  instrument.3 
Acting  en  autre  droit  and  having  no  power  in  that  manner  to 
bind  the  estate  of  the  deceased,  his  unqualified  promise  to  pay 
is  held  to  bind  him  to  a  personal  responsibility;  especially 
where  the  promise  is  made  in  a  form  that  imports  or  implies  a 
sufficient  consideration.  He  does  not  it  seems  limit  his  liability 
by  describing  himself  as  executor,  unless  he  expressly  confine 
his  stipulation  to  pay  out  of  the  estate.  4  And  where  he  does 
that,  the  instrument  is  no  longer  negotiable  as  a  bill  or  promis- 
sory note. 

The  rule  is  the  same  in  respect  to  trustees  and  guardians, 
who  act  as  agents  of  the  estate  or  fund  intrusted  to  them. 
Thus,  where  one  executed  a  negotiable  note  as  guardian  of  an 

1  Pitman  v.  Kintner,  5  Blackf.,  250;  7  Ohio,  31;  1  B.  Munroe,  14;  15  John. 
R.,  44;  Attorney  General  v.  Life  and  Fire  Ins.  Co.,  9  Paige,  470;  2  Hill,  265; 
9  Ohio  R.,  291;  10  Gill  and  John.,  299;  3  Wend.  R.,  94.  In  what  cases  the 
bona  fide  holder  may  recover  on  them,  will  be  considered  hereafter. 

"  Bank  of  Troy  v.  Topping,  13  Wend.  R.,  657. 

*  9  Wend.  R.,  273 ;  13  id.,  557. 

4  Child  v.  Monins,  2  B.  and  B.,  460;  King  v.  Thorn,  1  Term  R.,  489;  Serle 
v.  Waterworth  4  Mees.  and  Wels.,  9. 


PARTIES.  79 

insane  person,  but  did  not  restrict  his  promise  to  pay  out  of 
the  estate  intrusted  to  him,  he  was  adjudged  liable  in  his  indi- 
vidual capacity,  i  And  it  was  so  held  in  a  similar  case  where 
the  note  was  not  negotiable,  it  appearing  that  the  payee  had 
relinquished  a  valuable  right  in  consideration  for  the  note.  2 
But  it  deserves  to  be  mentioned  that  the  courts  of  Massachu- 
setts have  frequently  held  that  the  giving  of  a  negotiable 
promissory  note  for  a  simple  contract  debt  is  to  be  deemed  a 
payment,  as  if  the  same  had  been  made  in  cash;  3  which  is 
contrary  to  the  doctrine  of  the  common  law,  as  generally  held 
in  the  American  courts.  4  In  this  state  the  giving  of  a  note  is 
not  payment,  and  consequently  as  between  the  original  parties 
the  consideration  may  be  inquired  into,  and  where  that  fails 
no  recovery  can  be  had  on  a  note  executed  by  a  trustee  or 
administrator  :  the  effect  of  his  giving  a  promissory  note  in  his 
representative  character,  which  is  not  negotiable  or  not  trans- 
fered,  is  to  cast  upon  him  the  burden  of  shewing  that  he  has 
no  funds  out  of  which  to  pay.  5  If  such  a  note  shews  on  its 
face  that  it  is  made  for  value  received  by  the  heirs  of  the 
intestate,  it  does  not  raise  even  a  presumption  against  the 
administrator.  6  But  where  the  note  is  negotiable,  and  con- 
tains an  unqualified  promise  to  pay,  though  signed  with  the 
addition  of  the  words  "  as  administrator,"  the  note  will  be 
valid  in  the  hands  of  a  bona  fide  holder.  Such  words  are 
merely  descriptive  of  the  person,  and  do  not  limit  the  maker's 
liability  on  the  note.7 

It  appears  to  be  well  settled,  that  if  a  man  appoint  several 
executors,  they  are  esteemed  in  law  but  one  person  represent- 
ing the  testator;  and  that  acts  done  by  one  of  them  which 
relate  to  the  delivery,  sale  or  release  of  the  testator's  goods,  are 

1  Thatcher  r.  Dinsmore,  6  Mass.  R.,  290. 

*  Forster  T.  Fuller,  6  Mass.  R.,  68. 

*  Manely  v.  Magee,  6  Masa.  R..  145;  7  Mass.  R.,  43;  11  Masa.  R.  362;  4 
Pick.,  229. 

«  Pintard  v.  Tackington,  10  John.  R.,  104;  5  Id.  68;  8  id.  304;  9  id.  310;  6 
Cranch,  253;  17  John.  R.,  840;  8  Serg.  and  Rawle,  288. 
»  9  Wend.  R.,  273. 

*  Ten  Eyck  v.  Vanderpoel,  8  John.  R.,  121. 

1  2Brod.andBing.R.,  460 ;1  Term  R.  487.    Inthi«8tate,*quere,  9  Barb.,  528. 


80  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

deemed  the  acts  of  all.  Thus,  one  of  two  executors  may 
assign  a  note  belonging  to  the  estate  of  their  testator  as  col- 
lateral security  for  the  payment  of  a  judgment  recovered 
against  the  estate;  a  term  of  years  passes  by  the  assignment 
of  one;  and  if  one  of  them  releases  a  debt,  it  is  good,  and 
binds  the  other,  i  And  this  rule  applies  as  well  to  securities 
given  to  executors  as  such  after  the  death  of  their  testator,  as 
to  those  given  to  him  in  his  life-time,  provided  the  money, 
when  recovered,  would  be  assets.  2  Where  however,  a  note 
is  made  payable  to  two  executors  as  such,  an  indorsement  by 
one  is  not  sufficient.  3  If  made  payable  to  the  deceased,  either 
of  them  may  indorse  and  transfer  it;  and  if  he  indorse  it 
without  qualification,  he  becomes  chargeable  thereon  like  any 
other  indorser.  4 

In  like  manner,  it  is  a  general  rule,  that  those  who  make 
promissory  notes  or  accept  bills  of  exchange  in  a  special 
character,  are  liable  personally,  whenever  they  fail  to  bind 
the  persons  for  whom  they  assume  to  act.  5  If  a  person  as- 
sume to  act  as  agent,  without  disclosing  the  name  of  his 
principal,  and  makes  a  purchase  of  goods  and  accepts  a  bill 
of  exchange  therefor,  signing  it  in  his  own  name  with  the 
simple  addition  of  the  word  "  agent "  to  his  name,  he  makes 
himself  personally  liable.  6  If  he  intends  to  act  really  as  an 
agent,  he  must  either  sign  the  name  of  the  principal  to  the 
bill,  or  it  must  appear  on  the  face  of  the  bill  itself,  in  some 
way,  that  it  was  in  fact  drawn  for  him,  or  the  principal  will 
not  be  bound. 

No  person  in  making  a  contract  is  considered  to  be  the 
agent  of  another,  unless  he  stipulates  for  his  principal  by 
name,  stating  his  agency  in  the  instrument  which  he  signs  ; 

I  Wheeler  v.  Wheeler,  9  Cowen  R.,  34. 

II  Bogert  v.  Hertell,  4  Hill  R.,  492. 

*  Smith  v.  Whiting,  9  Mass.  R.,  334. 

4  Rawlinson  v.  Stone,  8  Wils.,  1;  2  Stra.,  1260. 

6  Pentz  v.  Stanton,  10  Wend.  R.,  271 ;  White  v.  Skinner,  13  John.  R.,  307; 
1  Cow.,  636;  9  Barb.  R.,  528;  12  id.  27,  54. 
•5  Taunt.,  749;  5  East,  148;  1  Bos.  and  Pull.,  368;  1  Term  R.,  181. 


PARTIES.  81 

the  precise  form  of  execution  is  not  material,  provided  it  be 
substantially  done  in  the  name  of  the  principal,  i 

The  rule  is  not  as  strict  with  reference  to  negotiable  paper 
as  it  is  when  applied  to  sealed  instruments  ;   but  there  is  a 
strong  analogy  between  them.     And  it  is  adjudged   that  a 
charter  party  purporting  to  be  made  between  the  master  of  a 
vessel  of  the  first  part,  "  and  M.  P.  (agent  for  S.  C.  &  M.  S.) 
of  the  second  part,"  and  signed  and  sealed  by  the  master  and 
by  M.  P.,  with  the  addition  of  "agent"  is  the  deed  of  the 
party  signing  it.  2    As  to  promissory  notes  and  bills,  the  rule 
is  clearly  much  less  stringent;  for  it  was  held  in  this  state 
many  years  ago,  that  where  the  agent  of  a  manufacturing 
company  indorsed  a  note,  signed  by  its  president,  adding  to 
his  name  the  word  "  agent "  and  the  note  was  indorsed  to  a 
person  acquainted  with  his  relation  to  the  company,  he  did 
not  become  personally  liable  thereon.3     And  the  rule  has 
been  recently  confirmed  by  the  judgment  of  the  court   of 
appeals,  announced  in  these  terms :  4  "  The  indorsement  of  a 
promissory  note  or  bill  of  exchange  effects  two  different  and 
distinct  purposes.     It  is  a  present  transfer  and  assignment  of 
the  paper  to  the  indorsee,  and  an  executory  contract  by  which 
the  indorser  agrees,  upon  certain  conditions,  to  pay  the  amount 
of  the  note  or  bill  himself.     There  can  be  no  regular  indorse- 
ment which  does  not  ipso  facto  transfer  the  paper  ;  but  it  is 
not  absolutely  essential  that  it  should'  also  contain  the  col- 
lateral contract.3    The  defendant  in  this  case  indorsed  the 
note  in  question  by  writing  his  name  upon  it,  and  adding  the 

1  Rathbun  v.  Endlong,  15  John.  R.f  1;  1  East,  434;  2  id.  142;  8  Esp.,  266; 
2  Strange,  705;  1  Campb.,  485;  6  Term  R.,  176;  Stackpole  v.  Arnold,  11 
Masa.  R.,  27;  12  id.  173.  So  where  a  party  describes  himself  in  a  covenant  as 
agent,  but  in  reality  signs  the  contract  in  his  own  name,  he  renders  himself 
personally  liable.  1  Cowen  R.,  513;  9  John.  R.,  334. 

'  Platt  v.  Cottrell,  8  Denio,  604. 

•Mott  v.  Hicks,  1  Cowen  R.,  618. 

4  Babcock  v.  Beman,  1  Kernan  R.,  200.  The  note  in  question  was  drawn  in 
these  words:  Four  months  after  date  we  promise  to  pay  to  the  order  of  R. 
Beman,  Treat.,  five  hundred  dollars,  value  received.  Signed  Adam  Smith 
&  Co.,  and  indorsed  "  R.  Beman,  Treasurer,"  he  being  known  to  the  indorsee 
as  the  agent  of  a  manufacturing  company.  12  Barb.,  27. 

*  Rice  v.  Stearns,  3  Mass.  R.,  225. 


82  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

word  treasurer,  and  the  note  itself  was  payable  to  him  with 
the  addition  of  the  usual  abbreviation  of  the  same  word. 
The  answer  shows  that  the  defendant  when  he  made  the 
indorsement  was  the  treasurer  of  a  manufacturing  corpora- 
tion, and  that  this  was  known  to  the  plaintiffs,  who  received 
the  note  thus  indorsed  on  account  of  a  demand  which  they 
had  against  the  corporation.  The  question  is  whether  this 
was  a  qualified  indorsement,  passing,  as  it  clearly  did,  the 
interest  in  the  note,  but  without  any  other  contract  on  the 
part  of  the  defendant.  This  question  was  decided  against  the 
plaintiff  in  the  supreme  court  more  than  thirty  years  ago,  and 
has  since  been  acquiesced  in  by  the  profession,  and  has  been 
extensively  acted  on  by  business  men." 

The  reasoning  of  the  court  assumes  that  in  the  hands  of  a 
bona  fide  holder  who  took  the  same  without  notice  of  the 
relation  in  which  the  indorser  stood  to  the  company  for  whom 
he  acted  as  agent,  the  note  would  be  valid  as  against  the 
indorser;  and  this  corresponds  with  other  authorities  that 
hold  the  question  of  agency,  in  such  cases,  material  and  issu- 
able,  and  also  the  fact  that  the  party  taking  the  note  received 
it  with  notice,  i  So,  it  has  been  held  that  an  indorsement  of 
a  note  to  the  cashier  of  a  moneyed  corporation,  by  adding  the 
word  cashier  to  his  name  in  the  indorsement,  is  a  transfer  to 
the  corporation,  where  that  was  the  design,  of  the  transaction 
as  shown  by  the  pleadings  and  proof.  2 

There  is  some  conflict  in  the  authorities  on  the  subject,  and 
it  is  not  easy  to  deduce  from  them  a  rule  applicable  in  all 
cases.  Between  the.  original  parties  to  a  note  or  bill  of  ex- 
change the  facts  may  be  enquired  into,  and  the  general  prin- 
ciple applies,  that  an  agent  is  not  liable  to  be  sued  upon 
contracts  made  by  him  on  behalf  of  his  principal,  if  the  name 
of  his  principal  is  disclosed  and  made  known  to  the  person 

1  Brockway  v.  Allen,  17  Wend.  R.,  40;  Randall  v.  Van  Yechten,  19  John. 
R.,  60;  Taft  v.  Brewster,  9  id.  334;  White  v.  Skinner,  13  John.  R.,  307. 

*  The  Watervliet  Bank  v.  White,  1  Denio  R.,  608.  The  indorsement  in  this 
case  was  in  these  words:  "  Pay  to  E.  O.,  Cashier,  or  order,"  held  a  transfer  to 
the  bank  of  which  E .  O.  was  the  cashier. 


PARTIES.  83 

contracted  with,  at  the  time  of  entering  into  the  contract. i 
But  as  between  the  makers  or  indorsers  of  promissory  notes, 
or  the  parties  to  a  bill  of  exchange  and  the  bona  fide  holder 
who  has  received  the  same  in  the  usual  course  of  business,  it 
is  necessary  that  the  instrument  shew  on  its  face  by  whom  it 
was  legally  made;  otherwise  it  will  bind  the  parties  executing 
it  to  a  personal  responsibility.  2  In  England  the  addition  of 
the  word  cashier  in  the  body  of  the  bill  does  not  relieve  the 
acceptor  from  personal  liability;  it  is  necessary  that  he  should 
state  on  the  face  of  the  bill  that  he  accepts  it  for  another.3 

When  a  person  has  authority,  as  agent,  to  draw,  accept  or 
indorse  a  bill  for  another,  he  should  do  it  in  such  a  manner 
as  to  shew  that  it  is  the  act  of  his  principal ;  as  by  signing  it 
A.  B.,  by  C.  D.,  his  agent.  4  The  most  explicit  and  regular 
course  is  to  sign  the  name  of  the  principal  first  and  then 
immediately  under  it  add  pe'  procuration  C.  D.,  preceding 
his  own  name  with  words  that  express  the  fact  that  he  signs 
for  another.  5  In  other  words,  he  should  sign  so  that  it  will 
appear  to  be  the  act  of  his  principal  through  his  ministry. 

1  Rathbun  v.  Endlong,  15  John.  R.,  1;  Ovren  T.  Gooch,  2  Esp.  R.,  567;  17 
Wend.  R.,  40,  and  the  cases  there  cited;  1  Kernan  R.,  200;  1  Denfo,  608. 

*  Hills  v.  Bannister,  8  Cowen  R.,  81 ;  10  Wend.  R.,  271 ;  Leadbitter  T.  Farrow, 
6  M.  and  Sel.,  845;  7  Taunt.,  160;  2  Stra.,  955;  9  Barb.,  528. 

1  Byles  on  Bills,  26,  and  the  cases  there  cited. 
4  Thomas  v.  Bishop,  2  Stra.,  956. 

•  Chitty  on  Bills,  33. 

As  illustration;  a  note  given  "for"  another  whose  name  is  disclosed,  and 
signed  with  the  addition  of  the  word  "  agent  "  binds  the  party  for  whom  it  is 
given.  15  John.  R.,  1.  A  note  in  these  words:  "For  value  received  I 
promise  to  pay  Mr.  Edward  J.  Long,  or  order,  on  demand,  three  hundred  and 
one  dollars,  with  interest  after  four  months;  signed' Pro.  William  Gill, — J.  S. 
Colburn,"— is  the  noteof  Gill.  11  Mass.  R..  "7. 

A  note  in  this  form.-  "  The  President  and  Directors  of  the  Woodstock  Glass 
Company,  promise  to  pay,  &c.,  signed  W..H.,  President,'7  is  the  note  of  the 
Company.  1  Cowen,  516. 

But  a  note  in  this  form  :  "  I,  John  Franklin,  President  of  the  Mechanics' 
Fire  Insurance  Company,  promise,  &c.,"  is  the  note  of  Franklin,  and  not  that 
of  the  Co.;  8  Wend.  R.,94.  So  a  note  signed  by  two  persons  with  the  addition, 
"  Trustees  of  Union  Religious  Society,  Phelps,"  is  the  individual  note  of  tho 
persons  subscribing  it.  The  addition  is  mere  dtscriptio  pertonarum ;  8  Cowen, 
81.  The  addition  of  the  word  "  agent,"  no  principal  being  mentioned,  doe» 
not  prevent  the  note  from  being  treated  as  that  of  the  person  signing  it.  10 
Wend.,  271 ;  but  see  9  Barb.,  528;  12  id.  27. 


84  BILLS  OF   EXCHANGE  AND    PROMISSORY    NOTES. 

A  special  authority  to  sign  another  man's  name  to  a  note, 
specifying  the  amount  for  which  it  is  to  be  given,  and  the  time 
when  it  is  to  become  payable,  must  be  strictly  pursued,  or  it 
will  not  bind  the  person  giving  it;  thus,  if  it  be  to  sign  a  note 
payable  in  six  months,  it  will  be  void  if  made  payable  in  sixty 
days,  i  The  distinction  between  a  general  and  a  particular 
agent  is  very  broadly  marked.  A  general  agent,  as  a  factor 
for  a  merchant  residing  abroad,  binds  his  principal  by  his 
acts;  but  an  agent  constituted  for  &  particular  purpose,  and 

1  Batly  v.  Carswell,  2  John,  R.,  48.  The  agent  must  always  follow  his 
authority,  6  John.  R.,  58, 

A  note  in  this  form,  "  I  the  subscriber,  Treasurer  of  the  Dorchester  Turn- 
pike Corporation,"  signed,  "  G.  L.  C.,  Treasurer,"  is  not  his  individual  note. 
9  Mass.,  335. 

So,  a  note  in  this  form:  "  I  promise  to  pay  for  the  Providence  Hat  Manufac- 
turing Company,"  is  the  note  of  the  company,  12  Mass.,  237. 

A  note  signed  with  this  addition  to  the  name  of  the  person  subscribing  it, 
"  agent  "for  D.  P."  is  the  note  of  D.  P,,  if  the  person  signing  was  properly 
authorised.  16  Mass.,  461. 

So,  a  note  beginning  "'we  jointly  and  severally  promise  to  pay,"  and  signed 
"  Patten  and  Johnson,  for  Ira  Gove,"  is  the  note  of  Gove,  it  being  shewn  that 
P.  and  G.  were  authorised  to  make  it  for  him.  22  Pick.,  158. 

An  action  was  brought  on  a  draft  or  bill  of  exchange  in  these  words:  At 
thirty  days  sight  pay  to  G.  S.,  or  order,  200/,  value  received  of  him,  and  place 
the  same  to  account  of  the  York  Buildings  Company,  as  per  advice  from 
Charles  Mildmay;  to  Mr.  Humphrey  Bishop,  Cashier  of  the  York  Buildings 
Company,  at  their  house  in  Winchester  street,  London.  Accepted  per  H. 
Bishop.  Held  that  this  was  the  personal  acceptance  of  Mr.  Bishop;  2  Stra., 
955,  It  did  not  bind  the  company,  and  therefore  it  was  held  to  bind  the  person 
who  accepted  it. 

A  contract  purporting  to  be  made  "  in  behalf  of"  another,  whose  name  is 
mentioned,  binds  the  principal  and  not  the  agent.  Key  v.  Parnham,  6  Harr. 
and  John.,  418. 

The  fact  that  the  payee  of  a  bill  knows  that  the  drawer  acts  as  an  agent 
does  not  relieve  him  from  personal  liability,  where  he  draws  in  his  own  name, 
notwithstanding  the  contents  are  ordered  to  be  charged  to  the  principal.  11 
Mass.,  54. 

A.  B.  and  C.,  make  their  note  in  this  manner:  "  We,  the  subscribers,  jointly 
and  severally  promise  to  pay  D.,  or  order,  for  the  Boston  Glass  Manufactory, 
&c.,"  and  signed  it  without  any  addition  to  their  names;  held  that  they  were 
personally  bound,  and  not  the  company.  16  Pick.,  347., 

A  draft  is  addressed  to  J.  R.  L.,  President  of  Rosendale  Mining  Company, 
and  accepted  by  him,  signing  his  name  with  that  addition;  and  as  it  was  not 
shewn  that  J.  R.  L.  was  authorised  to  bind  the  company,  he  was  held  liable 
personally.  Moss  v.  Livingston,  4  Comst.  R.,  208. 


PARTIES.  85 

under  a  limited  and  circumscribed  authority,  cannot  bind  the 
principal  by  any  act  in  which  he  exceeds  his  authority,  i  If 
a  husband  give  to  his  wife  authority  to  make  notes,  and  she 
execute  and  deliver  them  in  her  own  name,  making  no  refe- 
rence or  mention  in  them  that  she  acts  as  the  agent  of,  or  on 
behalf  of  her  husband,  the  notes  will  not  bind  him,  unless 
she  is  authorised  to  make  them  in  that  manner :  for  the  pre- 
sumption is,  where  one  person  gives  to  another  an  authority 
to  do  a  given  act,  that  the  act  is  to  be  done  in  the  name  of 
the  principal.  2  To  render  it  binding  upon  the  principal,  the 
contract  of  an  agent  must  be  within  the  authority  conferred; 
and  if  conferred  by  a  written  instrument,  made  known  to  the 
party  with  whom  the  contract  is  made,  it  cannot  be  enlarged 
by  evidence  of  usage.  3  And  whenever  a  person  contracts 
with  one  who  appears  as  the  agent  of  another,  be  is  bound  to 
inspect  the  power,  when  it  is  in  writing,  and  is  holden  to 
understand  its  legal  effect,  and  must  see,  at  his  peril,  that  the 
attorney  or  agent  does  not  transgress  the  prescribed  boundary 
in  acting  under  it.  But  he  is  not  bound  to  know  or  ascertain 
the  truth  of  what  the  agent  says  in  the  execution  of  the  trust : 
he  has  a  right  to  rely  upon  the  veracity  of  the  person  who 
appears  clothed  with  authority  to  act  for  another,  in  respect 
to  the  business  intrusted  to  him.  4  That  is  to  say,  the  decla- 
rations of  one  holding  a  letter  of  attorney,  made  in  the  course 
of  his  dealings  under  it  with  a  third  person,  are  a  part  of  the 
res  gesta,  and  bind  his  principal  equally  with  the  acts  to 
which  they  relate.  The'  ground  on  which  this  principle  is 
based  is  this;  that  where  an  agent  acts  fraudulently,  and  some 
one  must  be  the  loser  by  his  deceit  or  incoinpetency,  it  is 
just  that  he  who  employs  and  puts  a  trust  and  confidence  in 
the  deceiver,  should  be  the  loser,  rather  than  a  stranger.  5 

1  3  Term  R.,  757;  1  Esp.  R.,111;  Beals  T.  Allen,  18  John.  R.,  363. 

»  Minard  T.  Mead,  7  Wend.  R.,  68. 

*  Delafleld  v.  The  State  of  Illinois,  26  Wend.  R.,  192;  6  Term  R.,  591 ;  Hogg 
T.  Smith,  1  Taunt.  R.,  349;  2  John.  Ch.  R.,  244. 

4  North  River  Bank  r.  Aymar,  3  Hill  R.,  262. 

§  Hern  v.  Nichols,  1  Salk.,  289;  9  Wheat.  644;  Putnam  T.  SulliYau,  4  Mus. 
R.,  45;  3  Hill,  262;  Bank  of  the  U.  S.  T.  Darts,  2  Hill,  452. 


86  BILLS  OF   EXCHANGE  AND    PROMISSORY   NOTES. 

A  power  "  to  draw  all  checks  or  drafts  upon  any  of 
the  banks  in  the  city  of  New- York,  for  all  moneys  deposited 
in  my  name,  to  indorse  any  promissory  note  or  notes,  bills 
of  exchange  or  drafts,  to  accept  all  bills  of  exchange  or  drafts, 
or  in  my  name  to  draw  any  note  or  notes,  &e.,"  concluding 
in  the  usual  form,  is  by  intendment  of  law,  limited  to  notes 
and  bills,  drawn,  made  or  indorsed  in  the  proper  business  of 
the  person  executing  the  authority.  There  is  nothing  in  the 
nature  or  effect  of  such  a  power  that  authorizes  the  attorney 
to  use  it  for  his  own  benefit  or  for  the  benefit  of  any  one 
excepting  the  principal,  i  Where  it  is  a  naked  power  to  act 
for  and  in  the  name  of  the  principal,  it  negatives  all  authority 
to  act  for  the  benefit  of  any  one  besides  the  principal ;  and 
persons  dealing  with  the  attorney,  as  such,  are  bound  to 
notice  this  limitation.  2 

Though  a  power  of  attorney  contain  general  words  of 
authority,  it  is  a  rule»of  construction  that  they  are  to  be  read 
and  understood  with  reference  to  the  object  for  which  the 
agency  is  created.  3  An  authority  to  collect  all  demands  due 
to  the  principal,  and  discharge  and  compound  the  same,  to 
dispose  of  his  real  estate,  and  to  accomplish  at  discretion  a 
complete  adjustment  of  his  concerns,  and  do  any  and  every 
act  in  his  name  which  he  could  do  in  person,  does  not  confer 
upon  the  attorney  the  right  to  execute  a  promissory  note  in 
the  name  of  his  principal.  4  The  words  any  and  every  act 
relate  to  the  business,  and  are  not  construed  to  confer  any 
new  and  substantive  power.  So,  where  the  principal  gave  to 
his  attorneys  authority  to  demand  and  receive  of  the  East 
India  company  all  money  that  might  become  due  to  him  on 
any  account  whatever,  and  to  transact  all  business,  and  upon 
non-payment  to  use  all  such  lawful  ways  and  means  as  he 
might  do  if  personally  present ;  the  court  was  of  opinion  that 
the  power  to  transact  all  business,  did  not  authorize  the  at- 

1  Stainer  T.  Tyson,  3  Hill  R.,  279;  Nichol  v.  Green,  Peck's  R.,  283;  3  Hill 
R.,  265. 
a  3  Hill  R.,  281. 

*  Atwood  v.  Munningg,  7  B.  and  C.,  278. 

*  Rossiter  v.  Rossiter,  8  Wend.  R.,  494. 


PARTIES.  87 

torneys  to  indorse  a  bill,  holding  that  those  terms  were  to  be 
construed  to  include  only  all  such  acts  as  might  be  appropri- 
ate and  necessary  in  the  receipt  of  the  money,  i 

The  rule  is,  that  general  words  in  powers  of  attorney  are 
not  to  be  construed  at  large,  but  as  giving  general  powers 
for  carrying  into  effect  the  special  purposes  for  which  they 
are  given.  For  this  reason,  if  the  principal  gives  to  his  agent 
full  powers  to  manage  his  estate,  real  and  personal,  and  au- 
thorizes him  to  do  all  lawful  acts  concerning  his  business  and 
affairs  of  what  nature  or  kind  soever,  he  does  not  thereby 
authorize  him  to  indorse  bills  in  his  name.2 

The  acts  of  a  general  agent,  acting  within  the  general  scope 
of  his  authority,  are  binding  upon  his  principal;  and  third 
persons  are  not  affected  by  any  private  instructions  from  the 
principal  to  his  agent.  Particular  instructions  given  to  him 
for  the  regulation  of  his  conduct  may  make  him  accountable 
to  his  principal ;  but  the  public  or  third  persons  are  not  bound 
to  enquire  minutely  into  his  authority;  it  is  enough  that  they 
know  him  in  his  ostensible  character  as  a  general  agent.  3  If 
it  is  shewn  that  the  agent  has  been  in  the  habit  of  accepting 
bills  on  behalf  of  his  principal,  and  that  the  same  have  been 
paid  under  like  circumstances,  it  is  not  necessary  to  ascertain 
the  precise  relation  subsisting  between  them;  for  this  is  suffi- 
cient to  justify  the  inference  that  he  acts  with  authority. 4  In 
many  cases,  practically,  nothing  more  is  known  or  required; 
since  where  a  principal  is  informed  of  the  acts  of  his  agent,  and 
does  not,  in  a  reasonable  time,  express  his  dissent,  he  is  pre- 
sumed to  assent  to  them,  and  will  be  bound  by  such  implied 
adoption.  5 

Indeed,  it  is  not  necessary,  in  order  to  constitute  a  general 
agent  that  he  should  have  before  done  an  act  the  same  in 
specie  with  that  in  question.  If  he  have  usually  done  things 
of  the  same  general  character  and  effect,  with  the  assent  of 

1  Hay  T.  Goldsmidt,  cited  in  Hogg  v.  Smith,  1  Taunt.,  856. 
•Chitty  on  Bills,  81. 

*  8  Term  R.,  757;  Whitehead  v.  Tuckctt,  15  East,  400. 

4  15  John.  R.,  44;  Barber  v.  Gingell,  8  Esp.  N.  P.  C.,60. 

•  Cairnea  v.  Bleecker,  12  John.  R.,  800;  2  Campb.,  530. 


88  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

his  principals,  that  is  enough.  A  holds  himself  out  to  the 
world  as  B's  partner;  this  authorizes  B  to  do  in  the  name  of 
both,  all  things  which  one  partner  can  do  in  the  name  of  the 
firm;  and  among  others,  to  draw,  accept  and  indorse  bills  and 
notes.  This  is  on  the  principle  that  one  partner  is  the  general 
agent  of  the  concern.  Any  other  agent  recognized  as  holding 
the  like  power,  may  do  the  same  thing,  i 

The  mere  fact  that  a  person  acts  as  clerk  to  a  merchant, 
does  not  authorize  him  to  sign  notes  in  the  name  of  his  em- 
ployer. 2  Unless  he  is  known  as  the  general  agent  or  confi- 
dential clerk,  accustomed  to  do  such  business,  he  cannot  act 
in  the  name  of  his  principal  so  as  to  bind  him;  but  he  may 
become  so  known  and  acknowledged  in  a  variety  of  ways;  as 
by  habitually  giving  notes,  drawing  bills  and  indorsing  in  the 
name  of  his  employer;  3  or  by  appearing  and  acting  as  his 
financial  agent  and  conducting  his  business  in  such  a  manner 
as  to  imply  the  possession  of  a  general  authority,  with  knowl- 
edge to  his  principal.  4  Though  he  may  not  have  done  the 
same,  nor  a  similar  act  before,  the  law  may  and  will  infer  a 
power,  where  the  principal  has  permitted  the  agent  to  assume 
the  conduct  of  his  business  and  allowed  him  to  do  the  act, 
without  dissenting  as  soon  as  it  came  to  his  .  knowledge  ;5  or 
where  the  act  being  done  in  his  name,  he  acquiesces  in  it,  and 
adopts  it  as  his  own.  6 

However,  where  it  is  sought  to  recover  on  a  bill  of  exchange 
accepted  in  the  defendant's  name  by  his  agent,  it  has  been 
held  that  where  no  express  authority  is  shown,  authorizing 
the  acceptance,  but  the  authority  is  infered  from  the  previous 

Commercial  Bank  of  Lake  Erie  v.  Norton,  J  Hill  R.,  501.  An  agent 
having  authority  to  accept,  may  direct  another  clerk  to  write  the  acceptance ; 
this  is  not  delegating  an  authority,  it  is  only  using  another  man's  hand  to  write 
with. 

9  Terry  v.  Fargo,  10  John.  R.,  114. 

8  Neal  v.  Irving,  1  Esp.  R.,  61;  Houghton  v.  Ewbank,  4  Campb.,  188. 

4 1  Hill  R.,  601. 

6  Moss  v.  The  Rossie  Lead  Mining  Company,  6  Hill,  137.  The  principal  being 
informed  of  what  his  agent  has  done,  is  bound  to  express  his  dissent  within  a 
reasonable  time,  or  his  assent  is  to  be  presumed;  12  John.  R.,  300. 

8  Viana  v.  Barclay,  3  Cowen  R.,  281;  Towle  v.  Stevenson,  1  John.  Cas., 
110;  2  id.  424;  ICaine's  R.,  526;  5  Mass.,  11;  9  Cranch  R.,  155. 


PARTIES.  89 

conduct  of  the  principal  recognizing  such  acts  as  binding  on 
him,  it  is  necessary  to  shew  that  the  bill  was  taken  on  the 
faith  of  such  previous  recognition  of  the  agent's  right  to  bind 
him.  i  So,  the  holder  of  a  bill,  purporting  to  be  accepted  by 
the  person  to  whom  it  is  addressed,  but  in  fact  accepted  by 
another  person,  in  his  name,  who  had  been  previously  autho- 
rized thereto,  must  shew,  in  order  to  recover,  either  an  exist- 
ing authority  in  the  agent,  or  that  he  took  the  bill  on  the 
faith  of  his  previous  conduct  and  authority  as  agent.  2 

In  other  words,  the  principal  will  not  be  bound  by  the  acts 
of  one  who  appears  as  his  agent,  on  the  ground  that  he  holds 
him  out  to  the  world  as  such,  unless  the  agent  be  at  the  time 
actually  authorised  to  bind  him,  or  in  consequence  of  his 
having  previously  acted  in  that  capacity,  he  induce  third 
persons  to  take  negotiable  paper  made  or  indorsed  by  him. 
And  nothing  certainly  could  be  more  reasonable  :  the  agent 
acts  by  a  delegated  authority,  and  where  no  one  has  been 
misled  by  the  conduct  of  his  principal,  there  is  no  ground  for 
presuming  or  inferring  a  relationship  that  did  not  really 
exist. 

When  a  general  authority  to  an  agent  has  been  once  shewn, 
it  is  understood  to  continue  until  its  determination  is  made 
generally  known :  a  servant  had  power  to  draw  bills  of  ex- 
change in  his  master's  name,  and  was  afterwards  turned  out 
of  his  service.  Holt,  C.  J. :  "  If  he  draw  a  bill  in  so  little 
time  after,  that  the  world  cannot  take  notice  of  his  being  out 
of  service,  or  if  he  were  a  long  time  out  of  his  service,  but 
that  kept  so  secret  that  the  world  cannot  take  notice  of  it,  the 
bill  in  these  cases,  shall  bind  the  master."  3  It  follows,  as  a 
corollary  from  the  rule  stated,  that  when  an  agent  duly  author- 
ised to  draw  or  indorse  negotiable  paper  in  the  name  of  his 
principal,  does  so,  and  puts  it  in  circulation,  the  principal  is 
bound  by  his  acts,  though  done  in  fraud  of  his  employer.  4 

» 

1  St.  John  v.  Redmond,  9  Porter  (Ala.,)  H.,  428. 
1  Chitty  oil  Bills,  32. 

*  Anonymous  T.  Harrison,  12  Mod.,  846;  16  Mod.,  110. 
4  Smith  v.  Stranger,  Peake  add.  116. 

4 


90  BILLS   OF   EXCHANGE  AND   PROMISSORY  NOTES. 

We  have  seen  that  if  an  agent  sign  his  own  name,  as  indor- 
ser,  drawer  or  acceptor,  he  will  be  personally  liable,  unless  he 
use  some  restrictive  or  qualifying  words :  there  is  an  excep- 
tion in  favor  of  public  agents  acting  for  the  government,  or  in 
a  known  and  public  character,  i  In  this  case  a  promise  by 
two  persons,  to  pay,  in  writing^  signed  with  the  addition  of 
their  official  character,  does  not  render  them  personally  liable.2 
But  even  a  public  agent  may  make  himself  personally  liable, 
where  that  is  the  fair  and  just  construction  of  his  contract. 

It  is  laid  down  as  a  general  proposition,  that  where  an 
agent  makes  a  contract  in  the  name  of  his  principal,  and  it 
turns  out  that  the  principal  is  not  bound  by  it  for  want  of 
authority  in  the  agent  to  make  the  contract,  the  agent  is  per- 
sonally liable  on  it. 3  When  executed  and  signed  in  the  usual 
manner,  as  A  by  his  attorney  B,  there  is  no  question  of  the 
agent's  liability.  A  note  signed  in  that  way  is  the  note  of 
one  or  the  other  of  the  parties  whose  names  are  signed  to  it : 
if  it  turns  out  that  B  had  no  authority  to  execute  the  note 
in  the  name  of  his  principal,  he  is  responsible  on  it  person- 
ally. 4  So,  if  an  agent  signs  a  note  in  the  name  of  another 

1  Cranch,  363-  3  Dal.,  384;  1  Mass.,  208;  9  id.  272,  490;  12  John.  R.,  444; 
10  Conn.,  330. 

8  Fox  v.  Drake,  8  Cowen,  191 ;  Osborne  v.  Kerr,  12  Wend.,  179. 

*  Thomas  v.  Hewes,  2C.  and  M..,  530,  note;  12  Barb.,  27. 

4  Rossiter  v.  Rossiter,  8  Wend, R.,  494;  Palmer  v.  Stephens,!  Denio,  471; 
Nichols  v.  Diamond,  24  Eng.  Law  and  Eq.  R.,  403.  One  who  accepts  a  bill 
for  a  company  without  authority  binds  himself,  though  he  accept  as  agent  and 
declares  verbally  that  he  will  not  bind  himself.  The  bill  was  addressed  "  to 
Mr.  James  Diamond,  purser,  West  Downs  Mining  Company,"  and  the  accep- 
tance was  in  this  form  "  James  Diamond,  accepted  per  proc.  West  Downs 
Mining  Company."  See  ex  parte  Buckley,  in  re  Clarke,  14  Mee.  and  W.,  469; 
12  Ad.  and  E.,  745. 

Such  an  acceptance  will  bind  the  company  where  the  agent  is  authorized  to 
accept.  Thus,  where  a  bill  of  exchange  was  drawn  on  a  joint  stock  company, 
in  its  corporate  name,  and  accepted  as  follows  :  "Accepted,  J.  B.  and  E.  N., 
directors  of  the  C.  Company,  appointed  to  accept  this  bill."  The  acceptance 
was  held  properly  made  on  behalf  of  the  company,  under  7  and  8  Viet.,  c.  110, 
§  45,  which  requires  that  all  bills  of  exchange  shall  be  accepted  by  and  in  the 
names  of  two  of  the  directors  of  the  company,  on  whose  behalf  they  are 
accepted,  and  that  the  acceptance  shall  be  expressed  to  be  by  them  on  behalf 
of  such  company.  Decision  by  Queen's  Bench  in  1 850,  in  Halford  v.  Cameron's 


PARTIES.  91 

person,  beginning,  we  promise  to  pay,  and  adds  his  initials,  the 
presumption  is  that  it  is  the  joint  note  of  the  two;  and  this 
presumption  can  only  be  overcome  by  shewing  that  the  first 
name  was  in  reality  that  of  a  firm,  and  that  the  person  sign- 
ing the  note  had  authority  to  make  notes  in  the  firm  name. 
No  authority  being  shewn  to  affix  the  first  name  to  the  note, 
the  person  assuming  to  act  as  agent  and*  adding  his  initials 
under  the  first  name,  is  clearly  bound,  i  In  England,  a  doubt 
has  been  expressed  whether  the  assumed  agent  is  to  be  holden 
as  a  party  to  the  paper,  unless  his  name  appears  on  it,  although 
an  action  on  the  case  might  lie  against  him.  2  But  the  later 
decisions  correspond  with  the  rule  as  held  in  this  state 

And  it  is  adjudged  that  a  party  may  bind  himself  a»  effec- 
tually by  writing  his  initials  as  by  writing  his  name  in  full;  3 
that  he  may  make  an  indorsement  by  using  figures  or  a  mark 
in  lieu  of  his  proper  name,  intending  thereby  to  bind  himself.  4 
In  these  cases,  however,  it  must  be  alleged  that  he  signed  the 
contract,  or  made  the  indorsement;  and  it  must  be  determined 
as  a  question  of  fact  whether  the  party  adopted  the  mark  or 
figures  as  a  substitute  for  his  name.  In  New  Hampshire, 
where  one  person  signed  the  name  of  another  to  a  note  with- 
out his  authority,  he  was  held  liable  thereon  under  a  count 

1  Denio  R.,  480;  4  N.  Hamp.  R.,  239. 

*  Wilson  T.  Barthrop,  2  Mees.  and  Wels.,  863;  3  Barn,  and  Adol.,  114. 

*  The  Merchant's  Bank  v.  Spicer,  6  Wend.  R.,  443. 

4  Brown  v.  The  Butcher's  and  Drover's  Bank,  6  Hill,  443;  George  v.  Surrey, 
1  Mood  and  M.,  616;  1  Barn,  and  Cress.  146;  8  Adol.  and  Ellis,  94. 


fcc.,  Railway  Co.,  3  Eng.  Law  and  Eq.  R.,  309.  See  also  to  the  same  effect, 
Edwards  v.  the  same,  11  id.  665. 

Where  one  of  three  persons,  who  have  entered  into  an  agreement  to  form  a 
mining  company,  and  have  carried  on  the  business  under  that  agreement, 
accepts  a  bill  for  the  company  as  manager,  the  acceptor  is  individually  liable 
on  the  bill  as  a  member  of  the  company.  Owen  v.  Van  Uster,  1  id.  896. 

Where  a  bill  purporting  to  be  for  value  received  in  machinery  supplied  to 
the  II.  Mining  Company,  was  addressed  to  the  defendant  as  an  individual,  and 
he  wrote  across  the  bill  "  accepted  for  the  company,  A.  B.,  purser,"  he  was 
held  personally  liable.  His  acceptance  did  not  bind  the  company  nnder  the 
statute,  and  was  therefore  held  to  bind  him.  More  v.  Charles,  34  Eng.  Law 
and  Eq.,  138. 


92  BILLS    OF   EXCHANGE  AND    PROMISSORY  NOTtS 

alleging  that  he  made  the  note  by  the  name  in  which  it  was 
executed,  i 

When  an  indorser  of  a  note  commits  it  to  the  maker,  with  the 
date  in  blank,  the  note  carries  on  the  face  of  it  an  implied 
authority  to  the  maker  to  fill  up  the  blank.  As  between  the 
indorser  and  third  persons,  the  maker  under  such  circum- 
stances must  be  deemed  to  be  the  agent  of  the  indorser,  and  as 
acting  under  his  authority  and  with  his  approbation.  Though 
it  is  not  essential  to  the  legal  validity  of  a  note  that  it  should 
be  dated,  yet  as  that  is  necessary  to  its  free  and  uninterrupted 
negotiability  and  it  is  intended  for  circulation,  all  the  parties 
to  it  must  be  presumed  to  consent  that  the  person  to  whom 
such  note  is  entrusted  for  the  purpose  of  raising  money,  may 
fill  up  the  blank  with  a  date. 2  In  like  manner,  where  a 
person  indorses  his  name  upon  a  blank  piece  of  paper  and 
delivers  it  to  another"  for  the  purpose  of  giving  him  a  credit, 
the  latter  is  authorized  to  write  on  the  other  side  a  promissory 
note  payable  to  the  order  of  the  indorser. 3  Such  a  blank 
indorsement  is  in  effect  and  intention  a  letter  of  credit  •  and 
being  made  with  the  intent  that  a  promissory  note  shall  be 
written  on  the  other  side  of  it,  it  does  not  lie  with  the  in- 
dorser to  say  that  he  did  not  indorse  the  note.4  The  same 
rule  was  applied  in  a  similar  case  ;  the  defendant  had  in- 
dorsed for  one  Galley,  his  name  on  five  blank  copperplate 
checks,  made  in  the  form  of  promissory  notes  in  blank,  that 
is,  without  any  sum,  date  or  time  of  payment,  being  mentioned 
in  the  body  of  the  notes.  Galley  afterwards  filled  up  the 
blanks  as  he  chose,  and  the  plaintiff  discounted  them.  The 
defendant  at  the  trial  objected  that  these  notes  were  not,  at 
the  time  of  the  indorsement,  promissory  notes,  and  that  no 
subsequent  act  of  Galley  could  alter  the  original  nature  or 
operation  of  the  defendant's  signature,  which  when  it  was 
written  was  a  mere  nullity.  Lord  Mansfield  :  "  The  indorse- 

1  Bank  v.  Flanders,  4  N.  Hamp.,  239. 
*  Mitchel  v.  Culver,  7  Cowen,  336. 
1  Violett  v.  Patten,  5  Cranch,  151. 
4  Per  Ch.  J.  Marshall,  5  Cranch,  151. 


PARTIES.  93 

ment  on  a  blank  note  is  a  letter  of  credit  for  an  indefinite  sum. 
The  defendant  said,  '  trust  Galley  to  any  amount  and  I  will  be 
kis  security?"  \ 

It'  the  signature  be  genuine,  it  will,  in  the  hands  of  a  bona 
fide  holder  who  has  received  the  same  for  value,  bind  the 
indorser,  notwithstanding  it  was  fraudulently  issued.  2  A 
merchant  doing  business  in  Boston,  having  occasion  to  be  absent 
from  the  city,  intrusted  with  an  apprentice  or  clerk  a  number 
of  papers,  on  which  one  of  the  house  had  written  the  name 
of  the  firm  in  blank,  some  to  be  used  as  notes  indorsed  by 
the  house,  and  others  as  notes  in  which  the  house  were  to  be 
promisors;  giving  particular  instructions  how  they  were  to  be 
u.M.-d,  and  directing  that  one  of  the  blank  indorsements  be 
given  to  a  third  person  named;  by  false  pretences  that  person 
obtained  several  of  them  from  the  clerk,  filled  them  up  and 
negotiated  them.  Parsons,  C.  J.  If  the  clerk  had  fraudu- 
lently and  for  his  own  benefit,  made  use  of  all  the  indorse- 
ments for  making  promissory  notes  to  charge  the  indorsers, 
we  are  of  opinion  that  this  use,  though  a  gross  fraud,  would 
not  be  in  law  a  forgery,  but  a  breach  of  trust.  And  for  the 
same  reason,  when  one  of  these  indorsements  was  delivered 
by  the  clerk,  who  had  the  custody  of  them,  to  the  promisor, 
who  by  false  pretences  had  obtained  it,  the  fraudulent  use  of 
it  would  not  be  a  forgery;  because  it  was  delivered  with  the 
intention  that  a  note  should  be  written  on  the  face  of  the 
paper  by  the  promisor,  for  the  purpose  of  negotiating  it  as 
indorsed  in  blank  by  the  house.  3  Having  been  negotiated, 
and  passed  into  the  hands  of  a  bona  fide  holder,  the  indorsers 
are  liable;  for  they  have  in  this  case,  by  their  laches,  neglect 
or  misplaced  confidence,  permitted  the  notes  to  be  put  in  cir- 
culation. They  cannot,  therefore,  be  allowed  to  cast  the 
burden  of  loss  upon  an  innocent  holder,  i 

1  Russell  v.  Langstafle,  Dougl.,  614. 

*  Putnam  v.  Sullivan,  4  Mass.,  46. 

1  4  Mass. ,68.  The  person  who  obtained  the  blank  indorsement  pretended  to 
the  clerk  that  he  had  burnt  up  the  previous  ones  received  by  him,  and  by  that 
means  obtained  several. 

4  Stalker  v.  McDonald,  6  Hill.  93,  and  the  cases  there  cited  by  Chancellor 
Walworth. 


94  BILLS   OF    EXCHANGE  AND    PROMISSORY  NOTES. 

In  order  to  constitute  the  crime  of  forgery,  it  is  not,  let  it 
be  observed,  necessary  that  the  signature  of  the  party  whose 
name  is  used  should  be  forged.  The  crime  may  be  committed 
by  a  person,  who,  with  intent  to  injure  or  defraud,  makes  an 
instrument  in  his  own  name,  intended  to  create,  discharge  or 
diminish  any  pecuniary  obligation,  or  to  transfer  or  affect  any 
property  whatever,  and  utters  or  passes  it  under  the  pretence 
that  it  is  the  act  of  another  who  bears  the  same  name,  i  And 
in  England,  it  has  been  adjudged  that  where  a  person,  having 
in  his  possession  the  genuine  signature  of  another,  writes  over 
it  a  promissory  note,  he  is  guilty  of  having  forged  the  note.  2 
And  in  one  case,  it  is  held  that  if  a  clerk  be  instructed  to  fill 
up  a  blank  check  signed  by  his  master,  with  a  particular  sum, 
and  he  fraudulently  inserts  a  larger  sum,  it  is  a  forgery  of  the 
check.  3  But  the  signature  indorsed  on  a  bill  being  genuine, 
an  uttering  of  it  by  another  person,  representing  that  he  is 
the  individual  whose  signature  is  on  the  bill  and  who  really 
bears  the  same  name,  is  not  forgery  or  a  felonious  uttering.  4 

It  deserves  to  be  remarked  that  the  question  whether  or 
not  a  crime  has  been  committed,  does  not  determine  the  com- 
mercial question  as  to  the  liability  of  the  person  whose  true 
signature  has  been  misapplied.  Clearly  the  fraud  of  a  clerk 
in  filling  up  a  blank  check  for  a  wrong  amount,  which  is  a 
forgery  under  the  English  criminal  law,  does  not  relieve  his 
principal  from  liability  thereon;  and  it  is  a  familiar  principle 
that  no  one  is  bound  to  pay  a  note  or  other  obligation  to  which 
his  name  has  been  forged;  nor  is  a  party  who  has  received  a 
note  through  a  fraudulent  indorsement  entitled  to  recover 
thereon.  5 

Where  a  blank  is  left  in  a  note,  the  intention  of  the  parties 
is  to  be  ascertained  like  any  other  fact,  and  is  to  be  passed 
upon  by  the  jury.  Thus,  where  a  note  is  made  and  indorsed 

1  2  R.  S.,  3d  ed.,  761;  Rex.  v.  Parkes,  2  Leach,  775. 

*  Rev  v.  Hales,  17  St.  Tr.,  161,  209,  229. 

*  Byles  on  Bills,  262. 

4  Rex  v.  Henry,  1  Leach,  229;  2  East  P.  C.,  656,  S.  C. 
»  Canal  Bank  v.  Bank  of  Albany,  1  Hill  R.,  287. 


PARTIES.  95 

and  committed  by  the  indorser  to  the  maker,  leaving  the 
amount  blank,  it  carries  with  it  an  authority  to  the  maker  to 
fill  it  up  with  the  sum  for  which  it  was  intended  to  be  made, 
and  this  intention  is  a  fact  to  be  shown  by  testimony,  i  If  no 
amount  has  been  specified  or  agreed  upon  between  the  parties, 
the  maker  may  fill  it  up  for  what  sum  he  pleases. 

Any  material  alteration  made  in  a  note  after  its  execution 
or  indorsement,  such  as  inserting  words  of  negotiability  or 
altering  the  time  or  place  of  payment,  discharges  the  previous 
parties  to  it.2  But  where  a  blank  is  left  in  it,  there  is  an 
implied  authority  to  the  holder  to  fill  up  the  instrument,  and 
make  it  in  fact  what  it  was  designed  to  be.3  If  made  payable 
to  blank,  the  person  to  whom  it  is  negotiated  may  fill  it  up  by 
inserting  his  own  name;4  if  made  payable  to  the  order  of  the 
person  who  shall  thereafter  indorse  it,  it  is  negotiable  without 
any  alteration,  and  may  be  transfered  by  indorsements  So, 
if  a  person  sign  his  name  upon  a  blank  paper  and  deliver  it 
to  another  to  draw  above  the  signature,  he  is  considered  as  by 
that  act  authorizing  it  to  be  filled  up  for  any  amount.6 

The  office  of  an  agent  is  merely  ministerial :  and  therefore 
in  the  somewhat  antiquated  language  of  the  old  books, 
infants,  feme  coverts,  persons  attainted,  outlawed,  excommu- 
nicated, aliens  and  others,  though  incapable  of  contracting  on 
their  own  account  so  as  to  bind  themselves,  may  act  as  agents.7 
The  principal  is  alone  interested  in  the  choice  of  those  whom 

1  Boyd  v.  Brothf  rson,  10  Wend.  R.,  93.  The  note  aa  made  and  indorsed  was 
in  this  form  :  "  Six  months  after  date  I  promise  to  pay  to  the  order  of  Philip 
Brotherson,  eight  ,  for  value  received,  at  the  Mohawk  Bank,  Sche- 

nectady,  May  1,  1829."  And  the  evidence  shewed  that  it  was  intended  to  be 
given  for  eight  hundred  dollars.  Held  that  the  maker  had  the  right  to  insert 
the  right  amount. 

*Woodworthv.  Bank  of  America,  19  John.  R.,  891;  CluteJ v.  Small,  ;17 
Wend.  R.,  238;  Nazro  v.  Fuller,  24  Wend.  R.,  874;  Bunce  v.  Westcott,  8 
Barb.,  374. 

•  17  Wend.,  238;  7  Cowen,  336;  10  Wend.,  98. 

•  Crutchley  v.  Clarence,  2  Maule  and  S.,  90. 

•  United  States  v.  White,  2  Hill  R.,  69. 

•  Collis  v.  Emmett,  1  Hen.  Bla.,  818. 

1  Co.  Litt.,  62  a.  A  bank  may  act  as  an  agent  to  collect  notes,  4  Cowen, 
667. 


96  BILLS    OF  EXCHANGE  AND   PROMISSORY  NOTES. 

he  employs  to  act  in  his  name,  and  may  appoint  whom  he 
pleases.  As  to  the  manner  of  making  the  appointment,  it 
should  be  in  writing,  under  seal,  in  order  to  authorize  the 
agent  to  make  a  conveyance  of  lands :  i  but  in  other  cases 
where  the  intention  only  is  to  clothe  him  with  the  power  to 
make  notes,  to  draw,  indorse  and  accept  bills  of  exchange, 
the  appointment  may  be  made  by  parol.2  If  the  authority  be 
to  execute  a  deed,  it  must  be  delegated  by  deed  :  if  it  be  to 
enter  into  a  parol  contract,  it  may  be  by  parol;  and  even  cor- 
porations may  appoint  an  agent  without  seal,  where  they  are 
at  liberty  to  contract  in  that  manner.3 

Capacity  to  do  an  act,  generally  implies  the  right  to  do  it 
through  the  intervention  of  an  agent :  but  those  who  are 
incapable  of  contracting,  being  persons  not  sui  juris,  cannot, 
as  a  general  rule,  appoint  an  agent  or  attorney;  certainly  they 
cannot  do  by  another  what  they  cannot  do  in  person.4 

There  is  another  large  class  of  cases  where  one  person  is 
held  bound  by  the  acts  of  another  or  others,  associated  with 
him  in  business  and  acting  under  an  implied  agency  ;  as  where 
one  of  several  partners  makes  a  contract  within  the  scope  of 
the  partnership  business. 

A  partnership  exists  where  two  or  more  persons  enter  into 
a  joint  undertaking,  with  an  agreement  to  share  in  the  profits 
and  losses  of  the  business  ;5  as  where  two  persons  make  a 
joint  purchase  for  a  particular  adventure,  upon  an  agreement 
to  share  jointly  in  the  ultimate  profit  and  loss;  6  or  where 
persons  become  joint  proprietors  of  property  and  funds,  and 

1  Van  Ostrand  v.  Reed,  1  Wend.  R.,  424.    An  authority  to  execute  a  deed 
must  be  given  by  deed,  to  render  the  deed  valid,  5  Hill,  107. 
a  Lawrence  v.  Taylor,  5  Hill,  107;  Hanford  v.  M'Nair,  9  Wend.,  54,  68. 
'ICowen,  513;  4  id.  645, 

*  Snyder  v.  Sponable,  1  Hill,  567.     See  Mechanics'  Bank  v.  New-York  and 
New  Haven  Railroad  Co.,  3  Kernan  R.,  699.    It  seems  an  agent  cannot  bind 
a  corporation  by  an  act  which  the  corporation  itself  cannot  legally  do;  e.g.,  he 
cannot  bind  the  corporation  by  making  a  fraudulent  issue  of  certificates  of 
stock,  when  the  new  issue  is  not  authorized  by  law. 

'  Reynolds  T.  Cleveland,  4  Cowen,  288;  Champion  v.  Bostwick,  18  Wend. 
B.,  175. 

•  Cumpston  v.  M'Nair,  1  Wend.,  457. 


PARTIES.  97 

engage  in  a  business  upon  a  contract  to  share  the  profits  and 
losses,  i  A  community  of  interest  in  land  does  not  make  mere 
partners,  nor  does  a  community  of  interest  in  personal  pro- 
perty. There  must  be  some  joint  adventure,  and  an  agree- 
ment to  share  in  the  profit  and  loss  of  the  undertaking. 2  As 
between  the  parties  themselves,  in  order  to  constitute  a  part- 
nership, there  must  be  a  joint  ownership  of  the  partnership 
funds,  according  to  the  intention  of  the  parties  ;  and  an  agree- 
ment, either  express  or  implied,  to  participate  in  the  profits 
and  losses  of  the  business,  either  ratably  or  in  some  other 
proportion  agreed  upon.  3  To  constitute  a  person  the  partner 
in  a  firm  in  this  sense,  he  must  have  an  interest  in  the  stock, 
with  the  right  of  control,  and  thus  have  a  right  to  the  profits 
as  the  result  of  capital  and  industry  in  which  he  and  the 
others  concerned  are  all  interested,  and  must  be  liable  for 
losses  ;  for  a  mere  participation  in  the  profits  of  a  business  by 
way  of  payment  for  his  labor  and  services,  without  having 
any  interest  in  the  capital  stock  or  right  to  control  the  business, 
does  not  make  him  a  partner.4 

He  is  not  a  partner  where  he  is  employed  as  an  agent  in 
conducting  the  business  of  a  firm  at  an  annual  salary,  with  a 
stipulation  that  he  is  to  receive  in  addition  thereto  one  third 
of  the  profits  of  the  business,  not  being  liable  for  losses.5 
And  the  law  is  well  settled,  that  a  mere  agent  or  servant  who 
is  bound  to  obey  orders  and  has  no  interest  in  the  capital 
stock,  is  not  rendered  a  partner  even  as  to  third  persons, 

1  Chase  v.  Barrett,  4  Paige,  143. 

•  Porter  v.  McClure,  15  Wend.,  187;  9  John.  R.,  503. 

1  4  Paige  Cli.  R.,  148.  If  one  party  furnishes  the  largest  part  of  the  capital, 
a  store  and  a  clerk,  and  the  other  carries  on  the  business,  and  by  the  agree- 
ment between  them  there  is  to  be  a  division  of  the  profits,  this  is  a  partner- 
ship. Cushman  v.  Bailey,  1  Hill  R..  52(J.  So,  if  one  party  furnishes  the 
capital  and  the  other  carries  on  the  business  of  manufacturing,  under  an  agree- 
ment between  them  that  the  first  is  to  receive  back  his  capital  and  a  certain 
portion  of  the  profits  made,  this  is  a  partnership.  Everett  v.  Cox,  5  Dcnio, 
180. 

4  Ogden  v.  Astor,  4  Sand.  R.,  811. 

»  Vandenburgh  v.  Hull,  20  Wend.  R.,  70;  5  Taunt.,  74;  2  H.  Black.,  690,  4 
Maule  and  Selw.,  240. 


98  BILLS    OF   EXCHANGE  AND    PROMISSORY  NOTES. 

merely  because  he  is  to  be  compensated  for  his  services  by 
receiving  a  share  of  the  profits  which  may  arise  from  the 
business  in  which  he  is  employ ed.i  The  general  doctrine  has 
been  stated  thus :  "  traders  become  partners  between  them- 
selves by  a  mutual  participation  of  profit  and  loss  ;  but  as  to 
third  persons,  they  are  partners  if  they  share  the  profits  of  a 
concern;  for  he  who  receives  a  share  of  the  profits,  receives  a 
part  of  that  fund  upon  which  the  creditors  of  the  concern 
have  a  right  to  rely  for  payment,  and  is  therefore  to  be  made 
liable  for  losses,  although  he  may  have  expressly  stipulated 
for  exemption  from  them. "2  But  this  rule  is  not  universal; 
and  the  exception  which  will  best  reconcile  the  cases,  is  least 
liable  to  abuse,  and  is  so  distinctly  marked  that  it  can  be 
easily  administered,  is  that  adopted  in  this  state  which  allows 
one  man  to  employ  another  as  a  subordinate  in  his  business, 
and  agree  to  pay  him  out  of  profits,  if  any  shall  arise,  with- 
out giving  the  party  employed  the  rights  or  subjecting  him  to 
the  liabilities  of  a  partner.3 

As  to  third  persons  dealing  with  a  firm,  the  test  question  is, 
not  whether  a  person  receives  a  portion  of  the  profits,  but 
whether  he  has  acted  as  a  partner,  and  held  himself  out  to 
the  world  as  such. 4  If  he  has  knowingly  permitted  another 
to  carry  on  business  in  his  name,  or  acknowledged  himself  by 
act  or  word  as  a  member  of  the  firm,  he  is  liable  as  such  to  all 
persons  who  have  been  thereby  induced  to  enter  into  contracts 
with  the  firm.  5  The  general  principle,  and  the  reason  on 
which  it  is  founded,  are  thus  stated  by  Tindal,  C.  J.,  in  Fox 
v.  Clifton  :  "  By  the  general  rule  of  law  relating  to  partner- 
ships in  trade,  each  member  of  it  is  liable  to  the  debts  and 
engagements  of  the  whole  company,  contracted  in  the  course 
of  the  trade.  This  is  a  consequence  not  confined  to  the  law 
of  this  country,  but  extending  generally  throughout  Europe; 

1  Burckle  v.  Eckhart,  1  Denio.  337;  S.  C.,  3  Comst.  R.,  132. 
a  Dob  v.  Halsey,  16  John.  R.,  40;  12  East,  421 ;  4  East,  144. 
'  Per  Ch.  J.  Bronson,  1  Denio,  337. 

4  Whitney  v.   Sterling,  14  John.  R.,  215;  2  Hen.   Bla.,  247;  Mclver  v. 
Humble,  16  East,  174. 
•  U  John.,  215:  Harvey  v.  Kay,  9  B.  and  C.,  356. 


PARTIES,  99 

and  it  is  founded  partly  on  the  desire  to  favor  commerce,  that 
merchants  in  partnership  may  obtain  more  credit  in  the  world, 
and  more  especially  on  the  principle  that  members  of  trading 
partnerships  are  constituted  agents,  the  one  for  the  other,  for 
entering  into  contracts  connected  with  the  business  and  con- 
cerns of  the  partnership,  so  that  by  the  contracts  of  the  agent 
all  his  principals  are  bound.  But  to  subject  a  person  to 
responsibility  as  a  partner,  for  the  acts  of  another,  done  with- 
out his  express  concurrence,  he  must  stand  in  one  or  the  other 
of  these  two  situations;  first,  he  must  at  the  time  of  making 
the  contract,  whether  bill,  note,  or  other  instrument,  have 
been  actually  a  partner  in  the  joint  concern;  or,  secondly, 
admitting  that  he  was  not,  he  must  have  represented  or  per- 
mitted himself  to  be  represented  as  such,  before  or  at  the  time 
of  making  the  contract,  either  generally  to  all  the  world  or  to 
several  individuals,  or  to  the  plaintiff  in  particular,  or  to  some 
person  through  whom  he  claims."  i 

It  is  only  a  fair  and  reasonable  inference  from  the  principle 
just  stated,  that  when  one  of  a  firm  makes  a  note  or  indorses 
or  accepts  a  bill  of  exchange  in  the  name  of  the  concern,  and 
apparently  in  the  due  course  of  its  business,  the  act  shall  be 
deemed  that  of  the  partnership  ;  especially  where  the  bill  or 
note  has  passed  into  the  hands  of  a  bona  fide  holder.  2  The 
person,  who,  acting  in  good  faith,  receives  a  bill  or  note  by 
indorsement  from  one  of  several  partners,  is  not  bound  to 
apply  to  each  of  the  others  to  ascertain  if  he  assented  to  such 
indorsement :  in  the  absence  of  all  fraud  on  the  part  of  the 
indorsee,  the  act  will  bind  the  firm.3  Nor  is  the  rule  changed 
by  the  fact  that  the  partner  making  the  indorsement,  accept- 
ing the  bill  or  giving  the  note,  overstepped  the  line  of  author- 
ity prescribed  to  him  by  the  articles  of  copartnership  existing 
between  them  ;  unless  the  party  to  whom  the  indorsement 
was  made,  the  note  delivered,  or  in  whose  favor  the  bill  was 
accepted,  knew  that  the  same  was  done  in  fraud  of  the  firm.4 

'  6  Binjr.,  791 ;  Donbleday  v.  Muskctt,  7  Bing.,  117. 
1  Swan  T.  Steele,  7  East,  210. 
'  Per  Lord  Ellenborough ,  in  the  same  case. 
Taller  T.  Roe,  Peake,  197. 


100  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

Knowing  that,  he  cannot  recover  against  the  other  partners. 
Neither  can  he  recover  on  a  bill  against  partners  in  a  concern, 
where  the  acceptance  is  contrary  to  agreement  between  them, 
and  by  one  of  the  partners  in  fraud  of  the  rest,  though  he  be 
ignorant  of  the  fraud,  unless  he  shows  that  he  gave  value  for 
it.  i 

Presumptively,  a  note  given  by  one  partner  in  the  name  of 
the  firm,  is  evidence  of  the  existence  of  a  partnership  debt, 
on  the  ground  that  the  admissions  of  each  in  relation  to 
matters  in  which  the  partners  have  a  community  of  interest  is 
binding  upon  all.  And  hence  the  note  of  a  firm  is  deemed  in 
the  commercial  community,  prima  fa  tie,  to  have  been  given 
in  the  fair  legitimate  course  of  the  partnership  business;  2  and 
consequently,  the  partner  objecting  to  be  made  liable  is 
bound  to  make  out  a  case,  which  will  exonerate  him.  .  If  he 
objects  that  the  note  was  given  in  payment  of  the  individual 
debt  of  one  of  the  members  of  the  firm,  he  must  prove  it.  If 
he  objects  that  the  money  for  which  the  note  was  given  was 
was  never  brought  into  the  partnership  business,  he  must  not 
only  prove  it,  but  he  must  prove  also,  that  the  person  to 
whom  the  note  was  given,  knew  that  the  money  was  borrowed 
for  the  individual  use  of  the  partner  borrowing,  and  not  for 
the  firm.  If  he  objects  that  the  money  was  borrowed  by  one 
of  the  firm,  and  upon  the  responsibility  of  the  partner  borrow- 
ing, he  must  prove  it  ;  and  proving  it,  the  firm  is  not  liable, 
unless  it  be  shown  by  the  opposite  party,  that  the  money  was 
in  fact  used  in  the  partnership  business,  with  the  knowledge 
and  consent  of  the  partners.  3 

By  the  act  of  entering  into  a  copartnership,  each  of  its 
members  becomes  clothed  with  full  power  to  make  any  and 
every  contract  within  the  scope  and  limits  of  the  copartner- 
ship business.  This  power  is  incident  to  the  copartnership 
relation,  and  therefore  the  contract  of  one  of  them  binds  them 

1  Chitty  on  Bills,  42, 43;  1  Deur.  R.,  319;  4  Seld.,  408. 

*Doty  v.  Bates,  11  John.  R.,  544. 

•  WhitUker  v.  Brown,  16  Wend.  R.,  445  j  6  Cowen.  602. 


PARTIES.  101 

all,  though  one  of  them  expressly  dissents  from  or  objects  to 
the%xecution  of  the  agreement,  i 

Outside  of  the  business,  to  carry  on  which  the  copartner- 
ship is  formed,  neither  partner  can  bind  the  firm.  If  two 
persons  are  engaged  in  partnership  in  the  business  of  farming, 
one  of  them  cannot,  like  a  partner  in  trade,  bind  his  associate 
by  the  acceptance  of  a  bill  of  exchange.  2  Still  it  is  held  in 
this  state  that  where  one  of  two  partners,  engaged  in  the 
business  of  farming  and  coopering,  makes  a  promissory  note 
and  signs  the  individual  name  of  each  to  it,  there  being  no 
evidence  of  the  firm  name,  it  is  to  be  presumed,  in  the  absence 
of  all  proof  to  the  contrary,  to  have  been  given  for  a  part- 
nership transaction.  3 

The  rule  is  that  partners  in  trade,  or  partners  in  occupation 
or  employment,  may  bind  a  copartner  in  matters  which 
according  to  the  usual  course  of  dealing,  have  reference  to  the 
business  transacted  by  the  firm.  4  On  the  contrary,  if  a  per- 
son deals  with  a  partner  in  a  matter  not  within  the  scope  of 
tlit-ir  business,  the  intendment  of  law  will  be  that  he  deals 
with  him  on  his  private  account,  notwithstanding  the  partner- 
ship name  be  used.  5  Thus,  where  two  persons  entered  into 
partnership  in  the  sugar  refining  business  and  published  a 
notice  to  that  effect,  in  two  newspapers,  mentioning  the  name 
of  the  firm,  and  one  of  them  afterwards  bought  a  quantity  of 
brandy  for  shipment  to  the  West  Indies,  gave  his  own  note  for 
the  same,  payable  to  the  firm,  and  indorsed  it  in  the  firm 
name,  it  was  held  that  the  partnership  was  not  liable  as 
indorsers  of  the  note.  6  So,  when  one  partner  delivers  part- 

1  Wilkins  v.  Pearcc,  5  Denio,  511.  The  agreement  in  this  case  was  made  by 
one  of  three  partner*  to  guaranty  Pearoe  against  a  bill  accepted  by  him  for  the 
accommodation  of  the  firm ;  and  one  of  the  three  expressly  dissented  from  the 
agreement.  Hold  that  the  same  was  valid,  though  it  was  known  to  have  been 
so  executed. 

*  Greenslade  v.  Dower  and  another,  7  Barn,  and  G.,  635. 

*  McGregor  v.  Cleveland.  5  Wend.  R.,  475. 
«  Dobb  v.  Halsey,  16  John.  R.,  84. 

*  Livingston  v.  Rosevelt,  4  John.  R.,  251. 

'  4  John.  R.,  251.  If  one  of  the  partners  is  accustomed  to  make  notes  and 
indorse  them  in  the  name  of  the  firm,  it  is  a  question  of  fact  whether  the  party 
to  whom  he  gives  or  indorses  a  note  knows  that  it  is  made  or  indorsed  for  an 
individual  debt;  if  he  know  that  fact,  the  firm  Is  not  bound. 


102  BILLS    OF  EXCHANGE  AND    PROMISSORY    NOTES. 

nership  property  to  a  third  person,  who  receives  it  in  payment 
of  his  individual  debt,  knowing  that  it  is  partnership  property, 
it  is  adjudged  that  the  firm  may  recover  back  the  property,  or 
its  value;  i  and  the  principle  is  the  same  with  respect  to  the 
making  and  indorsement  of  notes;  if  one  of  a  concern  gives 
a  note  of  the  firm  for  his  own  private  debt  to  a  person  who 
knows  the  circumstances,  that  third  person  cannot  recover  on 
it  against  the  other  partners.  2 

Partners  in  the  practice  of  physic  may  mutually  bind  each 
other  for  all  things  properly  belonging  or  necessary  to  be  used 
by  them  in  their  vocation,  such  as  medicines,  surgical  instru- 
ments, and  things  of  that  kind;  but  they  cannot  bind  each 
other  by  drawing  bills,  or  making,  indorsing  and  issuing  notes 
for  other  purposes,  or  for  raising  money,  that  not  being  an 
article  for  which  the  firm  has  any  direct  use.  3  Neither  can 
attorneys  in  partnership  bind  each  other,  as  by  a  contract 
made  by  one  of  them  in  the  firm  name  to  indemnify  a  sheriff 
for  making  an  arrest;  but  the  partnership  may  be  proved  by 
way  of  shewing  circumstantially,  in  connection  with  other 
facts,  that  the  other  partner  assented  to  the  agreement.  4  If 
the  partnership  is  limited  by  the  articles,  to  a  particular  busi- 
ness, and  one  of  the  partners  executes  a  note  in  the  name  of 
the  firm  for  the  purchase  of  property  for  other  purposes  than 
those  for  which  the  partnership  was  formed,  such  as  the  pur- 
chase of  real  estate,  it  is  incumbent  on  the  person  taking  such 
note  and  suing  on  it  to  prove  affirmatively  that  the  other  part- 
ner consented  to  the  purchase;  5  and  this  he  may  do  by 
shewing  their  subsequent  contract,  or  by  proving  that  they 
enlarged  their  business  and  used  the  property  purchased  in 
carrying  it  on.  But  in  order  to  make  such  a  contract  binding 
on  the  firm,  the  assent  of  the  other  partner  must  be  proved, 
it  will  not  be  presumed.  6 

1  Dobb  v.  Halsey,  16  John.  R.,  34. 

*  Livingston  v.  Hostie,  2  Caines,  246;  Lansing  v.  Gaine,  2  John.  R.,  300;  4 
id.  251 ;  13  East,  175;  19  John.  R.,  154:  6  Wend.  R.,  629. 

*  Crosthwait  v.  Ross,  1  Humph.  (Tenn.,)  R.,23. 
4  Marsh  v.  Gold,  2  Pick.  R.,  285. 

*  Weller  v.  Keyes,  6  Verm.,  257. 
Mercien  v.  Andrews,  10  Wend.,  461. 


PARTIES.  103 

Though  a  note  be  made  by  one  of  the  concern  in  the  firm 
name,  out  of  the  usual  course  of  business,  yet  if  it  be  signed 
by  them,  or  being  made  payable  to  them  or  order,  it  be  indorsed 
by  one  of  them  in  the  name  of  the  firm,  and  then  discounted 
or  transfered  to  a  bona  fide  holder,  all  the  partners  are 
responsible  on  the  note,  i  In  the  hands  of  the  person  who 
receives  such  a  note  from  the  partner  making  or  indorsing  it, 
with  knowledge  that  it  is  given  or  indorsed  for  his  private 
debt,  or  in  a  transaction  unconnected  with  the  partnership 
business,  it  is  not  binding  on  the  firm.  2  Having  been 
transfered  before  maturity,  in  the  usual  course  of  business, 
and  the  firm  becomes  liable;  this  is  on  the  principle  that 
being  negotiable  paper,  and  having  been  made  or  indorsed  by 
one  who  prima  facie  had  the  authority  to  do  the  act,  a  recovery 
thereon  is  not  to  be  defeated,  when  the  action  is  brought  in 
the  name  of  the  holder  who  has  received  the  same  for  value, 
and  in  good  faith.  3  In  other  words,  the  law  merchant,  in 
order  to  preserve  the  negotiability  of  the  instrument,  holds 
the  members  of  a  firm,  who  have  the  best  means  of  knowing 
whether  their  associates  be  trustworthy,  responsible  for  each 
other. 

The  rule  is  general  that  one  member  of  a  partnership  can- 
not bind  his  copartners  by  signing  notes,  accepting  bills  or 
indorsing  them  in  the  firm  name  as  surety,  or  for  the  accom- 
modation of  others.  No  authority  of  that  kind  arises  out  of 
the  partnership  relation.  If  the  word  surety  be  added  to  the 
signature,  the  presumption  is  that  it  does  not  bind  the  other 
partners;  4  for  the  law  does  not  presume  lending  notes  and 
making  accommodation  indorsements  to  be  within  the  scope 

'Gansevoort  T.  Williams,  14  Wend.  R..  133;  Catskill  Bank  T.  Stall,  15 
Wend.,  864;  S.  C.,  18  Wend.,  466;  17  Wend.,  524. 

Ml  John.  R.,  544;  16  id.  84;  19  id.  154;  8  Wend.,  419;  6  id.  228;  6  id. 619; 
7  id.  158,  810. 

*  Swan  T.  Steele,?  East,  210.  Though  founded  partly  on  public  policy, 
the  rule  is  supported  by  justice  and  good  sense;  if  one  of  two  innocent  parties 
must  suffer,  the  burden  should  fall  on  the  negligent. 

4  Boyd  v.  Plumb,  7  Wend.,  809. 


104  BILLS    OF  EXCHANGE  AND    PROMISSORY   NOTES. 

of  ordinary  partnerships,  i  Beyond  the  limits  of  the  legiti- 
mate business  of  the  concern,  and  outside  of  their  usual  course 
of  dealing,  his  contract  in  the  name  of  the  firm  does  not 
place  his  associates  under  any  obligation  to  fulfill  it :  it  is  his 
contract,  and  not  theirs;  this  is  the  broad  principle  running 
through  all  the  cases,  and  the  departures  from  it  are  made  for 
the  convenience  and  safety  of  commercial  business.  2  If  a 
partner  subscribe  the  name  of  his  firm  to  a  note  as  surety  for 
another,  and  the  transaction  is  made  known  to  the  person  to 
whom  the  note  is  transfered,  it  cannot  be  enforced  against  the 
firm,  unless  jit  is  shewn  that  the  other  partner  consented  to,  or 
ratified  the  act.  3  It  is  not  paper  such  as  he  has  a  right  to 
sign  and  issue  in  the  name  of  the  firm;  and  the  rule  prohibi- 
ting partnership  security  from  being  pledged  to  third  persons, 
without  the  consent  of  all  the  partners,  is  just  and  salutary, 
and  strictly  enforced.  4  When  such  an  act  is  done  privately, 
with  the  knowledge  of  the  person  to  whom  the  partnership 
responsibility  is  pledged,  it  is  a  fraud  on  the  firm,  and  is  so 
regarded  in  the  English  courts,  where  they  put  the  defence  of 
the  copartner  in  such  a  case  upon  the  distinct  ground  of 
fraud,  committed  upon  him  by  his  associate  and  the  holder; 
holding  as  a  corollary  to  that  principle,  that  the  signature  of 
the  firm  is  prima  facie  binding  upon  all  the  partners.  5  With 
us,  the  defence  is  placed  upon  the  ground  of  a  want  of 
authority;  and  it  is  enough  in  the  first  instance  for  the  firm  to 
shew  that  the  instrument  was  given  and  received  as  accom- 
modation paper.  6 

The  order  in  which  the  burden  of  proof  passes  from  one 
side  to  the  other,  may  illustrate  the  principle  of  which  we 

1  Austin  v.  Vandermark,  4  Hill  R.,  259. 

3  7  Wend.,  310. 

8  Bank  of  Rochester  v.  Bowen,  7  Wend.,  158;  1  Wend.,  529;  3  id.  415;  14 
id.  133,  l46;4Seld.,408. 

4  Foot  v.  Sabin,  19  John.  R.,  154;  6  Cowen,  147;  9  id.  208;  4  id.  282;  5  id. 
688. 

*  Hope  v.  Oust,  1  East,  52;  8  Ves.,  544;  1  East,  48;  Ridley  v.   Taylor,  13 
East,  175;  Green  v.  Deakin,  2  Starkie,  847. 

•  14  Wend.,  138;  11  John.  R.,  644;  16  id.  34;  19  id.  154;  3  Wend.,  419;  5 
id.  223;  6  id.  619;  7  id.  158,  310. 


PARTIES.  105 

are  speaking.  The  holder  suing  on  a  note  signed  by  one  of  a 
concern  in  the  firm  name,  proves  first  the  existence  of  the  co- 
partnership and  that  the  signature  is  in  the  handwriting  of 
one  of  the  partners  ;  if  nothing  further  is  shown  the  plaintiff 
is  entitled  to  recover,  i  But  if  the  defendants  here  take  up 
the  case  and  prove  that  the  note  was  signed  and  delivered  to 
the  holder  as  accommodation  paper,  they  establish  a  defence 
to  the  note  ;  2  and  the  plaintiff,  in  order  to  recover,  must  then 
shew  that  the  note  was  executed  with  the  consent  of  the  other 
members  of  the  concern,  or  that  he  is  a  bona  fide  holder  of 
the  note.  3  The  consent  must  be  proved  ;4  but  If  it  appear 
that  the  house  was  in  the  habit  of  indorsing  at  the  bank  or 
elsewhere  for  others,  such  general  course  of  dealing  will  be 
evidence  from  which  the  jury  may  find  an  authority  so  to 
bind  the  firm.  5  Evidence  that  each  of  two  partners  have 
repeatedly,  with  the  knowledge  and  assent  of  the  other,  in- 
dorsed accommodation  notes  in  the  firm  name,  is  not  sufficient 
proof  that  they  are  respectively  authorized  to  sign  the  firm 
name  to  a  lent  note,  as  maker  and  surety :  6  an  indorsement 
is  a  different  contract  from  that  entered  into  by  the  maker  of 
a  note. 

Notice  to  the  clerk  or  agent  of  the  party  receiving  a  note 
signed  by  one  of  a  firm  as  surety  for  another,  is  notice  to  his 
principal;  and  hence  when  a  bank  discounts  such  a  note,  the 
fact  of  suretyship  being  made  known  to  the  cashier,  it  cannot 
recover  against  the  firm  without  shewing  the  consent  of  the 
other  partners,  or  a  subsequent  ratification  of  the  act.  7  And 
so,  if  the  party  receiving  the  note  knows  that  it  is  given  for 
the  private  debt  of  one  of  the  firm,  as  if  it  be  given  in  renewal 

1 14  Wend.,  138;  Vallett  T.  Parker,  6  Wend.,  615. 

•  11  John.  K..  544;  7  Wend.  R.,  168. 

'  7  East,  210,  and  the  cases  above  cited. 
4  10  Wend.,  461 ;  19  John.  R.,  154. 

•  Duncan  v.  Lowndesfc,  Bateman,  8  Campb.,  478;  14  Wend.,  139;  1  Dili  R., 
601 ;  6  id.  12;  Butler  v.  Stocking,  4  Seld.,  408. 

•  Early  v.  Reed,  6  Hill  R.,  12;  Wilson  v.  Williams,  14  Wend.,  146. 
1  Bank  of  Rochester  T.  Bowen,  7  Wend.,  158. 

5 


106  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

of  his  individual  note,  he  is  chargeable  with  notice,  and  can- 
not recover  on  it  as  a  bona  fide  holder,  i 

When  a  note  or  other  negotiable  paper  is  made  or  indorsed 
in  the  name  of  the  firm  for  the  accommodation  of  other  parties, 
and  negotiated  or  transfered  to  one  who  has  no  knowledge  of 
the  circumstances,  it  is  as  we  have  said  no  defence  for  the 
other  partner  to  allege  that  it  was  made  or  indorsed  out  of  the 
usual  course  of  business,  or  without  authority.  2  But  the  rule 
is  subject  to  this  qualification;  if  the  firm  proves  that  it  was 
made  or  indorsed  as  accommodation  paper,  the  holder  will 
then  be  required  to  shew  that  he  received  it  bona  fide,  and  for 
a  valuable  consideration.  3  Receiving  it  as  security  is  not, 
but  receiving  it  in  discharge  of  a  precedent  debt,  is  receiving 
it  for  value.  4 

To  borrow  money,  and  to  negotiate  bills  and  notes,  are  inci- 
dental to,  and  usual  and  necessary  in  many  special  as  well  as 
in  general  partnerships.  5  While  engaged  in  business  of  this 
sort  the  authority  of  the  individual  partner  to  bind  the  com- 
pany is  the  same  in  both ;  and  therefore  if  he  borrow  money 
professedly  for  the  concern,  and  give  a  note  therefor  signed  in 
the  firm  name,  it  is  binding  upon  all  the  partners.  6  And  in 
this  case  it  is  a  matter  of  no  moment  whether  the  money  bor- 
rowed actually  goes  into  the  partnership  business,  or  is  misap- 
plied by  the  partner  borrowing ;  7  provided  the  lender  is  not 
aware  of  any  intention  to  misapply  the  funds.  So,  where  the 
partnership  business  is  conducted  in  the  name  of  one  of  its 
members,  and  he  indorses  notes  and  bills  in  his  own  name, 

1  14  Wend.,  133;  Williams  v.  Walbridge,  3  Wend.,  415;  3  Pick.,  5. 
"  Bank  of  Rochester  v.  Monteath,  1  Denio,  402;  Livingston  v.  Roosevelt,  4 
John.  R.,  261;  15  Wend.,  364;  20  id.  251 ;  4  Hill,  259;  14  Ohio,  592. 

*  Bank  of  St.  Albans  v.  Gilliland,  23  Wend.,  311. 

4  23  Wend.,  313,  and  the  cases  cited  in  the  opinion  of  the  court.  If  it  is 
shown  that  the  note  in  suit  was  made  for  the  accommodation  of  the  payee, 
and  obtained  from  him  by  fraud,  the  plaintiff  must  then  prove  that  it  was 
transfered  to  him  for  value  before  maturity.  Hart  v.  Potter,  4  Duer  R.,  458. 

«4   JoLn.  R.,267. 

•  Whitaker  v.  Brown,  16  Wend.  R.,  505. 

7  Onondaga  County  Bank  v.  De  Puy,  17  Wend.,  47;  15  Mass.  R.,  75,  331;  5 
Cowen,  710.  The  general  partner  has  authority  to  bind  his  firm  in  such  mat- 
ters. Church  v.  Sparrow,  6  Wend.,  223. 


PARTIES.  107 

the  firm  is  liable  thereon  if  he  procures  them  to  be  discounted 
as  the  paper  of  the  concern;  and  his  representations,  as  well 
as  his  acts,  are  binding  upon  his  copartners,  i  But  in  such  a 
case  the  notes  signed  by  him  prima  facie  bind  only  himself, 
especially  where  he  also  carries  on  business  on  his  own 
account.  2 

The  general  rule  is  that  a  dormant  or  secret  partner,  whose 
name  does  not  appear,  is  bound  by  notes  made  or  bills  drawn, 
accepted  or  indorsed  by  one  of  the  partners  in  the  name  of  the 
firm;  both  when  they  are  negotiated  for  the  benefit  of  the 
firm,  and  when  given  under  such  circumstances  as  to  bind  the 
firm.  3  But  under  our  law  of  limited  partnerships,  an  indi- 
vidual, called  a  special  partner,  is  allowed  to  have  an  interest 
in  the  profits  of  a  particular  business,  without  incurring  any 
other  hazard  than  that  of  losing  the  sum  which  he  has  con- 
tributed to  the  common  stock.  To  secure  this  immunity,  the 
partnership  must  be  formed  and  published  in  a  particular 
manner,  and  the  special  partner  must  contribute  in  cash  some 
portion  of  the  capital  stock,  must  observe  the  requirements  of 
the  statute,  and  must  not  engage  personally  in  the  business.  4 

1  U.  S.  Bank  v.  Binney,  5  Mason,  176;  1  Denio,  405,  471,  481,  6  Hill,  322; 
Mifflin  v.  Smith,  17  Serg.  and  R.,  165;  6  Pick.,  11;  9  id.  272. 

'Manufacturers'  &c.  Bank  v.  Winship,  5  Pick. ,11;  Scott  v.  Colmesnil,  7 
J.  J.  Marsh,  416. 

,  Vere  v.  Ashly,  10  Barn,  and  Cres.,  288;  7  Eart,  210. 

4  2  R.  S.  of  New-York,  3d  ed.,  49-52.    See  session  laws  of  1857.  p.  836. 

By  th«  amendment  of  1857,  "  every  alteration  which  shall  be  made  in  the 
names  of  the  partners,  in  the  nature  of  the  business,  or  in  the  capital  or  shares 
thereof,  or  in  any  other  matter  specified  in  the  original  certificate,  and  the 
death  of  any  partner,  whether  general  or  special,  shall  be  deemed  a  dissolu- 
tion of  the  partnership,  and  every  such  partnership  which  shall  in  any  mantuT 
be  carried  on  after  any  such  alteration  shall  hare  been  made,  or  such  death 
shall  have  occurred,  shall  be  deemed  a  general  partnership  in  respect  to  all 
business  transacted  after  such  alteration  or  death,  unless  renewed  as  a  special 
partnership,  according  to  the  provisions  of  the  last  section." 

The  above  takes  its  place  in  the  Revised  Statutes  as  section  twelve,  and 
section  seventeen  is  amended  so  as  to  read  as  follows  : 

"  A  special  partner  may  from  time  to  time  examine  into  the  state  and  pro- 
gress of  the  partnership  concerns,  and  may  advise  as  to  their  management;  he 
may  also  loan  money  to,  and  advance  and  pay  money  for  the  partnership,  and 
may  take  and  hold  the  notes,  drafts,  acceptances  and  bonds  of  or  belonging  to 
the  partnership,  as  security  for  the  repayment  of  such  moneys  and  interest, 


108  BILLS  OF  EXCHANGE  AND   PROMISSORY  NOTES. 

By  engaging  in  the  business  of  the  firm,  he  violates  one  of  the 
conditions  on  which  his  exemption  from  liability  depends, 
and  from  that  moment  he  becomes  a  general  partner  by  his 
own  voluntary  act.  And,  it  seems,  that  every  intentional 
violation  of  the  statute  by  the  special  partner,  defeating  the 
policy  of  the  law,  will  accomplish  the  same  result,  and  render 
him  responsible  equally  with  the  other  partners,  i  Slight 
departures  from  the  letter  of  the  statute,  where  there  is  mani- 
festly no  intention  to  disregard  the  terms  and  substance  of  the 
act,  will  not  convert  the  special  into  a  general  partner;  such 
as  a  mistake  in  spelling  his  name,  or  a  little  delay  in  publish- 
ing the  notice  required.  2  But,  though  a  substantial  compli- 
ance with  the  requirements  of  the  statute  is  sufficient,  without 
regard  to  mere  defects  of  form,  if  there  be  a  mistake  in  the 
notice  as  to  the  amount  of  the  capital  contributed,  it  is  a  fatal 
defect;  and  the  associates  will  be  held  liable  as  general  part- 
ners. 3  Whoever  desires  to  avail  himself  of  the  advantages 
resulting  from  the  statute,  must  also  assume  the  burdens 
which  it  imposes  j  if  the  firm  becomes  insolvent  or  makes  an 

1  The  Madison  County  Bank  v.  Gould,  5  Hill,  309. 

'Bowen  v.  Argall,  24  Wend.,  496. 

1  Smith  v.  Argall,  6  Hill,  479.  The  notice  in  one  of  the  papers,  evidently 
by  mistake,  stated  the  capital  contributed  &ifive  instead  of  two  thousand  dol- 
lars. Held  a  failure  to  comply  with  the  requirements  of  the  statute. 

and  may  use  and  lend  his  name  and  credit  as  security  for  the  partnership  in 
any  business  thereof,  and  shall  have  the  same  rights  and  remedies  in  these  res- 
pects as  any  other  creditor  might  have.  He  may  also  negotiate  sales,  pur- 
chases and  other  business  for  the  partnership ;  but  no  business  so  negotiated 
shall  be  binding  upon  the  partnership  until  approved  by  a  general  partner. 
Excepting  as  herein  mentioned,  he  shall  not  transact  any  business  on  account 
of  the  partnership,  nor  be  employed  for  that  purpose,  as  agent,  attorney  or 
otherwise.  If  he  shall  interfere  contrary  to  these  provisions  he  shall  be 
deemed  a  general  partner." 

The  following  takes  the  place  of  section  twenty-three: 

"  In  case  of  the  insolvency  or  bankruptcy  of  the  partnership,  no  special 
partner  shall,  except  for  claims  contracted  pursuant  to  section  seventeen, 
under  any  circumstances,  be  allowed  to  claim  as  a  creditor,  until  the  claims  of 
all  the  other  creditors  of  the  partnership  shall  be  satisfied." 

The  above  amendments  apply  to  existing  as  well  as  to  subsequently  formed 
partnerships. 


PARTIES,  109 

assignment,  the  special  partner  can  receive  nothing,  even  as 
an  indorser  of  its  paper,  until  its  debts  be  first  paid.  1 

Becoming  insolvent,  the  assets  of  the  firm  is  a  trust  fund 
for  the  benefit  of  all  the  creditors;  and  where  a  bill  is  filed 
against  the  concern,  alleging  their  insolvency,  a  debt  due  to 
the  complainants,  that  suits  have  been  commenced  against 
them,  and  an  apprehension  that  some  creditors  may  obtain  a 
preference  over  others,  the  court  will  intervene  and  appoint  a 
receiver  of  the  property.  2  In  making  distribution  of  the 
fund,  equality  is  justice,  and  all  the  creditors  except  the  special 
partner  must  stand  on  the  same  footing.  At  the  expiration  of 
the  term  for  which  it  was  formed,  no  formal  notice  of  dissolu- 
tion is  necessary;  and  the  creditors  of  the  concern  at  that 
time  are  entitled  to  a  preference  over  bodafide  holders  of  notes 
issued  subsequently  by  the  general  partners,  in  the  name  of 
the  firm.  3 

Independent  of  the  statute,  the  actual  though  secret  part- 
ner is  liable  on  the  notes  and  bills  issued  by  the  firm ;  but 
where  bills  having  been  negotiated  by  the  firm  and  the  pro- 
ceeds applied  to  the  benefit  of  its  members,  a  dormant  partner 
was  taken  into  the  concern  and  the  articles  of  copartnership 
antedated,  it  was  held  that  the  incoming  partner  was  not 
liable  on  them;  that  he  could  not  be  charged  on  the  ground 
of  interest,  since  he  derived  no  benefit  from  the  bills;  nor  on 
the  ground  of  credit  having  been  given  to  him,  because  he 
was  not  a  member  of  the  firm  at  the  time;  nor  on  the  ground 
of  having  ratified  the  acts  of  his  copartners,  because  there 
can  be  no  ratification  where  there  is  no  assumed  authority.  4 
Until  the  partnership  be  in  fact  formed,  neither  party  can  be 
bound  by  the  acts  of  the  firm;  nor  can  a  person  about  to  enter 
into  a  partnership,  borrow  the  requisite  capital,  and  afterwards 

1  Mills  v.  Argall,  6  Paige  Ch.  R.,  677.  Such  *  firm  can  make  no  preference 
in  an  assignment  of  one  debt  over  another,  and  it  seems  questionable  whether 
it  can  make  any  assignment  at  all.  See  statute  of  1857,  modifying  the  former 
•Utute. 

•  Whitewright  v.  Stimpson,  2  Barb.  S.  C.  R.,  879;  7  Paige,  683. 

1  Haggerty  v.  Taylor,  10  Paige,  261. 
10  Barn,  and  Ores.,  288. 


110  BILLS  OF  EXCHANGE  AND   PROMISSORY  NOTES. 

accept  a  bill  of  exchange  drawn  by  the  lender  in  the  name  of 
the  firm  so  as  to  bind  his  associates  ;  for  this  is  a  fraud  on  the 
concern,  i 

At  common  law,  real  estate  purchased  for  partnership  uses, 
or  taken  by  the  firm  in  the  payment  of  debts,  vests  in  the 
partners  as  joint  tenants  ;->  under  the  statutes  of  this  state 
they  become  tenants  in  common  of  the  legal  title.  3  When 
purchased  with  partnership  funds,  it  is  in  equity  chargeable 
with  the  debts  of  the  concern,  and  is  regarded  as  joint  pro- 
perty between  the  parties  themselves,  for  the  equitable  adjust- 
ment of  their  mutual  claims;  in  other  respects  it  is  treated 
like  any  other  real  estate.  4  That  is  to  say,  the  creditors  of 
the  firm  may  reach  it  for  the  payment  of  partnership  debts 
whenever  it  has  been  acquired  or  paid  for,  by  the  property  or 
money  of  the  company.  5  But  strictly  speaking,  it  is  part- 
nership property  only  when  it  is  purchased  by  their  joint 
funds  and  used  in  their  common  business,  under  such  cove- 
nants and  agreements  as  will  make  it  in  fact  a  joint  property. 
If  it  appear  simply  that  the  property  has  been  conveyed  to 
them  by  name,  they  are  tenants  in  common,  and  not  partners, 
in  the  land;  for  the  principles  and  rules  of  law  applicable  to 
partnerships,  and  which  govern  and  regulate  the  disposition 
of  partnership  property,  do  not  apply  to  real  estate.  On  a 
sale,  each  partner  conveys  his  own  interest  in  the  premises, 
and  is  immediately  entitled  to  his  share  in  the  proceeds.  6 

In  like  manner,  where  the  owners  of  a  ship  freight  her 
together,  each  buying  on  his  own  account  a  proportion  of  the 
cargo  equal  to  his  share  in  the  vessel,  without  distinguishing 

Green  v.  Deakin,  2  Stark  R.,  247. 

Buchan  v.  Sumner,  2  Barb.  Ch.  R.,  165. 

Baker  v.  Wheeler,  8  Wend.  R.,  505;  Coles  v.  Coles,  15  John.  R.,  160. 

Smith  v.  Tarlton,  2  Barb.  Ch.  R.,  336. 

Cox  v.  M'Burney,  2  Sand.  S.  C.  R.,  561. 

15  John.  R  160;  9  Ves.  Jun.,  500;  8  Cowen,  304,  168;  8  Wend.,  505. 
Where  two  persons  are  partners  in  the  business  of  nurturing  trees  and  plants 
for  sale,  and  use  the  land  of  one  of  them  for  that  purpose,  the  trees  and  plants 
are  personal  property  as  between  them,  and  also  as  to  third  persons  who  have 
notice  of  the  facts.  King  v.  Wilcomb,  7  Barb.,  263. 


PARTIES.  Ill 

his  goods  by  any  particular  marks,  from  the  rest,  and  the 
voyage  is  prosecuted  and  the  whole  cargo  sold  at  the  place  of 
destination,  on  the  account  and  for  the  benefit  of  all  the  par- 
ties; it  is  not  a  partnership  transaction,  for  it  terminates  with 
the  sale  and  there  is  no  mutual  agreement  to  share  jointly  in 
the  profits  and  loss  of  the  adventure.  And  though  one  of  the 
parties  goes  with  the  vessel  as  agent  or  supercargo,  and  invests 
the  proceeds  of  the  sale  in  a  return  cargo,  the  interests  of  the 
parties  remain  all  the  while  separate  and  distinct,  each  being 
the  absolute  owner  of  his  respective  proportion  of  the  cargo,  i 
If  driven  by  stress  of  weather  into  another  port,  the  super- 
cargo may  sell  the  cargo,  but  if  he  does  and  receives  bills  of 
exchange  for  the  same,  they  are  the  property  of  the  parties  in 
proportion  to  their  interests  in  the  goods  sold.  To  be  sure, 
there  is  here  a  joint  ownership  of  property,  purchased  for  the 
same  purpose  and  subjected  to  the  same  risk,  so  that  of  neces- 
sity each  must  share  in  the  loss  or  profit  of  this  single  and 
particular  transaction.  But  there  being  no  agreement  to  share 
in  the  ultimate  profit  and  loss  of  the  business,  and  each  being 
the  absolute  owner  of  a  certain  proportion,  the  parties  are  no 
more  partners  than  they  would  be  as  the  owners  of  the  vessel. 
And  therefore  neither  party  can  bind  the  other  by  the  accept- 
ance of  bills,  or  by  making  and  indorsing  notes  without  an 
express  authority  to  do  so.  2 

After  the  dissolution  of  a  copartnership,  neither  partner 
has  any  authority  to  bind  his  former  partners  by  giving  a 
promissory  note  in  the  name  of  the  firm ;  3  the  act  of  dissolu- 
tion is  a  revocation  of  all  authority  to  act  for  and  contract  in 
the  name  of  the  company.  During  the  continuance  of  the 
partnership  he  is,  as  we  have  seen,  entitled  to  act  for  all,  as 
their  general  agent;  on  dissolution,  he  ceases  to  hold  that 
character,  and  must  be  considered  as  a  mere  joint  debtor,  with 

1  Post  T.  Kimberly,  9  John.  R.,  470;  Holme*  T.  U.  S.  Ins.  Co.,  2  J.,hn. 
CM.,  829. 

1  Ex  parte  Peele,  6  Ves.,  604;  Williams  v.  Thomas,  Hunter  and  Latham,  6 
Esp.  R.,  18;  5  id.,  122. 

'  National  Bank  T.  Norton,  1  Hill,  572;  Mitchell  r.  Ostrom,  2  Hill,  520. 


112  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

little  or  no  implied  power  from  them  in  the  adjustment  and 
closing  up  of  the  business,  i 

There  are  various  ways  in  which  a  partnership  may  be  dis- 
solved :  it  is  dissolved  when  the  term  agreed  upon  runs  out; 
by  the  act  and  mutual  consent  of  the  parties;  and  by  the 
death,  insanity  or  bankruptcy  of  either  of  the  partners,  or  by 
any  public  event  that  arrests  the  business  which  it  was  formed 
to  carry  on.  2  If  formed  for  an  indefinite  period,  either  part- 
ner may  withdraw  at  any  time  he  sees  fit,  and  publish  a  notice 
of  dissolution.  3  So  far  as  his  responsibility  to  the  public  or 
to  third  persons  is  concerned,  he  has  an  indefeasible  right  to 
dissolve  the  partnership,  though  formed  for  a  term  of  years 
yet  unexpired,  and  he  may  do  so  by  publishing  his  own 
volition  to  that  effect.  He  may  not  have  the  legal  right  to 
end  the  partnership  as  between  himself  and  his  associates, 
but  it  is  difficult  to  perceive  upon  what  principle  he  can  be 
prevented  from  doing  so,  if  he  choose  to  take  the  consequen- 
ces of  an  action  for  the  breach  of  his  covenant.  The  power 
given  by  one  partner  to  another,  to  make  joint  contracts  for 
them  both,  is  in  its  very  nature  a  revocable  power,  4  and  it 
may  be  withdrawn,  so  as  to  terminate  the  right  of  his  asso- 
ciates to  bind  him  by  the  execution  of  future  contracts. 

An  act  of  bankruptcy  followed  by  the  commission  and 
assignment  by  one  of  the  partners,  as  it  is  held  in  England, 
operates  as  a  dissolution,  because  it  severs  the  unity  of  interest 
between  the  parties.  5  And  in  this  state  it  has  been  adjudged 
that  a  voluntary  assignment  made  by  one  of  the  partners  of 
all  his  interest  in  the  copartnership  stock,  produces  the  same 
result;  notwithstanding  the  articles  between  them  provide 
that  the  partnership  is  to  continue  until  two  of  the  contract- 

1  Bell  v.  Morrison,  1  Peters'  R.,  351,  367,  374. 

*  Griswold  v.  Waddington,  15  John.  R.,  57;  S.  C.,  16  John.,  438.    A  firm 
exists  between  an  American  citizen  and  an  English  subject;  war  breaking  out 
between  the  two  countries  renders  all  intercourse  between  them  unlawful,  and 
dissolves  the  partnership.     See  3  Kent  Com.,  53. 

1  Peacock  v.  Peacock,  16  Vesey,  49. 

4  Skinner  v.  Dayton,  19  John.  R.,  513,  per  Platt,  Justice. 

*  Fox  v.  Hanbury,  Cowp.  448;  Hague  v.  Rolleston,  4  Burr.  2174;  5  Ves. 
295. 


PARTIES.  113 

ing  parties  shall  demand  a  dissolution,  and  the  assignment  is 
made  without  their  consent,  i  Such  a  transaction  assumes 
the  right  to  retire  from  the  concern,  and  implies  the  right  to 
close  the  business  in  spite  of  all  stipulations  to  the  contrary. 
Permanent  derangement  of  mind  in  one  of  the  partners, 
does  not  in  itself  work  a  dissolution ;  but  it  is  ground  for  a 
decree  dissolving  the  partnership.  2  So  also,  the  marriage  of 
a  feme  sole  partner  operates  as  a  dissolution  of  the  firm, 
because  it  vests  her  personal  property  in  the  husband,  at  his 
election  to  reduce  it  into  his  own  possession,  and  deprives  her 
of  the  legal  capacity  to  carry  on  business.  3  Whatever  severs 
the  unity  of  interest  in  the  concern  ends  the  partnership; 
thus,  if  a  sheriff  levies  upon  and  sells  the  interest  of  one  of 
the  partners  in  a  firm  to  a  third  person,  the  partnership  is 
terminated ;  i  and  so  if  one  of  two  persons  who  are  tenants 
in  common  of  certain  lands,  and  partners  in  the  business  of 
farming  them,  conveys  his  moiety  of  the  premises  to  a  third 
person,  it  is  adjudged  that  the  conveyance  works  a  dissolution 
of  the  partnership.  5 

As  soon  as  the  partnership  is  dissolved,  no  matter  in  what 
manner  it  is  done,  the  right  of  each,  as  we  have  said,  to  bind 
the  firm  by  contracting  in  its  name,  ceases;  and  neither  of 
them  after  that  has  any  authority  to  issue  notes  in  the  name 
of  the  firm.  6  But  in  order  to  prevent  the  misuse  of  the  part- 
nership name,  it  is  necessary  that  a  notice  of  the  dissolution 
should  be  published,  and  that  it  should  be  brought  home  to 
all  such  as  have  had  previous  dealings  with  the  house.  If 
this  is  not  done,  and  one  of  them,  usurping  a  right  which  the 
law  does  not  give  to  him,  signs  and  issues  notes  in  the  name 
of  the  firm  to  a  person  ignorant  of  the  dissolution,  the  copart- 
ners will  be  bound  by  his  act,  on  the  principle  that  he  still 

1  Marquand  v.  N.  T.  Mar  Company,  17  John  R.,  526. 
'  Wrexham  v.  Hudleston,  1  Swanst.,  614;  Pearce  T.  Chamberlain,  2  Yea., 
85;  Sayer  v.  Bennett,  1  Cox,  107. 
'  Nerot  T.  Burnaud,  4  Rusa.,  260. 

*  8  Kent.  Com.,  69,  4  ed. 

•  Mumford  T.  McKay,  8  Wend.  R.,  442,  and  cases  there  cited. 
•Lansing  v.  Gaine,  2  John.  R.,  300. 


114  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

appears  before  the  world  as  a  partner  in  the  concern,  i  The 
notice,  though  not  necessary  to  revoke  the  authority  to  con- 
tract, is  material  for  the  purpose  of  preventing  third  persons 
from  being  induced  to  enter  into  contracts  with  the  firm,  in 
the  belief  that  it  is  still  in  existence.  2 

The  object  of  the  notice  being  accomplished,  the  form  in 
which  it  is  given  is  of  no  importance;  it  may  be  inferred  by 
a  jury  from  facts  and  circumstances;  3  and  it  may  be  rebutted 
by  the  conduct  of  the  parties,  there  being  no  formal  and 
actual  notice  given  to  the  persons  with  whom  they  have  had 
dealings.  4 

Though  the  partnership  expire  by  the  terms  of  its  own 
limitation,  the  partners  are  bound  to  give  notice  of  dissolu- 
tion, if  they  desire  to  prevent  each  other  from  contracting  in 
the  name  of  the  company.  5  The  reason  for  this  is  obvious  : 
it  is  not  usual  in  the  commencement  of  a  general  partnership 
to  publish  the  articles  of  agreement  or  to  specify  the  time  for 
which  it  is  to  continue;  and  hence  the  public  have  no  means 
of  knowing  when  the  business  is  to  be  closed.  As  to  special 
partnerships,  the  rule  is  different,  because  here  the  terms, 
and  the  time  of  its  continuance,  are  to  be  published  at  the 
commencement  of  business,  and  every  person  whether  dealing 
with  the  firm,  or  otherwise,  isj>resumed  to  have  notice  of  the 
termination  of  the  copartnership;  so  that  no  formal  notice  of 
the  dissolution  is  necessary  to  be  given,  to  prevent  any  of  the 
general  partners  from  charging  the  copartnership  with  new 
debts  contracted  after  its  termination.  6  For  a  reason  some- 
what similar,  a  dormant  partner  whose  name  has  never  been 
used  in  the  firm,  and  who  has  not  been  known  to  the  con- 

1  Van  Eps  v.  Dillaye,  6  Barb.  S.  C.  R.,244. 

*  Ketchum  &.  Black  T.  Clark,  6  John.  R.,  144. 

'  Coddington  v.  Hunt,  6  Hill.  596. 

4  6  John.  R.,  144. 

8  Idem. 

6  Haggerty  v.  Taylor,  10  Paige  Ch.  R.,  261.  But  if  the  partnership  he  con- 
tinued without  any  special  notice  heing  again  published  after  the  term  has  ex- 
pired, the  special  becomes  a  general  partner. 


PARTIES,  115 

tracting  parties  as  a  partner  in  the  business,  need  not  prove 
any  notice  of  his  retirement,  i 

The  law  on  the  subject  is  stated  by  Chief  Justice  Jewett  in 
these  terms :  "  The  general  principle  is,  that  where  a  person 
has  done  business  with  another,  as  a  member  of  a  firm,  or  has 
so  publicly  appeared  as  a  partner  as  to  satisfy  a  jury  that  the 
plaintiff  must  have  believed  him  to  be  such,  and  he  suffers 
the  plaintiff  to  continue  in  and  act  upon  that  belief,  by  omit- 
ting to  give  notice  of  his  having  ceased  to  be  a  partner,  after 
he  really  had  ceased,  he  will  be  responsible  for  the  conse- 
quences of  his  original  representation,  uncontradicted  J>y  a 
subsequent  notice.  An  omission  to  give  such  person  notice, 
under  such  circumstances,  of  his  retirement,  is  held  to  be 
equivalent  to  a  continual  representation  that  he  still  remains 
a  member  of  the  firm.  But  in  order  to  render  him  liable  on 
this  ground,  it  is  necessary  that  he  should  have  been  known 
as  a  member  of  the  firm  to  the  plaintiff,  either  by  direct  tran- 
sactions or  public  notoriety."  2 

The  usual  practice  is  to  publish  a  notice  of  the  dissolution 
in  one  or  more  newspapers  of  the  city  or  county  where  the 
business  has  been  carried  on;  and  this  is  sufficient  notice  to 
all  persons  who  have  had  no  previous  dealings  with  the  firm.  3 
But  the  authorities  in  this  country  do  not  hold  that  this  is  the 
only  way  in  which  such  a  notice  may  be  given.  On  the  con- 
trary, they  hold  that  the  manner  of  giving  the  notice  and 
making  known  the  dissolution  is  not  at  all  material,  so  that  it 
be  done  in  some  reasonable  and  sufficient  manner.  4 

As  to  persons  in  the  habit  of  dealing  with  the  firm,  public 
notice  is  not  sufficient;  it  must  be  communicated  to  them 
personally,  or  brought  home  to  their  actual  knowledge.  But 
it  is  enough  if  the  notice  reach  the  parties  for  whom  it  was 
intended,  though  it  be  not  in  form  presented  to,  or  served 

1  Davis  v.  Allen,  3  Comst.  R.,  168;  Carter  r.  Whalley,!  Barn.andAdol.il; 
Armstrong  v.  Hussey,  12  Serg.  and  Rawle,  815;  1  II ill,  578. 

*  8  Cotnst.,  172;  1  Barn,  and  Adol.,  11. 

*  Graves  v.  Mery,  6  Cowen  R.,  701 ;  2  John.  R.,  304;  6  Mason  R.,  56;  Pren- 
tiss  T.  Sinclair,  5  Verm.  R.,  149. 

4  6  John.  R.,  148;  6  Cowen,  701;  Graham  v.  Hope,  Peake  N.  P.  Cas.,  264. 


116  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

upon  them,  i  The  question  usually  comes  up  as  one  of  fact, 
to  be  found  by  a  jury,  whether  or  not  actual  notice  has  been 
given,  or  the  fact  of  dissolution  communicated  to  the  party 
sought  to  be  charged  with  notice.  2  Thus,  where  the  part- 
nership had  been  for  some  time  dissolved,  and  the  partners 
had  in  the  interval  carried  on  business  in  different  streets  of 
the  same  town,  each  under  his  own  individual  name;  it  was 
held,  that  such  facts  were  sufficient  to  warrant  the  jury  in 
finding  that  the  old  business  acquaintances  of  the  defen- 
dants knew  of  the  dissolution.  3  And  so,  where  it  is  shewn 
that  the  notice  was  published  in  a  particular  newspaper,  and 
that  paper  taken  and  habitually  read  by  the  party  sought  to 
be  charged  with  actual  knowledge;  these  circumstances  are 
sufficient  to  authorize  the  jury  in  finding  actual  notice,  4  But 
where  a  bank  is  entitled  to  notice,  it  is  not  sufficient  to  shew 
that  the  institution  took  the  paper  in  which  it  was  published, 
and  that  one  of  the  directors  knew  of  the  dissolution,  unless 
it  be  also  shewn  that  he  was  intrusted  with  some  agency  in 
relation  to  the  business  in  question;  for  the  director  is  not  a 
general  agent  of  the  bank,  nor  is  it  chargeable  with  knowledge 
of  every  fact  that  may  be  known  to  any  member  of  its  board 
of  directors.  5 

The  safest  course  undoubtedly  is  to  send  a  circular,  or  in 
some  other  way  give  actual  notice  of  the  dissolution,  to  those 
with  whom  the  house  has  had  dealings.  The  retiring  partner 
knows  or  has  the  means  of  knowing,  who  these  persons  are; 
and  inasmuch  as  he  has  by  transacting  business  with  them, 
obtained  a  credit  for  the  firm  on  the  joint  responsibility  of  all 
its  members,  justice  requires  that  the  severance  of  the  united 
credit  should  be  made  as  notorious  as  was  the  union  itself. 
This  is  accomplished  by  the  rule  that  persons  having  had 

1  Parkin  v.  Carruthers,  3  Esp.  Cas.,  248;  6  John.  R.,  148-  6  Cowen,  706; 
Wardwell  v.  Haight,  2  Barb.,  549;  1  Hill  R.,  573;  10  Pick.,  402;  6  Barb.,  244; 
6  Hill,  595;  6  Barb.,  244;  Vernon  v.  The  Manhattan  Co.,  22  Wend.,  183. 

a  1  Hill  R.,  577,  and  cases  there  cited. 

'  Coddington  v.  Hunt,  6  Hill,  595. 

4  Bank  of  South  Carolina  v.  Humphreys,  1  McCord,  388;  Martin  v.  "Walton, 
id.  16;  10  Pick.,  402. 

*  Vernon  v.  The  Manhattan  Co.,  17  Wend.  R.,  524;  22  id.  S.  C.,  183. 


PARTIES.  117 

particular  dealings  with  the  firm,  should  have  particular  notice 
of  the  dissolution  or  alteration;  but  that  a  general  notice  by 
advertisement  or  otherwise,  should  be  sufficient  for  those  who 
know  the  firm  only  by  general  reputation.  This  is  no  more 
than  saying,  that  a  credit  already  raised  on  the  faith  of  the 
partnership  is  presumed  to  be  continued  on  the  same  footing, 
until  a  special  notice  of  a  change  is  given,  i  Consequently,  a 
note  given  in  the  partnership  name,  the  next  day  after  a  disso- 
lution, binds  the  former  partners,  and  it  is  no  ground  of 
objection  to  their  liability,  that  there  has  not  been  time  to 
give  or  publish  the  notice.  2 

The  rule  requiring  actual  notice  to  "  dealers  or  customers," 
includes  among  that  class,  a  bank  at  which  the  paper  of  the 
firm  has  been  discounted  or  frequently  renewed; 3  a  concern 
that  has  had  with  the  firm  only  two  previous  business  trans- 
actions, J  and  in  general  all  such  persons  as  have  had  business 
relations  with  them  by  which  a  credit  has  been  raised  in  favor 
of  the  partnership.  5 

The  partnership  having  been  dissolved  and  the  proper  notices 
thereof  given,  the  presumed  agency  of  each  partner  to  bind 
the  firm  while  acting  within  the  scope  of  the  business,  is 
thereby  revoked,  except  as  to  such  things  as  are  indispensable 
in  winding  up  the  concerns  of  the  company.  If  there  be  no 
agreement  to  the  contrary,  it  may  be  presumed  that  each  part- 
ner still  has  authority  to  dispose  of  the  partnership  property, 
to  collect,  adjust  and  pay  debts,  and  give  proper  acquittances. 
But  there  is  no  ground  for  presuming  a  power  to  make  new 
promises  or  engagements  in  the  name  of  the  firm,  even  though 
they  only  change  without  increasing  the  prior  obligation  of 
the  partners.  6  For  example,  one  partner  eannot  bind  his 
former  copartners  by  the  renewal  of  a  partnership  note,  unless 
a  power  of  renewal  has  been  expressly  delegated  to  him  at 

'22  Wend.,  191, 194. 

1  Bristol  v.  Sprague,  8  Wend.,  428. 

»  17  Wend.,  527;  22  Wend.,  191;  1  Hill,  5T2. 

4  Wardwell  v.  llaight,  2  Barb.  R..  649;  Clapp  v.  Rogers,  2  Kernan.  283. 

*  6  Cowen,  705 ;  2  Kernan,  288.    The  extent  or  the  previous  sales  or  dealings 
does  not  affect  the  question.     12  Barb.  R.,  64. 

•  Bell  v.  Morrison,  1  Peters'  R.,  851.  867,  874;  1  McCord.  488. 


118  BILLS   OF   EXCHANGE  AND   PROMISSORY  NOTES. 

the  time  of  the  dissolution.  1  And  a  power  to  settle  and 
adjust  the  concerns  of  the  firm,  does  not  carry  with  it  an 
authority  to  sign  an  account  stated,  to  indorse  or  to  renew  a 
note  in  the  name  of  the  partnership.  2  Neither  can  one  part- 
ner, after  a  dissolution,  bind  his  fellows  by  an  admission 
relating  to  partnership  transactions.  3 

The  rule  as  settled  in  England  is  that  an  admission,  as  by 
a  part  payment,  made  by  one  of  the  several  joint  makers  of  a 
promissory  note,  takes  the  case  out  of  the  statute  of  limita- 
tions as  to  all  the  others,  on  the  ground  that  "  payment  by 
one  is  payment  for  all,  the  one  acting  virtually  as  agent  for 
the  rest;  and  in  the  same  manner,  an  admission  by  one  is  an 
admission  by  all ;  and  the  law  raises  the  promise  to  pay^  when 
the  debt  is  admitted  to  be  due."  4  This  principle  applies,  of 
course,  to  the  conduct  of  partners  respecting  firm  debts;  for 
the  contracts  of  a  copartnership  are  always  joint,  and  the 
remedy  against  them  proceeds  upon  this  theory.  5  The  Eng- 
lish doctrine  has  been  adopted  in  this  country  to  some  extent;  6 
but  the  current  of  authorities  runs  in  a  contrary  direction. 
In  this  state  an  acknowledgment  and  promise  to  pay,  made  by 
one  of  the  partners  after  a  dissolution  of  the  partnership, 
will  not  revive  a  debt  against  the  firm  which  is  barred  by  the 
statute  of  limitations.  7 

1  National  Bank  v.  Norton,  I  Hill,  672. 

"Kilgour  v.  Finlyson,  1  H.  Black.,  155;  Mowatt  v.  Howland,  3  Day,  353; 
"White  v.  Union  Ins.  Co.,  1  Nott  and  McCord,  661;  Sandford  v.  Mickles,  4 
John.  R.,  224;  Abel  v.  Sutton,  3  Esp.  R.,  108,  111;  Martin  v.  Walton,  1 
McCord,  16;  Hackley  v.  Patrick,  3  John.  R.,  536. 

3  Walden  v.  Sherburne,  15  John.  R.,  409;  Baker  v.  Stackpoole,  9  Cowen, 
420. 

4  Whiteorab  v.  Whiting,  Doug.  652;  Lord  Tenterden's  act,  (9  G.  4.  c.  14,) 
is  similar  to  our  recent  code  requiring  a  new  promise  in  writing,  etc.     Code 
£  110. 

4  2  Denio  R.,  677. 

6  Cady  v.  Shepherd,  11  Pick.,  400;  Bridge  v.  Gray,  14  id.,  55;  Sigourney  v. 
Durry,  14  id.,  387,  391 ;  Vinal  v.  Burrill,  16  id.,  401 ;  and  Bond  v.  Lathrop,  4 
Conn.  R.,  336;  Coit  v.  Tracey,  8  id.,  268;  Austin  v.  Bostwick,  9  id.,  496;  17 
id.  511;  Parker  v.  Merrill,  6  Greenl.,  41;  Pike  v.  Warren,  15  Maine,  390;  21 
id.,  433;  22  id.,  497;  13  Vermont  R.,  363;  18  id.,  440. 

7  3  John.  R.,  636;  4  id.  224;  15  John  R.,  409;  Van  Keuren  v.  Parmelee,  2 
Comst.  R.,  523. 


PARTIES.  119 

In  North  Carolina  it  has  been  held  that  the  acknowledg- 
ment of  the  debt  by  one  partner,  though  after  the  dissolution, 
will  prevent  the  operation  of  the  statute,  i  In  Georgia  the 
same  rule  is  held,  provided  the  new  promise  is  made  before 
the  action  is  barred,  but  not  when  it  is  made  afterwards.  2 
In  South  Carolina  it  is  adjudged  that  a  promise  by  one  partner 
made  after  dissolution,  and  after  the  statute  had  run,  will  not 
charge  the  other  partner.  3  In  Tennessee  and  Pennsylvania, 
a  promise  by  one  partner,  after  the  dissolution  of  the  partner- 
ship, to  pay  a  note  made  by  the  firm,  does  not  take  the  case 
out  of  the  statute  of  limitations  as  to  the  other  partner.  4  It 
is  also  held  in  Indiana,  that  the  power  of  one  partner  to  bind 
the  other  by  the  admission  of  a  debt,  ceases  with  the  partner- 
ship; 5  in  Alabama,  that  a  promise  by  the  principal  debtor 
will  not  revive  the  demand  against  a  co-debtor,  who  is  a 
surety.  6  In  New  Hampshire  the  English  doctrine  has  been 
wholly  repudiated;  and  it  is  there  held  that  a  payment  by 
one  of  the  joint  makers  of  a  promissory  note  does  not  take 
the  case  out  of  the  statute  as  to  the  other.  7  In  the  supreme 
court  of  the  United  States,  the  law  on  the  subject  has  been 
laid  down  in  these  words  :  "  That  after  a  dissolution  of  the 
partnership  no  partner  can  create  a  cause  of  action  against 
the  other  partners,  except  by  a  new  authority  communicated 
to  him  for  that  purpose.  It  is  wholly  immaterial  what  is  the 
consideration  which  is  to  raise  such  cause  of  action,  whether 
it  be  a  supposed  pre-existing  debt  of  the  partnership,  or  any 
auxiliary  consideration,  which  might  prove  beneficial  to 
them.  Unless  adopted  by  them,  they  are  not  bound  by  it. 
When  the  statute  has  once  run  against  a  debt,  the  cause  of 
action  against  the  partnership  is  gone.  The  acknowledg- 

1  Mclntire  v,  Oliver,  2  Hawks,  209. 
'  Brewtter  v.  Hardtman,  Dudley,  188. 

•  Stecle  v.  Jennings,  1  McMullen,  297. 

4  Belote's  Ex'rs  v.  Wynne,  7  Yerger,  634;  Muse  v.  Donelson,  2  Humph., 
166;  Levy  v.  Cadet,  17  Serg.  and  R.,  126;  1  Pen.  and  Watts,  136. 

•  Tandes  v.  Lefavaur,  2  Blackf.,  871. 

•  Lowtber  v.  Chappel,  8  Alab.  R.,  858. 

1  Exter  Bunk  v.  Sullivan,  6  N.  Hamp.  R.,  124;  Wood  v.  Braddick,  1  Taunt. 
104. 


120  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

ment,  if  it  is  to  operate  at  all,  is  to  create  a  new  cause  of 
action;  to  revive  a  debt  which  is  extinct,  and  thus  to  give  an 
action,  which  has  its  life  from  the  new  promise  implied  by 
law  from  such  an  acknowledgment,  and  operating  and  limited 
by  its  purport.  It  is  then,  in  essence,  the  creation  of  a  new 
right,  and  not  the  enforcement  of  an  old  one.  We  think  that 
the  power  to  create  such  a  right  does  not  exist  after  a  disso- 
lution of  the  partnership  in  any  partner."  i 

After  the  dissolution,  the  partnership  is,  in  one  sense,  con- 
sidered as  determined,  but  in  another  as  continued,  until  the 
affairs  are  finally  settled;  so  that  notwithstanding  the  disso- 
lution either  of  the  partners  may  receive  payment  of  the 
debts  due  the  partnership,  and  give  discharge  on  receiving 
payment,  and  may  apply  the  partnership  funds  in  payment  of 
the  partnership  debts;  for  these  acts  are  in  discharge  of  the 
duties  of  the  partners  to  wind  up  the  whole  partnership  con- 
cerns, and  to  divide  the  surplus  among  them,  after  all  the 
debts  are  paid.  2  The  dissolution  does  not  ipso  facto  render 
the  partners  mere  tenants  in  common  of  the  choses  in  action 
and  other  property  of  the  firm.  The  community  of  interest 
between  the  partners,  and  the  partnership  still  continues  for 
the  purpose  of  collecting  and  paying  debts,  with  all  the  inci- 
dents which  belong  to  that  relation.  3 

After  a  dissolution  of  the  partnership  it  has  been  held  that 
all  the  partners  must  join  in  the  transfer  of  a  partnership 
security,  such  as  a  draft  or  promissory  note,  in  order  to  vest 
the  title  in  the  transferee.  4  However,  it  is  clear  that  either 
of  the  partners,  in  the  absence  of  any  special  agreement  as  to 
who  shall  close  up  the  business,  may  collect  such  demands 

1  Bell  v.  Morrison,  1  Peters'  U.  S.  C.,  351.  The  court  in  this  case  followed 
the  decisions  of  Kentucky,  in  conformity  with  its  usual  practice  to  follow  the 
local  law  and  administer  the  same  justice  which  the  state  court  would  admin- 
ister between  the  same  parties;  the  cause  having  come  up  froip  the  Circuit 
Court  in  Kentucky. 

*  19  John.  R.,  143;  King  v.  Smith,  4  Car.  and  Payne,  10^ 

3  Murray  v.  Mumford,  6  Cowen,  441;  ex  parte  Williams,  11  Ves.,  6,  per 
Lord  Eldon. 

4  Sandford  v.  Mickles  &.  Forman,  4  John.  R.,  224;  Geortner  v.  The  Trustees 
of  Canajoharie,  2  Barb.  R.,  625. 


PARTIES.  121 

and  apply  them  to  the  payment  of  the  partnership  debts;  and 
it  is  not  easy  to  state  a  reason  why  he  may  not  also  sell  such 
securities  for  money,  without  indorsing  them  so  as  to  render 
the  firm  liable;  since  this  is  only  a  shorter  mode  of  collecting 
and  realizing  such  choses  in  action,  belonging  to  the  firm. 

Where  a  fraud  is  practised  against  the  late  firm,  as  where 
one  of  the  partners  sells  a  draft  belonging  to  the  firm  in  order 
to  raise  money  to  pay  his  individual  debts,  and  this  fact  is 
known  to  the  person  purchasing  the  same,  the  transfer  is 
void,  i  But  it  is  void,  we  apprehend,  for  the  same  reason 
that  renders  invalid  a  sale  of  partnership  property  to  a  third 
person,  who  receives  it,  knowing  it  to  be  partnership  property, 
in  payment  of  his  individual  debt;  namely,  because  it  is  a 
fraud  upon  the  copartners.  2  In  the  absence  of  all  fraud  on 
the  part  of  the  purchaser,  it  is  pretty  well  settled  that  one  of 
a  firm,  acting  in  good  faith  during  its  continuance,  can  convey 
or  pledge  all  the  partnership  effects  directly  to  a  creditor,  in 
payment  or  for  the  security  of  a  debt  due  from  the  company.  3 
This  is  different  from  the  act  of  making  a  general  assign- 
ment. 4 

When  a  partnership  is  dissolved  by  the  personal  insolvency 
of  some  of  its  members,  the  solvent  partners  do  not  become 
legally  vested  with  the  title  to  the  partnership  assets,  as  do 
the  surviving  partners  where  it  has  been  dissolved  by  death. 
But  in  such  a  case  the  practice  is  to  appoint  the  solvent  part- 
ners receivers  for  the  purpose  of  closing  the  business; 5  and 
when  this  is  done,  he  would  probably  be  entitled  to  a  com- 
pensation for  his  services  as  receiver  in  the  premises;  but  he 
is  not  allowed  any  compensation  as  a  partner  in  settling  the 

'  2  Barb.  R.,  626. 

•  Dob  v.  Halsey,  16  John.  R.,  84. 

1  Egberts  v.  Wood,  3  Paige,  617;  Harrison  v.  Sterry.  5  Cranch,  289;  Piorson 
T.  Hooker,  3  John.  R.,  68;  Mabbett  v.  White,  2  Kernan  R.,  442.  and  cases 
there  cited. 

4  Deming  T.  Colt,  and  Hayes  T.  Heyer,  8  Sand.  R.,  284;  see  8  Ducr  R.,  1. 

'  Hubbard  v.  Guild,  1  Duer  R..  662. 

6 


122  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

affairs  of  the  firm,  unless  there  is  a  special  agreement  to  that 
effect,  i 

When  a  partnership  is  dissolved  by  death,  the  surviving 
partner  is  entitled  to  all  the  choses  in  action,  property,  and 
evidences  of  debt  belonging  to  the  firm;  and  has  the  right  to 
the  exclusive  custody  and  control  of  them.  The  law  vests  in 
him  the  title  to  all  the  joint  property,  and  renders  him  liable 
for  the  copartnership  debts  in  an  action  at  law  against  him  as 
the  surviving  partner.  This  is  on  the  ground  that  such  debts 
are  joint,  and  not  joint  and  several;  and  that  upon  the  death 
of  a  partner,  the  creditor  of  the  firm,  unless  he  holds  the 
joint  and  several  security  of  the  partners,  has  no  immediate 
claim  on  the  deceased  partner's  estate,  as  a  separate  creditor 
of  that  partner.  2  The  law  gives  to  the  creditors  of  the  part- 
nership a  preference  over  individual  creditors  in  their  right 
to  satisfaction  out  of  the  property  of  the  firm;  but  does  not 
permit  them  to  proceed  against  the  estate  of  the  deceased 
partner  until  they  have  exhausted  all  legal  remedies  against 
the  survivor.  3  In  other  words,  the  partnership  fund  is  by 
law  appropriated  to  the  creditors  of  the  firm,  and  they  ought 
to.  shew  that  it  is  exhausted  before  they  can  resort  to  the 
estate  of  the  deceased  partner. 

In  some  cases,  as  where  it  is  shewn  that  the  surviving  part- 
ner is  insolvent,  a  court  of  equity  will  intervene  and  appoint 
a  receiver  of  the  partnership  effects,  and  enjoin  the  survivor 
from  interfering  with  the  affairs  of  the  firm.  4  Indeed,  where 
either  partner  has  the  right  to  dissolve  the  partnership,  and 
one  of  them  does  so,  and  they  are  not  able  to  agree  among 
themselves,  a  court  of  equity  will  as  a  matter  of  course,  appoint 
a  manager  or  receiver,  and  direct  him  to  apply  the  partnership 

1  Coursen  v.  Hamlin,  2  Duer,  513. 

A  sheriff  may  at  law  levy  upon  and  sell,  under  an  execution  against  one  of 
several  partners,  all  his  share  and  interest  in  the  concern;  and  the  purchaser 
thereupon  becomes  a  tenant  in  common  with  the  other  partners.  Philips  v. 
Cook.  24  Wend.,  389;  2  Hill  R  ,  47-60,  note. 

*  Lawrence  v.  Trustees  of  the  Leake  and  Watt's  Orphan  House,  2  L>enio  R., 
577. 

*  Long  v.  Keppele,  1  Binn.  123;  Caldwell  v.  Stileman,  1  Rawle,  212. 
4  Deveau  v.  Fowler,  2  Paige,  400;  id.  310;  2  Barb.  R.,  629. 


PARTIES.  123 

property  and  funds  to  the  payment  of  all  the  debts  of  the 
firm,  ratably,  without  giving  any  preference  to  the  favorite 
creditors  of  either  partner,  i 

At  law  the  surviving  partner  is  alone  answerable  for  the 
debts  of  the  firm.  2  And  when  he  dies  the  remedy  of  the 
creditors  of  the  copartnership  is  against  his  legal  representa- 
tive. 3  But  though  the  surviving  partner  has  the  legal  right 
to  the  partnership  effects,  and  is  answerable  in  that  capacity 
for  the  debts  of  the  firm;  in  equity  he  is  considered  merely 
as  a  trustee  to  pay  the  partnership  debts,  and  dispose  of  the 
effects  of  the  concern  for  the  benefit  of  himself  and  the  estate 
of  his  deceased  partner;  4  and  consequently,  the  creditors  of 
the  firm  have  a  right  to  such  relief  in  equity,  against  the 
representatives  of  the  deceased  partner,  only  when  they  aver 
and  prove  that  the  surviving  partners  are  insolvent.  5  That 
is  to  say,  they  have  a  right  to  proceed  against  the  estate  of  the 
deceased  partner  in  equity,  when  they  show  a  necessity  for 
doing  so;  and  the  representatives  of  the  deceased  partner  have 
a  right  to  insist  upon  the  application  of  the  firm  property  to  the 
payment  of  the  firm  debts.  And  the  rule  upon  the  subject  is 
that  the  partnership  creditors  are  entitled  to  a  priority  of  pay- 
ment out  of  the  partnership  effects,  and  the  separate  creditors 
of  the  individual  partners  may  claim  a  priority  of  payment 
out  of  their  separate  effects.  6 

1  Law  r.  Ford,  2  Paige,  310.  The  case  assumes  that  there  was  no  stipula- 
tion in  the  articles  of  copartnership  providing  for  the  closing  np  of  their  con- 
cerns. 

*  Ponton  T.  Stanway,  5  East,  281 ;  Grant  T.  Shorter,  1  Wend.,  148. 

*  Calder  r.  Rutherford,  3  Brod.  and  B.,  302;  Richards  T.  Heather,  1  Barn, 
and  Aid.,  29. 

4  Case  T.  Abeel,  1  Paige.  898;  Egberts  r.  Wood,  8  id.  617. 

*  Wilder  T.  Keeler,  8  Paige,  167;  2  Denio  R.,  677;  6  id.  256. 

*  Taylor  r.  Fields,  4  Yes.  R.,  896;  1  Harris  and  Gill  R.,  96;  8  Paige  R.,  518. 


CHAPTER   III. 

FORMS  AND  REQUISITES  OF  DRAFTS  AND  NOTES- 
CONSTRUCTION,  DELIVERY  OF— AND  PAYMENT  BY 
NOTE  OR  BILL. 

It  will  facilitate  our  examination  to  consider  in  this  con- 
nexion the  forms  and  requisites  of  bills  and  notes,  and  the 
principles  of  construction  applicable  to  such  instruments. 
Proceeding  in  this  manner,  we  shall  at  the  outset  make  our- 
selves acquainted  with  the  essential  qualities  of  negotiable 
paper. 

Every  body  is  familiar  with  the  form  and  general  character 
of  a  promissory  note,  i  As  in  drawing  other  contracts,  no 
particular  form  of  words  is  necessary  to  be  used;  it  is  enough 
if  the  words  employed  import  an  absolute  engagement  to  pay 
a  certain  sum  of  money.  2  The  essential  qualities  of  a  note 
or  bill,  as  defined  by  Chief  Justice  Savage,  are  that  it  be  pay- 
able at  all  events;  not  dependent  on  any  contingency,  nor 
payable  out  of  a  particular  fund;  and  that  it  be  for  the  pay- 
ment of  money  only,  and  not  for  the  performance  of  some 
other  act,  or  in  the  alternative.  3 

1  Notes  are  drawn  in  many  ways;  but  most  frequently  in  something  like  the 
following  forms  : 

Albany,  June  1,  1856. 

$50.  On  demand  I  promise  to  pay  C.  D.,  or  bearer,  (or  order)  fifty  dollars, 
for  value  received.  A.  B. 

Albany,  June  1,  1856. 

$500.     Sixty  days  after  date,  for  value  received,  I  promise  to  pay  C.  D.,  or 
order,  five  hundred  dollars,  at  the  Mechanics'  and  Farmers'  Bank.        A.  B. 
Due  C.  D.,  one  hundred  dollars,  payable  on  demand. 

Albany,  June  1.  1856.  A.  B. 

*  Morris  v.  Lee,  1  Stra.,  629;  per  curiam.  There  are  no  precise  words  re- 
quisite to  make  a  promissory  note.  See  also  the  same  case  as  reported  in  2 
Lord  Raym.,  1896,  and  8  Mod.,  362 

1  Cook  v.  Satterlee,  6  Cowen,  108 


REQUISITES   OF.  125 

An  instrument  in  writing  payable  "  to  the  estate  of  Moses 
Lyon,  deceased,"  and  not  to  any  other  person  or  persons  by 
name,  is  not  a  promissory  note  under  the  statute,  i  And  a 
note  payable  to  one  or  other  of  two  persons  named,  is  not  a 
good  promissory  note  within  the  statute,  either  in  England  or 
in  this  country;  because  there  is  here  a  contingency  or  uncer- 
tainty as  to  the  person  to  whom  it  is  to  be  paid.  2  If,  however, 
it  show  on  its  face  that  it  was  given  for  value  received,  and 
an  action  be  brought  upon  it  in  the  name  of  the  two,  it  may 
be  given  in  evidence  under  a  count  describing  it  correctly; 
for  though  it  be  not  good  as  a  promissory  note,  it  is  a  valid 
contract.  3  But  where  a  bill  or  note  is  made  payable  to  a 
particular  individual  by  name,  a  contingency  as  to  the  person 
who  may  have  the  right  to  recover  on  it  will  not  vitiate  the 
instrument;  as  where  a  promissory  note  is  made  payable  to  a 
married  woman,  and  may  be  collected  by  the  husband,  or  if 
he  neglect  to  do  so,  by  the  wife  after  his  death.  4  The  con- 
tingency in  order  to  vitiate  the  note,  as  such,  must  be  apparent 
on  the  face  of  the  instrument.  Thus,  if  made  payable  to 
John  Stiles,  and  there  are  two  persons,  father  and  son,  bearing 
that  name,  and  there  is  nothing  on  the  face  of  the  note  desig- 
nating which  of  the  two  is  intended  as  the  payee,  the  uncer- 
tainty is  not  such  as  to  affect  the  validity  of  the  note;  and 
though  the  presumption  is  that  it  is  payable  to  the  elder  of 
the  two,  it  is  held  that  the  son  having  it  in  his  possession  may 
recover  on  it  in  his  own  name.  5  So,  a  bill  or  note  made 
payable  to  a  fictitious  person  or  his  order,  and  negotiated  by 
the  maker  or  drawer,  is  in  effect  payable  to  the  bearer,  and 
may  be  declared  on  as  such  against  all  the  parties  having  a 

1  Lyon  r.  Marshall,  11  Barb.  R.,  241  •  see  2  Duer  R.,  121. 

*  Walrad  v.  Petire,  4  Wend.  R  ,  675;  Blanckenhagen  r.  Blundcll,  2  Barn, 
and  Aid.,  417.    Thin  note  is  payable  to  one  person,  provided  it  has  not  been 
paid  to  the  other. 

*  Jerome  v.  Whitney,  7  John.  R.,  821 ;  2  id.  235;  10  id.  418. 
4  Richards  v.  Richards,  2  B.  and  Aid.,  447. 

*  Sweeting  v.  Fowler  and  another,  1  Stark.,  85,  106.    The  fact  that  plaintiff 
had  possession  of  the  note  was  held  the  stronger  presumption. 


126  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

knowledge  that  the  payee  is  fictitious,  i  The  law  in  this  case 
estops  the  maker  of  the  note,  who  has  himself  made  it  pay- 
able to  a  fictitious  person  and  indorsed  the  name  of  his  fiction 
upon  it  and  then  transfered  it,  from  denying  his  liability; 
and  holds  that  such  a  note  may  be  declared  upon,  by  a  bona 
fide  holder  who  has  received  it  for  value,  as  payable  to  bearer. 
And  for  the  same  reason  it  does  not  permit  the  acceptor  of  a 
bill  of  exchange,  who  accepts  it  knowing  that  the  payee  is  a 
fiction  and  that  his  name  indorsed  upon  the  bill  is  in  the 
handwriting  of  the  drawer,  to  deny  his  liability.  2 

But  at  common  law  the  holder  of  such  a  bill,  if  he 
received  it  knowing  the  payee  to  be  fictitious,  and  discounted 
it  for  the  benefit  of  the  drawer,  cannot  recover  thereon  against 
the  acceptor,  although  he  accepted  with  knowledge  of  the 
fact.  3  In  one  case  Lord  Ellenborough  held  such  an  instru- 
ment void,  as  neither  in  effect  payable  to  the  order  of  the 
drawer,  nor  to  bearer.  4  And  it  is  certain  that  the  English 
courts  have  steadily  discouraged  and  discountenanced  the  use 
of  fictitious  names  in  the  making  and  negotiating  of  notes  and 
bills,  allowing  a  recovery  upon  them  only  in  cases  where  the 
holder  received  the  same  without  notice,  and  the  defendants 
became  parties  to  the  bill  or  note  with  knowledge  of  the  cir- 
cumstances. 5 

In  the  earliest  English  case  in  bane,  the  court  of  Kings 
bench  held  that  the  bona  fide  holder  for  a  valuable  considera- 
tion of  a  bill  drawn  payable  to  a  fictitious  person,  and  indorsed 
in  that  name  by  the  drawer,  might  recover  the  amount  of  it  in 
an  action  against  the  acceptor  for  money  paid,  or  for  money 
had  and  received;  upon  the  idea  that  there  was  an  appropria- 
tion of  so  much  money  to  be  paid  to  the  person  who  should 

1  Peake  Add.,  146,  147;  Stone  v.  Ireland,  1  H.  Bla.,  316;  Tatlock  v.  Harris, 
2  T.  R.,  174;  Vere  v.  Lewis,  3  T.  R.,  182;  Minet  v.  Gibson,  3  T.  R.,481;  Parl. 
Cas.,  8  vo.  ii,  48;  Plets  v.  Johnson,  3  Hill  R.,  112. 

*  See  cases  and  authorities  above  cited. 

'  Harter  v.  Jeffery,  Peake  Rep.  Add.,  146. 
4  Bennet  v.  Farrell,  1  Campb.,  130. 

*  Chitty  on  Bills,  158,  and  cases  there  cited. 

It  is  held  a  crime  in  England  to  sign  the  name  of  a  fictitious  or  non-existing 
person.  East  P.  C.,  940;  1  Leach,  94,  172. 


REQUISITES   OF.  127 

become  the  holder  of  the  bill.  But  the  court  took  care  to 
place  their  decision  upon  the  special  circumstances  of  the  case, 
and  declared  that  they  did  not  mean  to  break  in  upon  the  rule 
that  the  indorsee  of  a  bill  of  exchange,  payable  to  order,  must 
in  deriving  his  title  prove  the  handwriting  of  the  first  indor- 
ser.  i  In  the  next  case,  disposed  of  at  the  same  time,  the 
court  decided  that  the  defendant's  acceptance  of  the  bill  with 
knowledge  of  the  circumstances  was  evidence  that  he  had 
received  value  from  the  drawers;  and  Lord  Kenyon,  and 
justices  Ashhurst  and  Buller,  expressed  the  opinion  that  the 
plaintiffs  might  recover  on  the  count  which  stated  the  bill  to 
have  been  drawn  payable  to  bearer.  2  Soon  after  and  in  the 
same  year  there  arose  a  case,  which  was  first  passed  upon  in 
the  court  of  King's  Bench,  and  then  carried  up  to  the  House 
of  Lords  for  final  adjudication,  presenting  the  precise  point  in 
question.  3  After  the  cause  had  been  argued  at  the  bar  of 
the  House,  these  questions  were  put  to  the  judges  : 

1.  Whether  the  making  of  the  instrument  declared  upon, 
appears  upon  the  special  verdict  to  be  so  criminal,  that  the 
policy  of  the  law  will  not  suffer  an  action  to  be  founded  on 
such  an  instrument  1 

1  Tatlock  v.  Harris,  decided  in  1789,  3  Term  R.,  174. 

•Verev.  Lewis,  3  T.  R.,  18£. 

1  Miiiet  v.  Gibson,  3  T.  R.,  481.  A  special  verdict  was  found,  stating  in  sub- 
stance that  Livesey  &  Co.,  made  a  certain  instrument  in  writing,  directed  to 
the  defendants,  requiring  them,  three  months  after  date,  to  pay  to  John  White, 
or  oni'-r.  7-1  *'."«;  that  Livesey  8t  Co.,  at  the  time  of  making  it,  well  knew  that 
no  such  person  as  John  White,  in  the  bill  mentioned,  existed;  that  a  certain 
indorsement  in  writing  was  afterwards  made  by  Livesey  &  Co.,  purporting  to 
be  the  indorsement  of  J.  White,  and  requiring  the  contents  of  the  bill  to  be 
paid  to  Livesey  b  Co.,  or  their  order;  that  Livesey  8c  Co..  afterwards  indorsed 
(by  A.  Goodrich,  by  procuration  of  Livesey  &.  Co.,)  to  the  plaintiffs  for  a  full 
and  valuable  consideration,  when  the  plaintiffs  became  and  still  are  the  holders 
of  the  bill;  that  the  defendants  afterwards  accepted,  well  knowing  that  no 
such  person  as  J.  White,  in  the  bill  named,  existed,  and  that  the  name  of  J. 
White,  so  indorsed  thereon,  was  not  the  handwriting  of  any  person  of  that 
name.  That  the  defendants  at  the  time  of  the  making  and  accepting  the  bill, 
bad  not,  nor  had  they  at  any  time  since,  any  money,  goods  or  effects  whatsoever 
of  or  belonging  to  Livesey  &.  Co.,  or  of  the  plaintiffs,  in  their  hands,  and  the 
defendants  have  not  paid  the  bill,  although  often  requested.  But  whether, 
upon  the  whole  matter,  the  defendants  are  liable,  the  jurors  are  ignorant,  and 
pray  the  advice  of  the  court,  etc. 


128  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

2.  Whether  upon  the  matter  found  in  the  special  verdict, 
the  bill  mentioned  in  the  fifth  count  can  be  deemed  in  law  a 
bill  payable  to  bearer  ? 

3.  Whether  the  matter  found  in  the  special  verdict  will 
sustain  any  other  count  in  the  declaration  1 

In  the  King's  Bench  it  had  been  adjudged  in  the  action  that, 
if  a  bill  of  exchange  be  drawn  in  favor  of  a  fictitious  payee, 
and  that  circumstance  be  known  as  well  to  the  acceptor  as 
the  drawer,  and  the  name  of  such  payee  be  indorsed  by  the 
drawer  on  the  bill;  an  innocent  indorsee  for  a  valuable  con- 
sideration may  recover  on  it  against  the  acceptor,  as  a  bill 
payable  to  bearer,  i  In  answer  to  the  questions  propounded 
to  them,  the  judges,  all  except  three,  delivered  their  opinions 
in  favor  of  affirming  the  judgment  of  the  court  below,  and  so 
of  course  answering  the  first  question  in  the  negative.  On 
the  second  question  there  was  a  general  agreement  among  all 
the  judges,  except  three,  replying  to  it  in  the  affirmative;  and 
on  the  third  there  was  about  the  same  unanimity  of  opinion, 
that  a  recovery  might  be  had  under  the  first  count  in  the 
declaration  alleging  the  facts  as  stated  in  the  special  verdict.  2 

The  best  commentary  upon  this  case  is  found  in  the  fact 
that  Lord  Kenyon,  who  united  in  the  judgment,  which  was 
affirmed  in  the  manner  just  stated,  afterwards  held  that  a  per- 
son discounting  a  bill  payable  to  a  fictitious  payee,  for  the  be- 
nefit of  the  drawer,  and  with  knowledge  of  the  transaction, 
cannot  recover  against  the  acceptor;  thus  adjudging  that  in 
order  to  constitute  the  indorsee  of  such  paper  a  bonajide  holder 
of  the  same,  it  is  necessary  to  shew  that  he  received  it  with- 
out knowing  that  the  payee  and  first  indorser  was  a  merely 
nominal  person. 

1  3  T.  R.,  481.  The  statement  in  the  text  is  in  the  language  of  the  marginal 
note,  which  is  in  this  case  correct. 

*  1  H.  Black.  R.,  569,  625.     Decided  in  1791. 

*  "A  bill  of  exchange  made  payable  to  a  fictitious  person  or  his  order,  is 
neither  in  effect  payable  to  the  order  of  the  drawer,  nor  to  bearer,  but  is  com- 
pletely void.     However,  if  money  paid  by  the  holder  of  such  a  bill,  as  the 
consideration  of  its  being  indorsed  to  him,  gets  to  the  hands  of  the  acceptor, 
it  may  be  recovered  back  as  money  had  and  »-eceived."     Bennet  v.  Farrell; 
Per  Lord  Ellenborough,  1  Campb.  N.  P.,  130;  tried  in  1807. 


REQUISITES    OF.  129 

When  a  bill  is  drawn  in  the  name  of  a  fictitious  person- 
payable  to  the  order  of  the  drawer,  the  acceptor  is  considered 
as  undertaking  to  pay  to  the  order  of  the  person  who  signed 
as  the  drawer.  This  is  on  the  ground  that  the  acceptor  is 
bound  to  know  the  handwriting  of  the  drawer,  and  is  there- 
fore precluded  from  disputing  it.  It  is  true,  he  may  dispute 
the  indorsement  where  the  drawer  is  a  real  person ;  but  if 
there  is,  in  reality,  no  such  person,  the  fair  construction  of 
the  acceptor's  undertaking  is,  that  he  will  pay  to  the  signa- 
ture of  the  same  person  that  signed  for  the  drawer;  and,  there- 
fore, the  indorsee  may  bring  evidence  to  shew  that  the  signa- 
tures of  the  supposed  drawer  to  the  bill  and  to  the  first  in- 
dorsement are  in  the  same  handwriting,  i  So,  if  the  maker 
of  a  note  draw  it  payable  to  a  fictitious  person,  and  negotiates 
it  with  that  name  indorsed  upon  it;  or  if  he  draws  it  payable 
to  a  real  person,  and  procures  or  allows  some  one  to  forge  his 
name  upon  it  as  indorser,  and  then  himself  negotiates  or 
transfers  it,  he  will  be  estopped  from  denying  the  genuineness 
of  the  indorsement.  2 

In  this  State  it  is  declared  by  statute  that  notes  made  pay- 
able to  the  order  of  the  maker  thereof,  or  to  the  order  of  a  fic- 
titiuiis  person,  shall,  if  negotiated,  have  the  same  effect,  and 
be  of  the  same  validity,  as  against  the  maker  and  all  persons 
having  knowledge  of  the  facts,  as  if  payable  to  bearer. 3 

1  Cooper  v.  Meyer,  10  Barn,  and  Cress  ,  468,  decided  in  1830. 

•  Meacher  v.  Fort,  8  Hill,  (Co.  Car.)  227;  Riley's  Law  Cases,  248. 

•  2  R.  S.,  8d  ed.  63;  Stevens  v.  Strang,  2  Sand.  R.,  138;  2  Duer,  121. 

Lord  Kenyon.  some  ten  years  before,  in  Hunter  v.  Jeffrey,  held  that  "• 
person  discounting  a  bill  payable  to  a  fictitious  payee,  for  the  benefit  of  the 
drawer,  and  with  knowledge  of  the  transaction,  cannot  recover  against  the 
ai-ffjitnr;"  ami  said,  "  generally  speaking,  the  first  indorsement  of  a  bill  must 
be  proved;  but  in  the  former  cases  of  this  nature  I  have  held,  and  the  House 
of  Lords,  after  solemn  argument  confirming  my  opinion,  have  held  that  a 
person  who  knows  the  whole  of  the  transactions  and  gives  color  to  them,  shall 
not  impose  an  Impossible  duty  on  a  bona  fidt  and  fair  holder  of  the  bills.  It 
is'now,  therefore,  too  well  settled  to  be  disputed  that  a  bona  fide  holder  may 
recover  on  them  as  bills  payable  to  bearer.  But  that  is  not  this  case;"  which 
was  distinguished  from  the  others  by  the  circumstance  that  plaintiff  discounted 
the  bill  for  the  benefit  of  the  drawer,  knowing  the  payee  to  be  fictitious. 
Peake  Add.  Cas.  R.,  146;  see  also  1  Campb.  N.  P.,  180. 


130  BILLS  OF   EXCHANGE  AND    PROMISSORY    NOTES. 

Under  this  act  there  can  be  little  doubt  that  the  holder  of  a 
note  made  payable  to  a  fictitious  person  would  have  the  right 
to  recover  thereon,  notwithstanding  he  received  it  with  know- 
ledge of  the  circumstances;  for  by  recognising  it  as  a  lawful 
transaction,  the  statute  impliedly  negatives  the  idea  of  mis- 
conduct in  the  person  receiving  it.  But  the  statute  was  made 
for  the  purpose  of  obviating  a  difficulty  in  the  way  of  the 
holder  in  making  title  and  suing  on  a  note  which  had  not 
been  indorsed  by  the  person  to  whose  order  it  was  made  pay- 
able. It  applies  to  cases  where  the  maker,  who  is  also  a  payee, 
negotiates  the  note  without  indorsement,  i 

When  a  note  is  made  payable  to  bearer,  there  is  an  uncer- 
tainty as  to  what  particular  person  may  become  the  holder 
thereof  and  entitled  to  recover  on  it;  but  there  is  no  uncer- 
tainty in  regard  to  the  actual  bearer  in  law,  and  none  on  the 
face  of  the  instrument.  2  The  only  doubt  that  can  arise  in 
respect  to  the  person  entitled  to  receive  payment  on  the  note, 
is  one  of  fact;  for  the  law  is  very  plain,  and  declares  that  the 
maker  is  bound  to  pay  the  amount  specified  in  it  to  the  per- 
son having  it  in  his  possession;  unless  some  circumstances  are 
shewn  calculated  to  raise  the  question,  whether  the  holder  of 
the  instrument  is  the  lawful  bearer.  3  If  it  is  proved  to  have 
been  lost  or  stolen,  the  holder  must  then  shew  that  he  received 
the  same  for  value  in  the  ordinary  course  of  business.  4  That 
is  to  say,  if  a  question  of  mala  fide  possessio  arises,  that  is  a 
matter  of  fact  to  be  raised  by  the  defendant,  and  to  be  passed 
upon  by  the  jury.  5  But  it  is  sufficient  to  satisfy  the  rule,  if 
the  actual  holder  prove  that  he  or  the  person  from  whom  he 
acquired  the  note,  or  some  preceding  party,  received  it  in 
good  faith  for  value,  subsequent  to  the  time  of  the  alleged  loss 

1  Plets  v.  Johnson,  3  Hill  R.,  112.  Where  such  a  note  is  transferee!  by 
indorsement,  there  never  was  any  difficulty  on  the  part  of  the  holder  in  making 
title  and  suing  on  the  note.  Smith  v.  Lusher,  5  Covven,  688. 

a  9  Cowen  R.,  670,  McLaughlin  v.  Waite. 

*  Miller  v.  Race,  1  Burr.  452;  Mauran  v.  Lamb,  7  Cowen,  174. 
4  Grant  v.  Vaughan,  3  Burr.  1516;  1  Black.  R.,  486. 

•  Conroy  v.  Warren,  3  John.  Gas.,  259. 


REQUISITES    OF.  131 

or  theft,  i     Upon  this  state  of  facts  the  law  recognises  him  as 
the  legal  bearer  to  whom  the  note  is  payable. 

A  note  indorsed  in  blank,  and  one  payable  to  bearer,  are  of 
the  same  nature.  They  both  pass  by  delivery,  and  possession 
is  prime  facie  evidence  of  title  in  both  cases;  on  the  general 
principle  that  honesty  and  not  fraud  is  to  be  presumed,  in  re- 
lation to  all  the  parties  to  the  bill.  2 

To  make  an  instrument  good  as  a  promissory  note,  it  is 
necessary  that  it  be  payable  to  some  particular  person,  or  that 
it  be  a  contract  which  ex  proprio  vigore  constitutes  a  promise 
to  whomsoever  shall  produce  it.  3  A  promise  to  pay  a  given 
sum  on  demand,  for  value  received,  without  saying  to  whom, 
is  mere  waste  paper.  4  The  rule  is  that  if  payable  otherwise 
than  to  bearer,  the  bill  or  note  must  contain  the  name  of  the 
payee.  5  But  like  other  rules,  this  also  has  its  exceptions;  for 
a  note  payable  to  the  person  who  shall  thereafter  indorse  the 
same,  is  a  good  negotiable  promissory  note.  6  Indeed,  any 
words  in  a  note  from  whence  it  can  be  inferred  that  the  per- 
son making  it,  or  any  other  party  to  it,  intended  it  to  be 
negotiable,  will  give  it  a  transferable  quality  against  that 
person.  But  the  Supreme  Court  of  Massachusetts  have  decided 
that  a  person  possessed  of  an  order  for  the  payment  of  money 
to  No.  100  or  bearer,  addressed  to  no  particular  person  as 
drawee,  cannot  maintain  an  action  against  the  person  sub- 
scribing it,  without  shewing  that  he  came  fairly  by  it  for  a 

I  Duncan  v.  Scott,  1  Campb.  N.  P.  C.,  100;  Rees  v.  The  Marquis  of  II  cad - 
ford,  2  Campb.,  574;  Robinson  v.  Reynolds,  2  Adol.  and  Ellis  N.  R  ,  1%,  211 ; 
Bullard  v.  Bull,  1  Mason,  252;  1  Green,  246. 

I 1  Hill  R.,  373;  4  id.  452;  7  Cowen,  174;  3  Burr.  1523;  1  id.  462. 

*  An  instrument  in  these  words  is  good  for  nothing :  "  Boston,  15th  May, 
1810:  good  for  one  hundred  and  twenty-six  dollars,  on  demand,"  and  signed 
Oilman  8c  Hoyt.    13  Mass.  R.,  158.     But  it  may  be  shewn  by  evidence  that  it 
was  given  to  plaintiff,  and  so  made  available  as  a  good  contract. 

*  Douglass  v.  Wilkcson,  6  Wend.  R.,  637;  see  the  opinion  of  Ch.  Baron 
Eyre,  in  Gibson  v.  Minet,  1  H.  Black.,  605. 

*  Baylcy  on  Bills,  22. 

*  United  States  v.  White,  2  Hill  R.,  69. 


132  BILLS  OF    EXCHANGE  AND    PROMISSORY  NOTES. 

valuable  consideration,  i  Though  addressed  to  no  particular 
person,  the  holder  of  such  a  check  may  recover  on  it,  provided 
he  shews  that  he  received  it  for  value.  2 

A  common  due  bill  executed  in  this  form,  "  due  A  B  three 
hundred  dollars,  payable  on  demand,"  and  signed  by  the 
maker,  is  a  good  promissory  note  within  the  statute.  3  So,  a 
writing  in  these  words,  "  good  to  Robert  Cochran,  or  order, 
for  thirty  dollars,  borrowed  money,"  is  a  good  negotiable 
note.  4  But  an  instrument  drawn  in  these  terms,  "  due  the 
bearer  hereof  (a  sum  specified)  which  I  promise  to  pay  to  A 
T  or  order,  on  demand,"  though  a  negotiable  promissory  note 
payable  to  bearer,  can  only  be  transfered  by  indorsement.  5 
No  matter  how  informal  the  instrument  may  be,  it  is  a  good 
note,  provided  it  contain  an  agreement  to  pay  to  a  person 
named  in  it,  or  to  bearer,  or  to  some  person  described  in 
terms  that  admit  of  no  misapplication.  6  For  the  maker  of  a 
note  may  bind  himself  to  the  bearer  generally;  and  a  promise 
to  pay  such  bearer  as  shall  come  to  the  possession  of  a  note  in 
any  given  mode,  is  only  a  more  limited  exercise  of  the  same 
power. 

The  instrument  ought  to  specify  in  some  manner,  to  whom 
it  is  to  be  paid.  If  drawn,  leaving  a  blank  for  the  name  of 
the  payee,  it  is  not  in  that  condition  a  note  or  bill;  7  but  if 
negotiated,  it  carries  with  it  an  authority  to  the  bona  fide 
holder  to  fill  it  up  with  his  own  name,  and  is  after  that  to  be 
treated  as  valid  from  date.  8  But  in  order  thus  to  charge  the 

1  Ball  v.  Allen,  15,  Mass.  R.,  433.  The  order  was  in  these  words  :  "  100 
dollars  cents  Boston,  Oct.  17,  18J6.  Pay  to  No.  100  ,  or 

bearer,  one  hundred  dollars.  For  account  of  James  Allen.  To  the  Cashier. 
See  6  Wend.,  644.  Addressed  to  a  bank,  it  would  be  good,  2  Duer,  121. 

4  Ellis  v.  Wheeler,  3  Pick.  R.,  18. 

*  Kimball  v.  Huntington,  10  Wend.  R.,  675. 
4  Franklin  v.  March,  6  N.  Hamp.  R.,  364. 

s  Cook  v.  Fellows,  1  John.  R.,  144. 

6  Smith  v.  Bridges,  Bruse  2;  Hitchcock  v.  Clotitier,  7  Verm.,  22;  2  Hill  R., 
59.     An  instrument  in  this  form,  "  I  promise  that  J.  S.  shall  receive  one  hun- 
dred pounds,"  is  a  good  note.     Leguire  v.  Prosser,  1  Hill  R.,  256. 

7  1  Hen.  Black,  608;  Rex  v.  Randall,  Russ  and  Ry.  C.  C..  193. 

•  Cruchley  v.  Clarence,  2  Maule  and  Selw.,  90;  6  Taunt.  R.,  529;  Atwood  v. 
Griffin,  1  Ryan  and  Mood.,  425. 


REQUISITES    OF.  133 

acceptor,  the  holder  must  shew  that  he  had  authority  from 
the  drawer  to  insert  his  own  name  as  payee,  i 

It  is  equally  necessary  that  every  negotiable  instrument 
should  be  properly  signed  by  the  party  to  be  charged  thereon. 
But  it  is  not  necessary  that  either  a  bill  or  a  note  should  be 
subscribed  in  writing;  it  is  enough  if  the  name  of  the  maker 
or  drawer  appear  in  the  instrument.  2  In  pleading,  the  usual 
and  correct  allegation  is  that  the  defendant  made  the  note  or 
the  bill  of  exchange;  and,  as  correct  pleading  is  the  touch- 
stone of  the  law,  there  can  be  no  doubt  of  the  maker's  liability, 
though  he  did  not  sign  or  subscribe  the  same.  3  Thus,  in  an 
action  on  a  bill,  it  was  alleged  that  the  plaintiff  made  his 
bill  in  writing,  and  thereby  required  the  defendant  to  pay : 
On  error  it  was  objected  that  it  did  not  appear  that  the  plain- 
tiff signed  the  bill;  but  it  was  decided  that  the  allegation  that 
he  made  it,  and  required  the  defendant  to  pay,  implied  that 
his  name  was  in  it,  and  that  he  or  somebody  wrote  it  for  him.  4 

Where  a  bill  or  a  note  is  made  by  an  agent,  we  have  already 
seen  that  it  should  be  drawn  and  executed  in  the  name  of  the 
principal;  that  it  should  appear  on  its  face  to  be  the  act  of 
the  person  by  whose  authority  it  is  made.  5  When  made  by 
a  partnership,  it  should  be  executed  in  the  firm  name;  and  an 
allegation  that  it  was  made  by  certain  persons  in  their  firm 
name,  is  good.  6  It  is  usual  in  such  cases  to  aver  that  the 
parties  defendant  were  partners;  and  where  this  is  done,  it  is 
sufficient  to  aver  that  the  firm  made  or  subscribed  the  note,  it 
being  done  by  one  of  them  in  the  firm  name.  7  But  if  there 
be  no  allegation  of  partnership,  and  the  plaintiff  alleges  that 

1  Crutchley  v.  Man,  5  Taunt.  R.,  529. 
'  Elliott  v.  Cooper,  Lord  Raym.,  1276;  1  Stra.,  609. 
'  For  rules  of  pleading,  see  Chitty  on  Bills,  652,  555. 
4  Erskine  v.  Murray,  Lord  Raym.,  1542.    • 

*  Smith  T.  Jarvis,  Ld.  Raym.,  1484.    The  declaration  upon  a  note  drawn  by 
Jarvis  and  Bailey,  stated  that  Jan-is,  for  himself  and  partner,  made  his  note  in 
writing,  with  his  own  hand  subscribed,  whereby  he  promised  for  himself  and 
partner  to  pay.    Held  that  the  allegation  made  the  note  that  of  the  firm. 

•  Bass  v.  Clive,  4  Campb.,  78;  Mack  r.  Spencer,  4  Wend.,  411;  Wardell  r 
Pinney.l  Wend.,  411. 

'  The  Manhattan  Co.  v.  Ledyard,  1  Caines'  Rep.,  192. 


134  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

the  defendants  "  made  the  note,  their  own  proper  hands  and 
names  being  thereunto  subscribed,"  it  is  not  enough  for  him 
to  prove  that  one  of  the  defendants  subscribed  the  note  in  the 
firm  name;  for  the  proof  must  follow  and  support  the  plea- 
ding, i  If  plaintiff  declares  as  upon  a  joint  undertaking  by 
all  of  several  defendants,  he  is  bound  to  prove  such  a  promise 
on  the  trial.  2 

A  note  containing  a  promise  to  pay  a  sum  certain,  if  the 
maker's  brother  do  not,  within  six  weeks,  is  not  good  as  a 
promissory  note.  3  Neither  is  a  note  drawn  in  the  usual  form, 
signed  by  "  A  or  else  B,"  valid  as  the  promissory  note  of  B, 
within  the  statute;  because,  as  to  him  it  is  only  a  promise  to 
pay  on  condition  that  A  does  not.  4  Being  made  by  several 
persons  who  are  not  partners,  a  note  or  bill  should  be  executed 
separately;  or  if  payable  to  two  persons  by  name,  it  should 
be  indorsed  by  them  both.  5  Not  being  partners,  one  of  two 
joint  payees  of  a  note  has  no  right  or  authority  to  use  the 
name  of  his  co-payee,  so  as  to  convey  title  to  the  note.  6 

Bills  and  notes  are  commonly  signed  or  subscribed  in  the 
handwriting  of  the  persons  making  them,  or  by  some  person 
authorized  to  act  for  them  in  that  respect;  but  these,  like 
other  contracts,  may  be  signed  by  one  who  only  makes  his 
mark,  his  name  being  written  by  another.  7 

It  is  an  essential  quality  of  a  negotiable  promissory  note 
that  it  be  payable  in  money.  8  If  made  payable  in  Pennsyl- 
vania or  New- York  paper  currency;  it  is  not  negotiable  under 
the  statute.  9  But  if  made  payable  in  York  state  bills  or  spe- 

1  Pease  v.  Morgan,  7  John.  R.,  468. 

s  Mitchell  v.  Ostrom,  2  Hill  R.,  520. 

*  Appleby  v.  Biddulph,  Buller  N.  P.,  272;  8  Mod.,  363. 

4  Ferris  v.  Bond,  4  Bar.  and  Aid.,  679. 

6  Smith  v.  Whiting,  9  Mass.  R.,  334. 

4  Wood  v.  Wood,  1  Ham.,  428 ;  Bennet  v.  M'Gaughy,  3  How.,  192. 

7  George  v.  Surrey,  1  Moody  and  Malkin,  516.     The  witness  in  this  case  did 
not  see  the  indorsement  made  with  the  mark,  but  said  he  had  frequently  seen 
the  party  so  execute  such  instruments,  and  pointed  out  some  peculiarity. 

8  2  R.  S.,  3d  ed.  52;  see  also  the  statute  of  Anne  which  took  effect  on  the  first 
of  May,  1705,  and  has  been  generally  adopted  in  this  country. 

'  Leiber  v.  Goodrich,  5  Cowen  R.  186. 


REQUISITES   OK.  135 

cie,  it  has  been  held  negotiable;  such  bills  being  equivalent 
to  lawful  current  money  of  the  state,  i  Bank  notes  that  are 
known  and  approved  of,  and  used  in  the  market  as  cash,  are 
treated  as  money;  2  and  for  this  reason,  a  note  payable  in 
bank  notes  current  in  the  city  of  New- York  has  been  declared 
a  negotiable  promissory  note,  within  the  statute.  3 

The  rule  is,  that  a  promissory  note  must,  in  order  to  come 
within  the  statute,  be  payable,  like  a  bill  of  exchange,  in 
money  only,  in  current  specie; «  or  in  what  the  court  is  bound 
to  take  judicial  notice  of  as  equivalent  to  money.  5 

I'mler  the  rule  as  held  in  England,  a  note  payable  in  cash 
or  Bank  of  England  notes  is  not  negotiable  within  the  statute, 
though  the  bills  of  that  bank  are  redeemable  at  any  moment, 
and  are  equivalent  to  money.  6  And  in  this  country  also,  the 
current  of  authorities  undoubtedly  sets  in  the  same  direction. 
In  Massachusetts  it  has  been  repeatedly  held  that  notes  pay- 
able in  foreign  bills  are  not  negotiable.  7  In  Pennsylvania  the 
same  has  been  held  in  respect  to  such  instruments,  payable  in 
current  bank  notes;  <  and  in  another  case,  where  the  note  was 
payable  in  current  bank  bills  or  notes,  Mr.  Justice  Duncan 
remarked  that  such  an  instrument  "  was  payable  in  more  than 
forty  kinds  of  paper  of  different  value,"  and  took  occasion  to 
criticise  the  two  decisions  in  this  state  reported  by  Johnson, 
as  a  departure  from  the  established  law  on  the  subject.  9 
Chancellor  Kent  confesses  the  justice  of  this  criticism;  10  and 
in  one  case  at  least  our  Supreme  Court  concedes,  arguendo, 
that  it  is  going  too  far  to  place  the  bank  bills  of  the  state  on  a 

1  Keith  T.  Jones,  9  John.  R.,  120. 

*  Miller  v.  Reid,  1  Burr.  457;  Handy  r.  Dobbin,  12  John.  R.,  230;  Holmes 
T.  Kuncaater,  12  John.  R.,  896;  Man  v.  Ex'rs  of  Man,  1  John.  Ch.  R.  281. 

'  Judah  r.  Harris,  19  John.  R.,  144. 

4  See  statutes,  2  R.  S.,8ded.,  62;  and  the  statute  of  Anne. 

*  9  John.  R.,  120,  19  John.  R.,  144. 

'  Ex  parte  Ireaon,  2  Rote,  226;  2  Buck.  1,  S.  P. 

T  Jones  T.  Fates,  4  Mass.  R.,  246;  Young  r.  Adams,  6  id.  182;  Springfield 
Bank  r.  Merrick,  14  id.  822. 

*  Gray  T.  Donahue,  4  Watt's  R.,  400. 

*  MT,  rmick  T.  Trotter,  10  Serg.  and  Rawle,  94. 

*  8  Kent.  Com.,  76. 


136  BILLS  OF  EXCHANGE  AND    PROMISSORY   NOTES 

par  with  specie,  i  There  have  been  times,  certainly,  when 
the  bank  bills  of  this  state  have  not  been  equivalent  to  lawful 
and  current  money;  and  it  is  not  impossible  that  such  an 
event  may  again  occur,  bringing  with  it  a  similar  depreciation 
of  bank  bills  and  current  bank  notes.  Under  such  circum- 
stances, it  would  be  somewhat  extravagant  to  hold  that  our 
courts  are  bound  to  take  judicial  notice  that  bills  current  in 
New- York  are  cash,  simply  because  the  law  requires  them  to 
be  redeemed  in  specie.  2 

It  is  very  evident  from  recent  cases  that  our  courts  are  by 
no  means  inclined  to  extend  the  rule,  that  the  bank  bills  of 
this  state  and  bank  notes  current  in  the  city  of  New- York  are 
equivalent  to  money.  In  one  ease  they  hold  that  a  note  pay- 
able in  bank  bills,  current  in  the  state  of  Pennsylvania,  is  not 
payable  in  money  or  its  equivalent, but  in  something  differing 
in  value  from  cash;  and  they  express  the  opinion  that  they 
cannot  officially  take  notice  of  the  market  value  of  such  bills.  3 
In  a  case  still  more  recent,  it  has  been  decided  that  a  note 
made  in  this  state,  payable  in  Canada  money,  is  not  nego- 
tiable. 4 

Our  courts  cannot  take  notice  of  Canada  laws  or  Canada 
currency;  and  though  an  act  of  the  Provincial  Parliament  is 
proved,  fixing  the  weight  and  rate  of  certain  gold  and  silver 
coins,  and  declaring  that  the  same  shall  pass  current  and  be 
deemed  a  legal  tender  in  the  Province  in  payment  of  all  debts 
and  demands;  it  does  not  follow  that  such  coins,  because  cur- 
rent in  Canada,  are  therefore  current  in  this  state;  nor  is  it 
to  be  inferred  from  such  a  statute,  prescribing  what  coins  are 
current  as  Canada  money,  that  nothing  else  passes  or  is  estab- 

1  Thompson  v.  Sloan,  23  Wend.R.,  71,  74. 

3  See  the  authorities  on  this  question.    9  John.  R.,  120;  19  id.  144;  23 
Wend.  R.,  71;  2  Hill  R.,  425;  7  id.  359;  Lucy  v.  Holbrook,  4  Ala.  R.,  88, 
140;  1  Texas  R.,  13,  246,  503;  10  Serg.  and  Rawle,  94;  Collins  v.  Lincoln,  11 
Verm.  R.,  268;  Kirkpatrick  v.  McCullough,  3  Humph.,  171;  6  id.  303;  Fry 
v.  Rousseau,  3  McLean.  106;  4  Watts,  400;  Swetlandv.  Creigh,  15  Ohio,  118; 
16  id.  5;  Faswell  v.  Kennett,  7  Miss.,  595;  5  Pike  R.,  481;  1  McCord,  115;  9 
Smedes  and  Marsh,  457;  9  Missouri,  697;  5  Cowen,  186. 

*  Leiber  v.  Goodrich,  5  Cowen  R.,  186. 

4  Thompson  v.  Sloan,  23  Wend.  R.,  71. 


REQUISITES   OF.  137 

lished  by  law  as  money  in  the  Provinces.  And  hence  it  is 
admissible  to  prove  that  the  terms  "  Canada  money,"  as  used 
at  the  place  where  the  note  is  made  and  in  its  vicinity, 
mean  Canadian  bank  bills,  and  not  specie,  i  Notwithstanding 
such  words  have  a  well  known  meaning  in  general  language, 
yet  if  a  secondary  meaning  has  been  affixed  to  them  in  com- 
mercial usage,  at  a  certain  place,  or  among  certain  classes  of 
men,  this  fact  may  be  shewn;  and  when  the  proof  is  clear, 
the  use  of  the  word  in  that  place,  or  among  those  men,  carries 
into  the  contract  the  signification  thus  established.  2 

In  Little  v.  The  Phenix  Bank,  it  was  adjudged  that  a  check 
drawn  in  New- York  on  a  bank  in  Vicksburgh,  in  the  state  of 
Mississippi,  payable  to  order  in  current  bank  notes,  is  not 
negotiable;  it  being  shewn,  that  the  bank  on  which  it  was 
drawn  had  previously  suspended  specie  payment,  and  had 
subsequently  paid  such  checks  in  current  as  distinguished 
from  specie  funds,  there  being  a  difference  between  them  in 
value  varying  from  ten  to  thirty  per  cent.  3  Practically,  such 
notes  are  often,  and  in  some  periods  of  financial  embarrass- 
ment generally  received  and  regarded  as  money  in  the  ordi- 
nary transactions  of  business.  4  But  the  practice  and  con- 
venience of  the  community  in  this  respect,  do  not  alter  the 
law.  Money  alone  is  a  legal  tender  in  the  payment  of  debts;  5 
and  where  a  creditor  receives  a  note  payable  in  something 
besides  money,  it  is  a  different  instrument  from  that  which  is 
made  negotiable  by  statute. 

When  notes  or  bills  are  made  payable  in  money  of  a  foreign 
denomination,  and  an  action  is  brought  upon  such  an  instru- 
ment, it  is  usual  and  necessary  to  aver  and  prove  the  value 
of  the  sum  payable  in  our  own  tenderabfe  coin;  for  the  judg- 

1  28  Wend.,  76-78. 

'  21  Wend.,  661 ;  Calpoys  T.  Calpoys,  1  Jacob.  461. 

»2  Hill,  425;  7  Hill,  869,  S.  C. 

*  Morris  T.  Edwards,  1  Ham.,  189;  S.  C.,  id.  624;  Bradley  T.  Hunt.  6  Gill. 
and  Johns.,  68;  15  Pick.,  177. 

*  8  Cowen,  88.     The  creditor  may  waive  his  right  to  insist  upon  payment  in 
money;  and  he  may  do  this  some  days  before  the  debt  becomes  due;  and  his 
agreement  to  receive  bank  bills  will  authorise  a  tender  in  that  kind  of  money. 
Warren  T.  Mains,  7  John.  R.,476. 

7 


138  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

ment  thereon  must  be  entered  in  dollars  and  cents,  i  It  follows 
that  where  the  action  is  brought  in  this  state,  and  the  bill  is 
in  terms  payable  in  the  money  of  another  country,  such  as 
francs,  florins,  doubloons,  ducats,  guineas,  or  pounds,  shillings 
and  pence,  it  becomes  essential  to  reduce  the  amount  reco- 
verable to  our  standard  coin;  or  what  is  the  same  thing,  to 
ascertain  and  determine  the  amount  due  thereon  in  our  stan- 
dard coinage.  2  In  doing  this,  reference  must  of  course  be 
had  to  the  place  where  the  bill  is  payable ;  for  it  is  a  principle 
of  both  equity  and  law  that  the  payee  or  holder  is  entitled  to 
recover  a  sum  equal  in  value  to  that  which  the  parties  have 
promised  to  pay  at  the  place  of  payment :  3  he  is  entitled  to 
be  made  good  for  the  failure  to  pay  at  the  proper  time  and 
place. 4 

It  is  also  requisite  that  bills  and  notes  be  made  for  the 
payment  of  money  only,  and  not  for  the  payment  of  money 
and  for  the  performance  of  some  other  act.  It  does  not  impair 
the  validity  of  a  note  to  mention  in  it  by  way  of  recital,  a 
circumstance  or  fact  that  does  not  qualify  or  add  to  the  under- 
taking expressed  in  it.  5  But  a  draft  drawn  for  the  payment 
of  a  certain  sum  of  money,  and  to  take  up  a  certain  outstand- 
ing note  made  by  the  drawers,  is  not  a  bill  of  exchange.  6 
Neither  is  a  note  to  deliver  up  horses  and  a  wharf,  and  pay 
money  at  a  particular  day,  a  promissory  note  within  the 
statute.  7  Where  an  agreement  is  engrafted  on  a  note,  it  takes 
from  the  instrument  its  character  as  a  promissory  note,  and 
converts  it  into  an  ordinary  contract.  8  But  words  inserted 

1 1  R.  S.  3d  ed.,  780. 
"2R.  S.,3ded.,  55,  §21. 

*  Cash  v.  Kennion,  11  Vesey  R.,  314. 

*  Scott  v.  Bevan,  2  Barn,  and  Adolf.,  78.    In  another  place  we  shall  consider 
the  amount  recoverable  with  reference  to  the  rate  of  exchange. 

•  Fancourt  v.  Thome,  9  Q.  B.  Rep.,  312. 

•  Cook  v.  Satterlee,  6  Cowen  R.,  108. 

7  Martin  v.  Chauntry,  2  Stra.,  1271. 

8  Bolton  v.  Dugdale,  4  Barn,  and  Adol.,  619.     The  contract  in  this  case  was 
in  these  words  :  "  Received  and  borrowed  of  Timothy  Bolton.  laborer,  the  sum 
of  30/  which  I  do  hereby  promise  to  pay  with  interest,  at  the  rate  of  five  per 
cent.    I  also  promise  to  pay  the  demands  of  the  sick  club  at  H ,  in  part 


REQUISITES    OF.  139 

in  it,  making  it  payable  in  such  manner  and  proportion  and 
at  such  times  and  places  as  the  payees,  who  are  trustees  of  a 
manufacturing  corporation,  may  determine,  does  not  affect  its 
character,  i  To  be  a  promissory  note,  the  writing  should  be 
one  entire  instrument,  for  the  payment  of  money.  If  it  be 
in  form  and  substance  a  note  up  to  a  certain  point,  as  where 
it  is  given  for  the  payment  of  six  hundred  and  ninety-five 
pounds  in  instalments  payable  from  time  to  time,  and  con- 
cludes with  a  provision  that  the  balance,  ninety-five  pounds, 
shall  be  applied  as  a  set-off  in  a  manner  specified,  the  instru- 
ment is  not  a  promissory  note.  2 

It  follows  from  what  has  been  said,  and  it  is  expressly 
adjudged,  that  notes  and  bills  payable  in  the  alternative,  as 
in  goods  or  the  proceeds  thereof,  are  not  negotiable  paper.  3 
Nor  is  a  note  payable  in  cash  or  specific  articles,  negotiable.  4 
Wherever  the  acceptor  of  a  bill  or  the  maker  of  a  note  has 
an  election  to  pay  in  money  or  do  some  other  act,  the  instru- 
ment changes  its  character  and  becomes  a  special  agreement, 
under  which  the  parties  bound  have  the  right  to  choose 
whether  they  will  pay  money  or  discharge  the  alternative 
obligation.  5  And  such  a  contract  is  not  a  negotiable  instru- 
ment. 

Furthermore,  bills  and  notes  must  be  drawn  payable  abso- 
lutely :  they  must  not  be  uncertain  as  to  amount,  nor  contin- 
gent as  to  the  event  or  fund  out  of  which  they  are  payable. 
The  words  used  should  imply  an  obligation  to  pay  the  amount 
named;  for  an  instrument  drawn  in  this  form,  "please  to  let 
the  bearer  have  seven  pounds  and  place  it  to  my  account  and 

1 14  John.  R..  288;  9  id.  217. 

*  Davien  v.  Wilkinson,  10  Adol.  and  Ellis,  98. 
'  Atkinson  r.  Hanks,  1  Cowen  R.,  692. 

4  Matthews  v.  Uoughton,  2  Fairf.,  877. 

*  2  Rose,  226.    A  promise  to  pay  a  sum  of  money,  or  render  A.  B.  to  prison, 
is  not  a  promissory  note.    Lord  Raym.,  1896. 

of  interest,  and  the  remaining  stock  and  interest  to  be  paid  on  demand  to  the 
said  Timothy  Bolton,  his  executors,  administrators  or  assigns.  Witness  my 
hand  8cc.,  17th  Sept.,  1805.  Abram  Dugdale."  Held  not  a  promissory  note; 
Me  also  Leeds  r.  Lancashire,  2  Camp.,  205;  Austin  v.  Burns,  16  Barb.  R.,  648. 


140  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTfcS. 

you  will  oblige  me,"  not  purporting  to  be  a  demand  made  by 
a  party  having  a  right  to  call  on  the  other  to  pay,  is  not  a 
good  bill,  i  But  a  draft  drawn  in  these  terms,  "  Mr.  Nelson 
will  oblige  Mr.  Webb  by  paying  to  T.  Ruff,  or  order,  twenty 
guineas  on  his  account,"  purporting  to  be  an  order  to  pay,  is 
a  good  bill  of  exchange.  2  An  order  "  to  deliver,"  a  promise 
"to  account  for,"  or  "be  responsible"  for  a  given  sum,  is 
sufficient;  for  these  terms,  though  inartificial,  are  explicit 
and  definite.  3 

The  bill  or  note  must  be  certain  as  to  the  amount  to  be 
paid.  Consequently,  a  writing  containing  a  promise  to  pay 
the  sum  of  sixty-five  pounds  with  interest,  and  all  other  sums 
due  to  the  payee,  is  not  a  promissory  note,  even  for  sixty-five 
pounds.  4  Nor  is  an  instrument  drawn  in  the  form  of  a  note, 
for  the  payment  of  a  certain  sum,  "  first  deducting  therefrom 
any  interest  or  money  that  may  be  due  to  the  maker,"  a  valid 
note.  5  Nor  is  a  draft  drawn  upon  commission  merchants, 
requiring  them  to  pay  to  the  order  of  the  drawer,  in  thirty 
days  from  date,  the  sum  of  one  thousand  dollars,  or  what 
might  be  due  after  deducting  all  advances  and  expenses, 
available  as  a  negotiable  security.  The  acceptance  being  for 
an  uncertain  amount,  to  wit,  for  the  balance  of  the  proceeds 
of  unsold  goods,  is  not  negotiable.  6  For  the  same  reason  a 
bill  payable  in  the  notes  of  a  particular  bank,  or  in  funds  of  a 
given  character,  is  not  negotiable;  since  on  the  face  of  the 
instrument  there  is  nothing  to  shew,  in  such  a  case,  the  exact 
amount  payable.  7 

'Little  v.  Slackford,  Mood,  and  M.,171.  Mere  civility  in  the  terms  of 
request  does  not  alter  the  legal  effect  of  the  instrument;  il  vous  plaira  payer, 
is  in  France  the  usual  language  of  a  bill. 

1  Ruff  v.  Webb,  1  Esp.  Rep.,  129. 

8  Morris  v.  Lea,  Lord  Raym.,  1397,-  Home  v.  Redfearn,  4  Bing.  N.  C.,  433; 
6  Scott,  260,  S.  C.  The  promise  is  material  in  such  a  case,  as  where  the  wri- 
ting was  in  these  words  :  "  I  have  received  the  sum  cf  20/  which  I  borrowed 
of  you,  and  I  have  to  be  accountable  for  the  said  sum  withjnterest,"  it  was  held 
not  good  as  a  promissory  note. 

4  Smith  v.  Nightengale.  2  Stark.  R.,  375. 

•  2  Stark  R.,  375;  Barlow  v.  Broadhurst,  4  B.  Moore,  471 ;  Kalfus  v.  Watts, 
Litt.  Sel.  Gas.,  197. 

•  Cushman  v.  Haynes,  20  Pick.,  132. 
7  10  Serg.  and  Rawle,  94. 


REQUISITES    OF.  141 

The  bill  or  note  must  not  be  payable  on  any  contingency : 
its  payment  must  not  be  made  to  depend  on  any  uncertain 
event.  If  made  payable  out  of  the  proceeds  of  certain  car- 
riages whenever  they  shall  be  sold,  it  is  not  negotiable  for 
two  reasons;  it  is  payable  out  of  a  certain  fund,  and  on  the 
uncertain  event  of  a  sale,  i  No  matter  what  the  event  may 
be,  on  the  happening  of  which  payment  is  to  be  made,  if  it 
be  uncertain  it  destroys  the  character  and  negotiability  of  the 
instrument.  If  the 'promise  be  to  pay  money  provided  the 
terras  mentioned  jn  certain  letters  written  by  the  drawer  are 
complied  with ;  2  or  provided  the  maker  shall  not  do  some 
other  act;  3  or  provided  another  person  shall  not  previously 
pay;  or  provided  a  certain  person  shall  at  his  death  leave  to 
the  maker  a  sufficient  sum  of  money;  4  or  provided  the  maker 
shall  be  able  to  pay;  5  or  provided  the  ship  Mary  arrives  at  a 
European  port  of  discharge,  free  from  capture  and  con- 
demnation by  the  British;  6  it  is  not  valid  as  a  bill  of  ex- 
change or  a  negotiable  note.  Of  course  it  is  immaterial  in 
what  manner  the  contingency  is  expressed,  so  long  as  the 
promise  is  conditioned  upon  an  uncertain  event.  Thus,  a 
promise  to  pay  when  a  person  named  shall  marry;  7  or  when 
a  certain  suit  shall  be  determined,  s  or  a  certain  sale  made;  9 
or  at  so  many  days  after  the  arrival  of  the  ship  Paragon  at 
Calcutta;  10  or  as  soon  as  you  receive  the  amount  of  my  account 
from  government;  11  is  a  conditional  promise,  and  does  not 
therefore  come  within  the  statute. 

Where  the  payment  is  made  to  depend  upon  an  event  which 
is  certain  to  arrive,  and  uncertain  only  in  regard  to  the  time 

1  De  Forest  v.  Frary,  6  Cowen,  151. 

1  Kingston  v.  Long,  cited  inChitty  on  Bills,  134. 

*  Lord  Raym.,  1396;  8  Mod.,  863. 

*  Roberts  v.  Peake,  1  Burr.,  828. 

*  Ex  parte  Tootle,  4  Ves  ,  872. 

'  Coolridge  v.  Rugglcs,  15  Mass.  R.,  887. 

7  Pearson   v.   Garrett,  4  Mod.,  242;  Beardsley  T.  Baldwin,  Stra.  1151;  7 
Mod.,  417;  4  Mod.,  242. 

I  Shelton  v.  Bruce,  9  Terger,  24. 

*  1  Cowen  R.,  692;  6  Cowen,  151. 
»  Palmer  T.  Pratt,  2  Bing.  R.,  185. 

II  Henry  v.  Hazen,  5  Pick.,  401. 


142  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

when  it  will  take  place;  the  note  or  bill  is  valid  and  negotia- 
ble. For  example,  a  note  payable  so  many  days  after  the 
death  of  the  maker's  father,  is  negotiable;  because  this  is  an 
event  which  must  inevitably  happen  some  time  or  other,  i 
And  so  a  note-  payable  to  an  infant  "  when  he  shall  come  of 
age,  to  wit,  on  the  first  of  June,  1850,"  is  a  good  note;  for  it 
is  payable  on  the,  day  specified,  though  the  infant  die  before 
the  time  arrives.  2  The  fact  that  the  payment  is  suspended 
for  an  indefinite  time  does  not  affect  the  negotiability  of  the 
instrument,  provided  only  it  is  certain  to  become  due.  For  the 
same  reason,  it  has  been  held  that  bills  made  payable  at  cer- 
tain fairs,  regularly  held  so  many  times  a  year  at  given  places, 
are  valid  and  negotiable ;  because,  though  these  fairs  were  not 
always  holden  at  a  certain  time,  yet  it  was  certain  that  they 
would  be  held.  3  On  the  same  principle  it  has  been  decided 
in  England  that  a  note  payable  two  months  after,  or  when  a 
ship  belonging  to  government  shall  be  paid  off',  is  good;  the 
event  being  morally  certain.  4  But  these  decisions  have  been 
questioned,  and  there  is  clearly  no  reason  that  can  be  assigned 
why  such  an  event  should  be  deemed  inevitable  and  certain 
to  happen.  Such  a  ship  being  at  sea  might  be  lost  with  its 
entire  crew;  it  might  be  burned  at  the  dock;  and  it  is  possi- 
ble .that  the  government  should  fail  or  refuse  to  pay,  as  many 
a  government  has  done.  And  in  respect  to  one  of  these  cases, 
where  the  maker  promised  to  pay  on  the  receipt  of  his  wages, 
it  was  evidently  not  a  good  note.  5. 

Bills  and  notes  must  not  be  made  payable  out  of  a  particu- 
lar fund;  for  when  so  drawn,  they  become  merely  a  special 
engagement,  to  be  treated  exactly  like  other  parol  contracts. 
Thus,  a  written  agreement  to  pay  a  sum  of  money  out  of  the 
net  proceeds  of  ore  to  be  raised  and  sold  from  a  certain  ore 

1  Cooke  v.  Colehan,  Willes,  396;  Stra.,  1217. 

9  Gossv.  Nelson,  1  Burr.  226. 

*  Colehan  v.  Cooke,  Willes'  R  ,  396;  2  Stra.  R..  1217.  Lord  Chief  Justice 
Willes  reviews  in  this  case  the  authorities  on  the  subject  at  considerable  length. 

4  Andrews  v.  Franklin,  1  Stra.,  24;  Evans  v.  Underwood,  1  Wils.,  262. 

8  Evans  v.  Underwood.  1  Wils.,  262.  Assuming  the  event  of  payment  to  be 
certain,  it  would  be  extravagant  to  assert  it  as  certain  that  the  maker  would 
receive  his  wages  at  the  same  time. 


REQUISITES   OF.  143 

bed,  is  not  a  promissory  note,  i  So,  an  order  to  pay  out  of  the 
drawer's  growing  subsistence,  2  or  out  of  his  rents  or  other 
money  in  the  hands  of  the  drawee,  3  or  out  of  the  proceeds  of 
certain  sales,  4  is  not  a  bill  of  exchange.  Neither  is  an  order 
drawn  by  a  client  on  his  attorney,  to  pay  a  certain  sum  out  of 
any  moneys  collected  for  him,  a  bill  of  exchange;  5  nor  is  a 
receipt  given  by  an  attorney  to  be  accountable  to  Thomas 
Witt  or  bearer,  for  securities  deposited  with  him  for  collec- 
tion, to  be  deemed  a  negotiable  instrument/ 6  Though  writ- 
ten in  the  form  of  a  note,  if  the  writing  containing  the  pro- 
mise shew  that  it  is  payable  out  of  a  special  fund,  it  is  void  as 
a  note;  as  where  it  is  drawn  in  the  shape  of  a  receipt  for  two 
hundred  pounds  in  drafts,  concluding  with  a  promise  to  pay 
it  to  the  lender  with  interest.  ? 

When  a  bill  or  note  is  made  payable  out  of  a  particular 
fund,  the  promise  is  made  contingent  upon  the  sufficiency  of 
the  fund;  and  if  it  fail,  the  promise  becomes  nugatory.  And 
therefore  the  law  does  not  regard  such  instruments,  encum- 
bered as  they  are  with  conditions  and  contingencies,  as  nego- 
tiable paper.  8  If  assigned,  as  they  may  be,  the  assignee  must 
take  them  subject  to  all  the  equities. 

Care  must  be  taken  to  distinguish  between  bills  drawn 
payable  out  of  a  particular  fund,  and  those  that  are  simply 
chargeable  to  a  particular  account.  Where  a  reference  is 
made  to  a  special  fund  merely  as  a  direction  to  the  drawee 
how  to  reimburse  himself,  and  the  payment  is  not  made  to 
depend  upon  the  adequacy  of  that  fund,  it  will  not  vitiate  the 

1  Worden  r.  Dodge,  4  Denio  R.,  159.  This  is  like  the  ewe  of  Jenny  T. 
Hcrle,  Lord  Raym.,  1861 ;  8  Mod.,  265.  where  a  bill  was  drawn  payable  out  of 
the  moneys  belonging  to  the  proprietors  of  certain  mines. 

•  Jooelyn  r.  Laseur,  10  Mod.,  894;  Willes,  897. 

•  Morton  r.  Nay  lor,  1  Hill,  683.     The  rule  is  the  same  whether  the  order  is 
payable  out  of  rents  collected,  or  to  become  due. 

4  8  Wils.,  213;  1  Cowen,  707. 

•  Crawford  T.  Cully,  Wright,  468. 

•  Fiske  T.  Witt,  22  Pick.,  88. 

1  Williamson  r.  Bennett,  2  Campb.,  418. 

•  Cola  T.  Buck,  7  Metcalf  R.,  688;  Overton  T.  Tyler,  3  Barr.,  846.     See  also 
the  language  of  Lord  Kenyon,  in  Carlo*  T.  Fancourt,  6  T.  R  ,  482. 


144  BILLS   OF   EXCHANGE  AND    PROMISSORY  NOTES. 

bill.  Thus,  where  the  maker  of  a  bill  directed  the  drawee 
to  pay,  one  month  after  date,  to  the  plaintiff  or  order,  a  spe- 
cified sum  of  money,  "  as  his  quarterly  half  pay  from  June 
to  September;"  it  was  adjudged  a  good  bill,  inasmuch  as  the 
payment  was  not  made  dependent  upon  the  fund,  i  So,  where 
a  note  was  made  for  the  payment  of  twenty-five  pounds,  to 
a  certain  person,  or  bearer,  "  being  a  portion  of  a  value  as 
under  deposited  in  security  for  payment^hereof,"  it  was  held 
a  good  note.  2  In  like  manner,  where  the  mayor  of  Brooklyn 
drew  a  bill  upon  the  treasurer  of  'the  city  in  these  terms, 
"  pay  Alexander  Lyon,  or  order,  fifteen  hundred  dollars  for 
award  No.  7,  and  charge  to  Bedford  road  assessment,"  it  was 
decided  to  be  a  good  bill  of  exchange;  because  the  payment 
was  not,  on  the  face  of  the  bill,  either  conditional  or  restricted 
to  any  particular  fund.  3  Words  added  merely  by  way  of 
explanation,  to  a  positive  order  to  pay,  do  not  affect  the  instru- 
ment. 4  Indeed,  it  is  very  common  to  specify  in  the  bill  the 
object  or  purpose  for  which  it  was  drawn,  as  well  as  the 
account  to  which  it  is  to  be  charged,  without  intending  to 
make  the  order  to  pay  either  conditional  or  contingent.  5 

When  a  draft  is  drawn  payable  out  of  a  particular  fund, 
and  "  accepted  payable  when  in  funds  under  contract,"  the 
fund  is  to  be  deemed  equitably  appropriated  for  that  purpose.  6 
Here,  the  credit  is  given  to  the  fund,  and  not  to  the  individual 
parties  to  the  bill  as  is  always  the  case  in  respect  to  negotiable 
paper. 

It  is  proper  in  this  connexion  to  observe  that  the  acceptance 
of  a  bill  of  exchange  must  be  absolute  according  to  the  tenor 

1  M'Lead  v.  Snee,  Stra.,  762;  Ld.  Raym.,  1481;  11  Mod.,  400. 

9  Hansoullier  v.  Hartsink  and  al.  7  T.  R.,  733. 

'  Kelly  v.  The  Mayor,  &c.,  of  Brooklyn,  4  Hill  R.,  263;  as  to  the  right  of 
a  corporation  to  make  such  instruments,  see  5  Barb.  R.,  218. 

4  Leonard  v.  Mason,!  Wend.  R..  522.  This  case  was  brought  on  a  bill 
written  under  a  note  as  follows  :  "  Please  pay  the  above  note,  and  hold  it 
against  me  in  our  settlement." 

*  Goodrich  v.  Gordon,  15  John.  R.,  6. 

•  Vreeland  v.  Blunt,  6  Barb.  R.,  182.    In  order  to  recover  on  such  an  accep- 
tance, it  must  be  made  to  appear  that  the  fund  was  sufficient;  and  the  agree- 
ment is  to  be  construed  like  other  parol  contracts.    Gallery  v.  Prindle,  14 
Barb.  R.,  186. 


REQUISITES   OF.  145 

of  the  bill;  that  is  to  say,  it  should  not  be  varied  or  qualified 
in  any  material  particular.  If  therefore  the  person  on  whom 
it  is  drawn  accepts  it  conditionally,  or  payable  out  of  a  special 
fund,  and  refuses  to  make  an  unqualified  acceptance,  it  should 
be  protested  for  non-acceptance,  i 

By  the  statute  law  of  this  state  every  acceptance  of  a  bill 
of  exchange  is  required  to  be  made  in  writing.  2  But  a  pro- 
mise in  writing  to  accept,  when  acted  upon,' is  deemed  an  accep- 
tance; and  a  letter  of  credit  authorizing  the  person  addressed 
to  draw  bills  upon  the  writer,  is  to  be  regarded  as  an  uncon- 
ditional promise  to  accept,  within  the  meaning  of  the  statute.  3 
Under  such  a  letter,  which  is  generally  limited  to  a  specified 
amount  and  is  in  many  respects  conditional,  it  is  important 
that  the  person  authorized  to  draw  should  follow  exactly  the 
terms  of  his  authority,  for  if  he  depart  from  them,  the  drawee 
is  not  bound  to  honor  the  bill.  4 

In  England  a  cotemporaneous  writing  or  indorsement  be- 
neath or  on  the  back  of  a  promissory  note,  and  sometimes 
even  on  a  detached  paper,  has  been  considered  part  of  the  note 
it<rlf,  so  as  to  render  it  conditional  and  therefore  not  negotia- 
ble under  the  statute.  As  between  the  original  parties,  such 
a  memorandum  indorsed  on  the  back  of  the  instrument,  be- 
comes a  part  of  the  agreement,  and  prevents  it  from  being  en- 
forced as  a  valid  note.  5  In  other  words,  the  terms  of  such  a 
writing  are  to  be  read  in  connection  with  the  body  of  the  note, 
and  the  whole  to  be  construed  as  one  contract.  6  Being  writ- 
ten on  a  separate  piece  of  paper,  though  it  does  not  vitiate  the 
instrument,  it  is  admissible  in  evidence  between  the  original 
parties  and  their  representatives,  and  qualifies  the  liability  of 
the  makers  and  indorse rs;  but  is  of  ho  force  as  against  an 

1  Walker  v .  The  B»nk  of  the  State  of  New-York,  18  Barb.  R.,  686. 

1  R.  S.,8ded.  p.  68. 

'  5  Hill  R.  482;  id.  686;  2  DenfoR.,  876;  8  id.  668. 

4  See  8  Denio,  658;  6  Hill  R.,  482;  2  Denio,  876.  The  statute  makes  an 
unconditional  promise  in  writing  to  accept,  an  actual  acceptance  in  favor  of 
bona  fide  holders  who  hare  received  the  bill  on  the  faith  thereof. 

1  Leeds  v.  Lancashire,  2  Campb.,  206. 

•  Hartley  v.  Wilkinson,  4  M.  and  S.,  26;  4  Campb.,  127. 


146  BILLS   OF  EXCHANGE  AND    PROMISSORY    NOTES. 

indorsee  who  has  received  the  paper  without  any  knowledge 
of  the  secret  agreement,  i 

In  Massachusetts  it  is  settled  that  any  memorandum  an- 
nexed to  a  note  of  hand  is  part  of  such  note,  and  enters  into 
the  construction  of  the  contract,  and  controls  or  explains  it.  2 
And,  therefore,  where  such  a  writing  alters  the  nature  of  the 
instrument,  as  by  making  it  payable  in  something  else  besides 
money,  3  or  by  making  the  engagement  to  pay  conditional 
upon  an  uncertain  event,  4  it  destroys  the  negotiability  of  the 
note.  In  one  of  the  cases  referred  to,  the  words  "  foreign 
bills"  were  written  underneath  the  note;  in  another  the 
word  "  facilities  "  was  inserted  in  the  margin ;  and  in  another 
still,  these  terms  were  added  at  the  bottom  of  a  note  to  become 
due  on  demand,  "  one  half  to  be  paid  in  twelve  months  and 
the  balance  to  be  paid  in  twenty-four  months ;"  and  the  court 
considered  them  as  entering  into  and  forming  part  of  the  con- 
tract, the  same  as  if  written  in  the  body  of  the  instrument. 
The  same  rule  of  construction  prevails  in  Vermont,  where 
the  added  words  qualify  the  contract  in  any  material  particu- 
lar. 5 

In  this  state,  words  inserted  in  the  margin  or  added  at  the 
bottom  of  the  note,  at  or  before  its  delivery,  not  changing  its 
character  as  a  promissory  note,  but  altering  its  terms,  are 
considered  a  part  of  the  instrument;  as  where  a  note  is  made 
payable  generally,  and  indorsed  for  the  accommodation  of  the 
maker,  and.  he  afterwards,  without  the  knowledge  of  the  in- 
dorser,  adds  words  making  it  payable  at  a  particular  bank.  6 
On  the  other  hand,  the  English  decisions  hold  the  place 
of  payment  a  material  part  of  the  note  only  when  it  is  em- 

1  Bowerbankv.  Monteiro,  4  Taunt,  844;  id.  227 ;  Gibbon  v.  Scott,  2  Stark. 
R.,286. 

*  Jones  Y.  Fales,  4  Mass.,  245;  Coolidge  v.  Inglee,  13  id.  32;  Springfield 
Bank  v.  Mcrrick,  14  id.  322;  Haywood  v.  Pen-in,  and  Makepeace  v.  Harvard 
College,  10  Pick.,  228,  298;  Wheelock  v.   Freeman,  13  id.  168;  Barnard  v. 
dishing,  4  Met.,  230;  8  id.  226. 

*  4  Mass.,  245;  14  Mass.,  322. 
4  13  Mass.,  32. 

6  Fletcher  v.  Blodget,  16  Verm.  R.,  26. 

8  Bank  of  America  v.  Woodworth,  18  John.  R.,  315,  and  same  case  in  error, 
19  John.  R.,  392. 


REQUISITES    OF.  147 

bodied  in  the  instrument,  i  If  the  alteration  be  written  in 
the  margin,  or  inserted  at  the  bottom,  so  as  to  make  it  evi- 
dently a  part  of  the  contract,  it  is  unquestionably  to  be  con- 
strued as  entering  into  the  body  of  the  note.  2  But  a  sepa- 
rate memorandum,  whether  at  the  foot  or  on  the  back  of  a 
promissory  note,  is  not  in  this  state  considered  or  treated  as 
forming  a  part  of  the  instrument;  and  its  only  effect  is  to  shew 
the  consideration,  and  to  operate  as  a  notice  to  any  person  who 
may  purchase  or  receive  the  note.  3 

Though  a  written  cotemporaneous  agreement  between  the 
parties,  as  for  renewal,  is  valid  between  them,  4  it  is  clearly 
not  to  be  considered  a  part  of  the  contract,  when  made  subse- 
quent to  the  execution  and  delivery  of  the  note;  5  nor  is 
even  a  cotemporaneous  agreement  to  be  so  considered,  where 
the  parties  to  it  are  different  from  the  parties  to  the  note.  6 

It  is  settled  in  England  and  in  this  country  that  promissory 
notes  and  bills  of  exchange,  as  well  as  other  contracts  in 
writing,  cannot  be  defeated  or  modified  by  parol  evidence  of 
a  verbal  agreement,  to  vary  the  terms  of  the  written  instru- 
ment. 7  This  rule  applies  to  the  case  of  a  verbal  agreement 
to  renew  a  note,  at  maturity.  The  indorsee  brings  an  action 
against  an  indorser  of  a  promissory  note :  the  defence  set  up  is 
that  the  defendant  refused  to  indorse  it,  unless  the  plaintiff 
would  agree  that  it  should  be  renewed  when  it  became  due, 
and  that  he  did  so  agree :  Lord  Ellenborough ;  "  The  parol 
condition  is  quite  inconsistent  with  the  written  instrument. 
The  condition  for  a  renewal  entirely  contradicts  the  instru- 

1  Saunderson  and  others  v.  Judge,  2  H.  Bl.,  509;  Price  v.  Mitchell,  4  Carapb. 
N.  P.  R.,  200;  Trapp  v.  Spearman,  3  Esp.  R.,  57;  Parker  v.  Gordon,  7  East, 
885;  1  Campb.,  424;  1  Holt  N.  P.  R.,  363. 

1  Platt  v.  Smith.  14  John.  R.,  368;  4  Mass.,  245. 

'  Sanders  v.  Bacon,  8  John.  R.,  485;  Tappan  v.  Ely,  15  Wend   R.,  862. 

4  4  Taunt.,  844;  9  B.  and  C.,  758;  4  Man.  and  Ryl.,  591. 

•  4  Campb,  217;  1  Stark.  R..  58. 

*  Webb  v.  Spice,  19  L.  J.,  84  Q.  B.,  on  error  in  exchequer  chamber. 

1  Hoare  v.  Graham,  8  Campb.,  57;  Free  v.  Hawkins,  8  Taunt.,  92;  Wood- 
bridge  T.  Spooncr,  3  B.  and  Aid.,  288;  Moseley  v.  Hanford.  10 B.  and  C.,  729; 
7  Mass.  R.,  518;  11  id.  27;  8  John.  R.,  292;  Erwin  T.  Saunders,  1  Cowen, 
249;  Payne  v.  Ladue,  1  Hill  R.,  116;  Pratt  v.Gulick,  18  Barb.  R.,  297. 


148  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

ment  which  the  defendant  has  signed.  There  may,  after  a 
bill  is  drawn,  be  a  binding  promise  for  a  valuable  considera- 
tion, to  renew  it  when  due.  But  if  the  promise  is  cotempora- 
neous  with  the  drawing  of  the  bill,  the  law  will  not  enforce 
it.  This  would  be  incorporating  with  a  written  contract,  an 
incongruous  parol  condition,  which  is  contrary  to  first  prin- 
ciples." i 

On  the  same  principle,  it  is  not  admissible  to  shew,  by  way 
of  defeating  a  recovery  on  a  note,  that  it  was  executed  subject 
to  a  condition; 2  or  that  it  was  not  to  be  paid  in  a  certain 
event;  or  that  the  time  or  place  of  payment  was  changed  or 
made  different  from  that  expressed  in  the  writing.  3  In  a 
court  of  law  such  evidence  is  not  admissible  to  shew  even  a 
mistake  in  the  time  of  payment;  4  and  though  there  be  no  time 
specified,  parol  evidence  will  not  be  admitted;  for  the  time  of 
payment  is  part  of  the  contract,  and  if  no  time  be  expressed, 
the  law  adjudges  that  the  money  is  payable  immediately,  and 
presumes  that  the  parties  contracted  with  knowledge  of  the 
law  on  the  subject.  5  Notwithstanding  a  note  cannot  be  con- 
tradicted, nor  controlled  in  its  legal  effect  by  oral  evidence 
that  it  was  to  have  no  validity  except  in  a  certain  event,  it 
may,  between  the  original  parties,  be  impeached  for  a  failure 
of  consideration; 6  for  fraud;  for  want  of  consideration;  or 
by  shewing  a  subsequent  agreement  varying  the  original  con- 
tract, or  waiving  a  portion  of  it.  7 

I  3  Campb.,  57. 

II  1  Cowen  R.,  249;  Farnham  v.  Ingham,  5  Verm.,  114, 152. 
*Fitzhugh  v.  Runyon,  8  John.  R.,  375;  Thompson  v.  Ketchum,  8  id.  190. 

4  8  John.  R.,  376;  see  also  Wells  v.  Baldwin,  18  John.  R.,  45.  The  plead- 
ings may  be  so  framed  as  to  admit  the  evidence;  Seeley  v.  Engell,  3  Kernan 
R.,542. 

6  Per  Kent,  C.  J.,  8  John.  R.,  192. 

6  Solly  v.  Hinde,  2  C.  and  M.,  516;  Payne  v.  Ladue,  1  Hill,  116. 

7 1  Cowen,  250;  Slade  v.  Halsted,  7  Cowen,  322;  Garlock  v.  Geortner,  7 
Wend.,  98.  The  note  in  this  case  was  made  and  delivered,  and  afterwards  left 
by  the  payee  in  the  hands  of  the  maker  until  a  certain  act  was  done,  and  he 
subsequently  refused  to  redeliver  it ;  and  held  that  the  payee  in  an  action  on 
the  note  might  prove  the  circumstances  as  an  excuse  for  not  producing  the 
note. 


REQUISITES  OF.  149 

PARTS  AND  PARTICULAR  REQUISITES. 

It  is  scarcely  necessary  to  say  that  bills  of  exchange  and 
promissory  notes  must  be  made  in  writing :  indeed,  neither  of 
these  instruments  can  be  defined  without  including  this  among 
the  requisites  of  the  contract,  i  By  this,  it  is  not  meant  that 
the  whole  instrument  must  be  written,  for  it  is  equally  safe 
and  very  common  to  use  printed  forms,  leaving  the  dates  and 
amounts  to  be  filled  up  as  circumstances  may  require.  But 
it  must  of  course  be  signed  in  writing  by  the  party  executing 
it  or  by  his  agent,  acting  for  him  or  in  his  name. 

The  mode  of  writing  does  not  appear  to  be  material ;  it  may 
be  in  pencil  or  in  ink;  on  paper  or  on  parchment,  or  on  any 
other  convenient  substitute  for  paper.  2  Where  a  question 
arose  upon  an  indorsement  on  a  promissory  note  written  with 
a  pencil,  Abbott,  C.  J.  observed  :  "  There  being  no  authority 
to  shew  that  a  contract  which  the  law  requires  to  be  in  writ- 
ing should  be  written  in  any  particular  mode,  or  with  any 
specific  material,  and  the  law  of  merchants  requiring  only  that 
an  indorsement  of  bills  of  exchange  should  be  in  writing, 
without  specifying  the  manner  in  which  the  writing  is  to  be 
made,  I  am  of  opinion  that  the  indorsement  in  this  case  was 
a  sufficient  indorsement  in  writing  witbin  the  meaning  of  the 
law  of  merchants,  and  that  the  property  in  the  bill  passed  by 
it  to  the  plaintiff."  And  Bayley  J.  remarked  :  I  cannot  see 
any  reason  why,  when  the  law  requires  a  contract  to  be  in 
writing,  that  contract  shall  be  void  if  it  be  written  in  pencil. 
If  the  character  of  the  handwriting  were  thereby  wholly 
destroyed,  so  as  to  be  incapable  of  proof,  there  might  be  some- 
thing in  the  objection;  but  it  is  not  thereby  destroyed,  for, 
when  the  writing  is  in  pencil,  proof  of  the  character  of  the 
handwriting  may  still  be  given.  I  think,  therefore,  that  this 
is  a  valid  writing  at  common  law,  and  also  that  it  is  an 
indorsement  according  to  the  usage  and  custom  of  merchants; 
for  that  usage  only  requires  that  the  indorsement  should  be  in 

1  2  Bl.  Com.,  466;  6  Barn,  and  Cress.,  284. 
'  Chitty  on  Bills,  127;  Bylcs  on  Bills,  66. 


150  BILLS    OF   EXCHANGE  AND    PROMISSORY  NOTES. 

writing,  and  not  that  that  writing  should  be  made  with  any 
specific  materials,  i 

And  it  is  not  necessary  that  a  party  should  sign  or  write  his 
name  upon  or  under  a  note  or  bill  in  order  to  make  a  valid 
execution  or  indorsement  of  the  paper.  He  may  execute  an 
instrument  and  bind  himself  as  effectually  by  his  initials  as 
by  writing  his  name  in  full.  2  And  he  may  use  figures  or  a 
mark  in  lieu  of  his  proper  name.  3 

In  respect  to  the  date,  it  is  usual  to  superscribe  the  note  or 
bill  with  the  name  of  the  place  where  and  the  time  when  it 
is  made.  In  France,  where  the  bill  is  required  to  be  drawn 
at  one  place  upon  another,  the  place  of  drawing  must  be  cor- 
rectly stated.  4  According  to  the  common  law  no  place  is 
necessary  to  be  stated  in  the  date  of  either  a  note  or  bill. 
Indeed,  no  date  whatever  is  essential  to  the  validity  of  a  bill 
or  note;  for  where  they  have  no  date,  the  time,  if  necessary, 
may  be  inquired  into,  and  will  be  computed  from  the  day  they 
were  issued.  5  And  so  when  delivered  after  the  time  men- 
tioned in  the  date,  they  are  valid  only  from  the  day  of  delivery, 
and  are  to  be  considered  as  drawn  on  that  day.  6  It  was  so 
held,  where  a  note  signed  in  the  name  of  a  firm,  bore  date 
before  but  was  issued  after  the  publishing  of  a  notice  that  the 
partnership  had  been  dissolved.  7  As  a  matter  of  convenience, 
the  date  is  doubtless  very  important,  for  in  many  cases  they 
are  made  payable  so  many  months  or  days  after  date.  And 
where  this  is  the  form  of  the  instrument,  it  is  leaving  it  in  a 
very  imperfect  shape  to  leave  it  without  a  date.  Eut  even  in 
this  case  the  want  or  absence  of  a  date  does  not  invalidate  the 

1  Geary  v.  Physic,  5  Barn,  and  Cress,  234.  The  rule  is  the  same  with  us; 
Brown  v.  The  Butchers'  and  Drovers'  Bank,  6  Hill,  443. 

9  The  Merchants'  Bank  v.  Spicer,  6  Wend.,  443;  1  Denio,  471. 

8  6  Hill,  443;  George  v.  Surrey,  1  Mood,  and  Malk.,  516;  Bank  v.  Flanderss 
4  N.  Hamp.  R.,  239,  247. 

4  Chitty  on  Bills,  147, 11  ed;  Story  on  Bills,  §  40,  41. 

6  Mechanics'  and  Farmers'  Bank  v.  Schuyler,  7  Cowen,  337. 

8  Lansing  v.  Gaine  and  Ten  Eyck,  2  John.  R-,  301. 

T  Abel  v.  Sutton,  3  Esp.  Gas.,  108;  2  John.  R.,301. 


REQUISITES  OF.  151 

bill,  for  it  will  be  intended  that  it  was  dated  on  the  day  it 
was  made,  i 

However,  where  the  date  is  inserted  it  is  so  far  a  material 
part  of  the  instrument  that  it  cannot  be  altered  without  the 
consent  of  all  the  parties.  2  If  delivered,  having  a  blank  left 
fur  the  day  of  the  month,  it  may  be  filled  up,  as  we  have  seen, 
without  affecting  its  validity,  and  a  mistake  in  the  date  may 
also  be  corrected.  3 

'It  is  common  to  date  bills  and  notes  on  the  day  they  are 
made;  but  there  is  no  legal  objection,  either  to  ante-dating  or 
post-dating  them;  nor  is  the  fact  that  a  note  post-dated  is 
negotiated  before  the  day  of  its  date  a  legal  ground  of  suspi- 
cion, so  as  to  put  the  indorsee  upon  inquiry,  and  subject  him 
to  the  equities  existing  between  the  original  parties.  4  It  is 
true,  a  note  cannot  be  ante-dated  for  the  purpose  of  evading 
a  statute,  5  or  in  order  to  effect  a  fraudulent  design.  6  But 
if  it  be  honestly  done,  it  may  be  dated  as  of  a  day  antecedent 
to  that  on  which  it  was  put  in  circulation;  and  no  presump- 
tion will  arise  from  that  circumstance  to  impeach  its  validity.  7 

The  instrument  is  valid  from  the  time  of  the  delivery;  and 
as  it  is  customary  to  date  notes  and  bills  on  the  day  they  are 
made,  a  delivery  at  the  time  will  be  presumed  until  the  con- 
trary appears.  8 

The  place  of  the  date  in  a  note  or  bill  is  practically  almost 
indispensable.  No  place  of  payment  being  mentioned,  it  is 
some  indication  of  the  place  where  the  maker  is  to  be  found,  to 
whom  the  note  should  be  presented  for  payment;  9  and  it  is 

1  Gilesv.  Bourne,  6  Maule  and  S..  78;  De  La  Courtier  v   Bellamy,  2  Show., 

•  Martin  v.  Miller,  4  T.  R.,  820. 

»  7  Cowen  R..  837.  c.  2;  Brutt  v.  Picard,  Ryl.  and  Mood.  N.  P.  Cas.,  87; 
6  Maule  and  Selw..  142. 
4  Brewster  T.  McCardel,  8  Wend.  R.,  478;  Pasmore  T.  North,  18  East,  616. 

•  Bayley  T.  Taber,  6  Mass.  R.,  286. 

•  2  John.  R.,  800. 

T  7  Cowen  R.,836;  see  case  reported  in  the  note;  and  Richter  v.  Selin,  8 
Serg.  and  Rawle,  425;  8  Wend.  R.,  479;  as  to  alterations  see  17  Wend.,  241. 

•  Woodford  v.  Dorwin,  8  Verm.,  82;  Anderson  v.  Weston,  8  Scott,  683. 
'  Galpin  v.  Hard,  3  McCord,  894. 


152  BILLS   OF   EXCHANGE  AND    PROMISSORY  NOTES. 

also  useful  as  a  means  of  ascertaining  whether  a  bill  of  ex- 
change is  to  be  deemed  foreign  or  inland.  1 

The  mention  of  a  particular  place  in  the  date  of  a  note 
does  not  make  it  payable  there,  because  the  holder  is 
bound  to  seek  the  maker  elsewhere,  and  make  a  personal  de- 
mand, provided  he  is  able  to  find  him  after  a  reasonable 
search.  2  The  place  mentioned  in  the  date  is  only  a  sugges- 
tion as  to  where  the  maker  resides,  and  is  not  considered  an 
admission  or  stipulation  that  the  demand  of  payment  may  be 
made  at  that  place.  3  But  it  is  held  that  where  the  drawer  of 
a  bill  of  exchange  dates  it  generally,  as  at  "  Manchester,"  it  is 
sufficient  to  send  him  a  notice  of  dishonor  by  mail,  addressed 
to  him  at  that  place.  4 

The  custom  is  to  superscribe  bills  and  notes  with  the  sum,  in 
figures,  for  which  they  are  made  payable.  The  object  of  this 
is  to  render  the  amount  certain,  and  prevent  any  mistake  in 
the  drawing  of  the  instrument.  Where  there  is  a  defect  in 
the  body  of  the  note  or  bill,  the  amount  mentioned  in  the 
margin  may  be  referred  to  in  order  to  remove  any  ambiguity 
in  the  language  used.  And  where  the  amount  is  left  blank  in 
the  body  of  the  instrument,  it  is  held  that  the  holder  may  fill 
it  up  with  the  amount  stated  in  the  margin.  5  There  being  a 
discrepancy  between  the  amount  stated  in  the  margin  and 

1  Buckner  v.  Finley,  2  Peters,  586,  688;  "Wells  v.  "Whitehead,  15  Wend.  527. 
The  bill  in  this  case  was  dated  at  Key  West,  and  drawn  on  Boston. 

"SM'Cord,  394;  19  John.  R.,  391.  There  is  no  legal  objection  to  a  bill 
being  dated  on  a  Sunday;  nor  does  it  lie  with  the  acceptor  to  say  that  the 
acceptance  is  void  because  made  on  that  day.  Denny  v.  DeFontaine,  1  Taunt., 
131;  Begbie  v.  Levy,  1  Tyrw.  R.,  130. 

*  Anderson  v.  Drake,  14  John.  R.,  114;  Taylor  v.  Snyder,  3  Denio,  145; 
Spies  v.  Gilmore,  3  Comst.,  321. 

4  Mann  v.  Moors,  Ryan  and  Moody,  24(5.  The  letter  in  this  case  was  ad- 
dressed "  Mr.  Moors,  Manchester."  Such  a  notice  is  too  vague  to  charge  an 
indorser;  Walter  v.  Haynes,  id.  149. 

6  Boyd  v.  Brotherson,  10  Wend.,  93;  Norwich  Bank  v.  Hyde,  13  Conn.,  279. 
In  this  ease  the  note  was  drawn  in  these  words : 

Norwich,  Ct.,  Feb.  6th,  1837. 

$200.  Sixty  days  after  date  for  value  received.  I  promise  to  pay  to  the 
•rder  of  Amos  D.  Allen,  dollars  at  the  Quinebaug  Bank. 

(Signed,)        Oliver  Allen. 


REQUISITES   OF.  153 

that  mentioned  in  the  body  of  the  instrument,  the  latter  pre- 
vails; because  the  former  is  only  a  memorandum,  while  the 
words  used  in  the  body  of  the  contract  are  a  part  of  the  note. 
For  the  same  reason,  the  holder  of  an  instrument  written  in 
the  form  of  a  promissory  note,  having  the  sum  of  two  hundred 
dollars  marked  in  figures  on  the  margin,  and  containing  a 
promise  to  pay  blank  dollars,  cannot  be  declared  or  recovered 
on  in  that  shape  as  a  promissory  note.  But  if  it  has  been  made 
and  indorsed  and  delivered  to  him  in  that  imperfect  condition 
for  value,  he  has  the  right  to  fill  it  up  and  make  it  what 
it  was  intended  to  be.  i  And  if  it  has  been  filled  up  for  a 
specific  amount,  the  holder  has  no  right  to  alter  the  body  of 
the  note,  without  obtaining  the  consent  of  the  maker  or 
indorser,  or  shewing  that  that  was  the  understanding  of  the 
parties  at  the  time  it  was  made.  2 

Prima  facie  the  body  of  the  note  is  to  govern;  but  it  may 
be  shewn  that  the  amount  stated  in  the  margin  is  correct  ac- 
cording to  the  intention  of  the  parties,  and  this  being  done 
will  justify  or  at  least  excuse  an  alteration  to  that  effect. 
For  clearly  enough  such  an  alteration,  making  the  note  con- 
form to  the  agreement,  will  not  vitiate  the  instrument ;  3 
though  the  general  rule  undoubtedly  is  that  every  material 
alteration  of  such  a  paper  destroys  its  validity.  4 

As  to  the  time  and  place  of  payment. — The  parties  have  the 
same  freedom  in  arranging  terms,  as  in  other  contracts.  Sub- 
ject to  the  rule  requiring  that  the  payment  should  not  be 
made  contingent  upon  any  uncertain  event,  they  are  at  liberty 
to  make  notes  and  bills  payable  at  such  times  and  places  as 

1  So  held  in  an  action  on  the  above  instrument,  counted  upon  as  a  promissory 
note;  13  Conn.,  279. 

•  Clute  T.  Small,  17  Wend.  R.,  238;  10  Wend.  R.,  93. 

'  17  Wend.,  238;  10  Wend.,  93;  and  13  Conn.,  279,  and  the  cases  there 
cited. 

4  Hunt  v.  Adams,  6  Mass.  R.,  519.  An  immaterial  alteration,  such  as  inter- 
lining a  word  which  the  law  would  supply,  does  not  affect  the  validity  of  a  note  ; 
and  there  is  a  class  of  cases  in  which  there  is  an  implied  assent  that  proper  and 
necessary  words  may  be  supplied. 

8 


154  BILLS   OF  EXCHANGE  AND    PROMISSORY   NOTES. 

they  may  find  convenient,  i  Though  made  payable  at  ever  so 
distant  a  day,  if  it  be  a  day  that  must  come,  it  is  no  objection 
to  the  bill.  Nor  is  it  necessary  that  a  note  or  bill  should  be 
made  payable  at  a  fixed  or  specified  period  of  time :  they  are 
often  made  payable  on  demand  or  at  sight,  or  so  many  days 
after  demand  or  sight,  and  it  is  not  certain  when  the  demand 
will  be  made  or  the  bill  presented ;  2  and  they  are  sometimes 
made  payable  on  the  happening  of  an  event  which  is  certain, 
but  uncertain  as  to  the  precise  time  when  it  will  take  place; 
as  where  they  are  made  payable  on  the  death  of  a  person 
named.  3  It  is  required  only  that  the  time  be  such  as  may  be 
ascertained  and  fixed,  and  that  it  be  not  in  the  power  of  the 
promisor  to  delay  the  time  of  payment  or  prevent  the  matu- 
ring of  the  note.  4  For  the  time  of  payment  must  not  be 
dependent  upon  the  conduct  or  volition  of  the  party  bound.  5 
It  is  necessary  that  bills  and  notes  should  be  so  drawn  as  to 
shew  the  time  when,  or  the  event  on  the  happening  of  which 
they  are  to  become  due  and  payable;  if  no  time  be  speci- 
fied the  law  adjudges  that  the  money  is  payable  immediately.  6 
For  certain  purposes  it  is  payable  on  demand  :  7  for  others  it 
is  by  operation  of  law,  payable  immediately,  s  and  draws 
interest  from  date.  9  The  same  rule  applies  to  checks  drawn 
on  banks,  which,  being  made  payable  generally,  are  payable 
on  demand;  but  if  post-dated,  they  are  payable  on  or  after  the 

1  Coleham  v.  Cooke,  Willes,  396;  7  Term  R.,  427;  2  Bar.  and  C.,  157. 

*  Chitty  on  Bills,  150,  llth  American  ed. 

*  Willes  R.,  396,  and  cases  there  cited. 

*  See  the  authorities  requiring  that  notes  and  bills  be   payable  absolutely, 
and  the  action  on  a  note  in  these  words  :  "  borrowed  of  J.  S.,  50J  which  I 
promise  never  to  pay."     2  Doug.,  214.     The  word  never  is  treated  as  repug- 
nant to  the'note,  and  rejected.     So  it  has  been  held  that  a  note  by  which  the 
maker  promised  to  pay  a  certain  sum  "  when  it  is  convenient  "  is  due  within 
a  reasonable  time. 

5  Goss  v.  Nelson,  1  Burr.  R.,  226;  Stevens  v.  Blunt,  7  Mass.  R.,  240. 

*  Thompson  v.  Ketchum,  8  John.  R.,  190;  Herrick  v.  Bennett,  id.  874. 

7  Whitlock  v.  Underwood,  2  Barn,  and  Cress.,  157;  Lobdel  v.  Hopkins  5 
Cowen,  516;  Bacon  v.  Page,  1  Conn.,  404;  2  McCord,  246. 

*  7  Term  R.,  427 ;  7  Cowen  R.,  337. 

*  Gaylord  v.  Van  Loan,  15  Wend.  R.,  308. 


REQUISITES    OF.  155 

day  of  the  date,  at  sight,  or  upon  the  presentment  thereof  at 
the  bank,  i 

When  bills  of  exchange  and  notes  are  made  payable  so 
many  months  after  date,  the  time  is  computed  by  calendar  and 
not  by  lunar  months.  2  And  when  there  are  no  days  of  grace 
allowed,  as  on  a  note  not  negotiable,  or  on  a  check,  and  the 
time  for  payment  or  performance  specified  in  the  contract  falls 
on  Sunday,  the  debtor  may  discharge  his  obligation  on  the  fol- 
lowing Monday.  3  As  to  negotiable  paper,  when  the  last  day 
of  grace  falls  on  Sunday,  the  payment  is  to  be  made  on  the 
Saturday  previous;  the  three  being  in  that  case  reduced  to 
two  days  of  grace.  4 

The  time  of  payment  should  be  plainly  expressed,  in  order 
that  the  same  may  be  demanded  at  the  proper  time,  so  as  to 
charge  the  indorsers.  For  this  reason  it  is  said  that  an  instru- 
ment that  does  not  specify  any  time  for  payment  is  not  a 
promissory  note;  as  where  it  was  drawn  in  general  terms  for 
the  payment  of  six  pounds  in  instalments,  without  mentioning 
any  time  when  the  same  were  to  fall  due.  5 

Where  a  bill  is  made  payable  at  sight  or  so  many  days  after 
sight,  the  time  of  payment  is  fixed  by  the  act  of  the  holder; 
but  he  is  bound  to  present  the  same  within  a  reasonable  time, 
and  must  use  diligence  in  doing  so,  to  the  end  that  the  period 
may  commence  from  which  the  payment  is  to  be  made.  6 
What  is  to  be  deemed  reasonable  time,  or  due  diligence  in  this 
case,  depends  upon  circumstances;  for  there  is  no  fixed  and 

1 10  Wend.,  804;  and  Mohawk  Bank  v.  Broderick,  13  Wend.,  133;  Gongh 
T.  Staats,  id.  549. 

*  Leffingwell  v.  White,  1  John.  CM.,  99;  McMurchy  T.  Robinson,  10  Ohio 
R.,  496;  Cockell  v.  Gray,  8  Brod.  and  Bing.,  187;  Lang  v.  Gale,  1  Maule  and 
Selw.,  111. 

'  Salter  v.  Burt,  20  Wend.  R.,  205;  Avery  v.  Stewart,  2  Conn.  R.,  69.  In 
Maryland  a  different  rule  prevails,  and  payment  moat  be  made  on  Saturday. 
Kilgonr  v.  Miles,  6  Gill,  and  John.,  268. 

4  2  Hill  R.,  378;  Jackson  v.  Richards,  2  Caines,848;  12  John.  R.,  428;  18 
John.,  430;  8  Wend.,  456.  So  as  to  the  Fourth  of  July;  Ransom  r.  Mack, 
2  Hill  R.,  587;  4  id.  129. 

•Moffatt  v.  Edwards,  1  Car.  and  M.,  16. 

•Robinson  v.  Ames,  20  John.  R.,  146. 


156  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

definite  time  prescribed  by  law.  i  In  like  manner  notes  pay- 
able on  demand  become  due  whenever  the  holder  chooses  to 
call  for  payment;  but  in  order  to  charge  the  indorser,  pay- 
ment thereof  must  be  demanded  within  a  reasonable  time.  2 
The  facts  being  ascertained,  it  is  for  the  court  to  decide  what 
is  reasonable  time,  as  a  question  of  law.  3  In  doing  this,  they 
look  at  the  whole  transaction,  and  consider  every  fact  that  has 
any  bearing  upon  the  question;  such  as  the  residence  of  the 
parties,  the  sickness  of  the  holder,  the  solvency  of  the  maker, 
and  other  matters  of  that  character,  tending  to  shew  whether 
the  delay  was  reasonable  or  not.  4  When  a  note  is  indorsed 
and  transfered  after  it  is  due,  it  comes  under  the  same  rule 
and  is  to  be  considered  and  treated  as  a  note  payable  on  de- 
mand. 5 

It  is  not  necessary  to  make  notes  and  bills  payable  at  any 
particular  place.  Nevertheless,  it  is  very  convenient  to  name 
the  place  of  payment  in  the  body  of  the  instrument;  and  when 
this  is  done,  it  should  be  presented  at  that  place  for  payment.  6 
The  effect  of  omitting  to  present  a  note  or  a  bill  of  exchange 
at  the  place  named  for  payment,  which  we  shall  consider  more 
at  length  in  another  connexion,  is  to  waive  all  the  advantages 
arising  from  that  part  of  the  engagement.  True,  it  does  not 
discharge  the  maker  of  the  note,  or  the  acceptor  of  a  bill ;  nor 
is  it  incumbent  upon  the  holder,  as  against  maker  or  acceptor, 
to  aver  presentment  and  demand  at  the  particular  place  men- 
tioned, in  order  to  entitle  himself  to  recover  thereon.  7  Still, 
there  is  no  doubt  of  the  promisor's  right  to  shew  his  readiness 

1  Gowan  v.  Jackson,  20  John.  R.,  176.  Six  months  was  not  considered  an 
unreasonable  delay  in  this  case.  As  to  what  will  excuse  delay  in  the  present- 
ment, see  Aymar  v.  Beers,  7  Cowen,  705. 

*  Sice  v.  Cunningham,  1  Cowen  R.,  397. 

3  Tindall  v.  Brown,  1  Term  R.,  167;  1  Cowen,  397;  7  id.  706. 

4  3  Wend.  R.,  75;  and  cases  above  cited.     See  3  Hill,  582;  2  John.  R.,  244. 
6  Van  Hoesen  v.  Van  Alstyne,  3  Wend.  R.f  75. 

6  Herring  v.  Sanger,  3  John.  Cas.,  71. 

7  Caldwell  v.  Cassidy,  8  Cowen,  271;  Wolcott  v.  Van  Santvoord,  17  John. 
R.,  248.     In  this  case  Ch.  J.  Spencer  reviews  the  English  authorities  on  the 
subject,  and  holds  that  it  is  not  necessary  to  aver  that  a  bill  payable  at  a  par- 
ticular bank,  has  been  presented  at  that  place  for  payment. 


REQUISITES    OF.  157 

and  willingness  to  pay  at  the  time  and  place  agreed  upon,  in 
bar  of  the  plaintiff's  costs  and  damages  on  the  note.  But  it 
seems  that  his  answer  should  be  in  the  nature  of  a  plea  of  ten- 
der; i  and  that  the  failure  to  demand  payment  should  be  al- 
leged, not  as  a  defence  to  the  action,  but  as  a  bar  to  the  plain- 
tiffs right  to  recover  damages.  2  The  rule  has  been  held  dif- 
ferent, where  a  note  is  made  payable  on  demand  at  a  par- 
ticular place.  3  "  Where  a  person  contracts  generally  to  pay 
a  sum  of  money,  he  is  liable  to  the  creditor  everywhere :  but 
when  a  person  binds  himself,  even  by  bond,  to  pay  at  a  par- 
ticular place,  then  he  is  not  holden  at  any  other  place;  and 
the  demand  must  be  made  upon  him  there.  So  here,  the 
defendants  having  contracted  to  pay,  on  demand,  at  a  particu- 
lar place,  are  not  liable  but  upon  a  demand  at  that  place."  4 
Upon  principle,  the  distinction  we  have  just  mentioned  does 
not  appear  well  founded.  To  charge  the  indorser  of  a  note 
made  payable  at  a  particular  bank,  a  demand  must  be  made 
at  that  place.  And  it  is  conceded  that  the  obligation  of  the 
indorser,  inasmuch  as  it  arises  out  of  the  same  contract  and 
becomes  absolute  upon  the  happening  of  one  contingency,  is 
regulated  upon  the  principle  that  applies  to  the  maker.  His 
engagement  is  to  pay  the  note,  provided  it  is  not  paid  accord- 
ing to  its  terms,  and  he  is  properly  notified  of  the  non-pay- 
ment; and  the  place  of  payment  being  incorporated  into  the 
body  of  the  note,  becomes  a  part  of  the  undertaking.  5  And 
where  this  is  the  case,  the  common  law  rule,  as  settled  in  Eng- 
land, requires  that  the  holder  should  aver  and  show  a  demand 
at  the  place  of  payment.  6  In  regard  to  the  maker,  there  is 

1  Fenton  v.  Goundry,  13  East,  478. 

*  Ruggles  v.  Patten,  8  Mass.  R.,  480. 

*  Sanderson  v.  Bowes,  14  East,  507;  6  Taunt.,  80;  16  East,  112. 

4  Per  Mr.  Justice  Bayley,  in  Sanderson  v.  Bowes,  14  East,  507;  Haxton  v. 
Bishop,  3  Wend.,  13.  On  a  bank  note  payable  at  a  particular  place,  it  is  not 
necessary  in  this  state  to  aver  or  prove  a  demand,  in  an  action  against  the 
maker. 

'  See  the  dissenting  opinion  in  Wolcott  v.  Van  Santvoord,  17  John.,  248. 

*  19  John.  R.,  391 ;  Saunderson  v.  Judge,  2  H.  Black.,  509;  Parker  T.  Gor- 
don, 7  East  R.,  385;  1  Campb.  N.   P.  R.,  423;  2  Taunt.,  61;  2  Campb.,498, 
649;  3  Taunt.,  337;  13  East,  459;  14  id.  50;  1 '»  id.  110;  5  Taunt.,  30;  844; 
Butterworth  T.  Le  Deipencer,  3  Maule  and  Selw.,  150;  and  4  id.,  4;2. 


158  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

no  good  reason  for  saying  that  the  failure  of  the  holder  to  pre- 
sent a  note  for  payment  at  the  proper  place  should  operate  as 
a  discharge  of  the  debt;  and  this  is,  in  short,  the  ground  upon 
which  our  decisions  proceed,  i  At  the  same  time  it  cannot 
be  averred  that  the  maker  of  such  a  note  has  failed  to  pay  it 
at  the  place  appointed;  neither  can  it  be  assumed  as  a  conclu- 
sion of  law  that  the  place  is  immaterial,  where  the  parties  have 
made  it  parcel  of  the  contract.  2  The  rule,  however,  is  impor- 
tant mainly  as  one  of  evidence  and  pleading;  for  whether  the 
place  of  payment  is  held  an  essential  part  of  the  contract,  so 
that  it  is  necessary  to  set  forth  the  note  or  bill  according  to  its 
terms  and  aver  a  failure  to  pay  at  the  time  and  place  desig- 
nated, or  otherwise,  there  never  has  been  any  question  as  to 
the  holder's  right  to  recover  against  the  party  primarily  liable 
on  the  instrument,  notwithstanding  his  neglect  to  present  it  on 
the  very  day  it  becomes  due  at  the  place  of  payment.  3  And 
it  is  at  length  settled,  in  England  by  statute,  and  in  this 
country  by  the  general  current  of  authorities,  that  a  bill  of 
exchange  made  or  accepted  payable  at  a  particular  place  is  to 
be  treated  as  a  bill  payable  generally,  unless  it  is  expressly 
made  payable  at  that  place  alone.  4 

It  is  idle  to  make  a  bill  of  exchange  payable  in  a  particular 
city  without  naming  some  house  or  bank  at  which  it  is  to  be 
paid;  and  if  the  drawee  does  not  reside  in  the  city  named  as 
the  place  of  payment,  it  is  not  at  all  necessary  that  the  bill 
should  be  sent  to  that  place  and  there  protested  for  non-pay- 
ment. 5  The  law  requires  no  useless  ceremony,  and  therefore 
the  absence  of  the  party  from  the  place  of  payment  dispenses 
with  the  necessity  of  going  to  the  place  where  it  is  known  the 

1  Foden  v.  Sharp,  4  John.  R  ,  183;  17  John.  R.,  248;  8  Cowen,  271. 

*  Rowe  v.  Young,  2  Brod.  and  Bing.,  180.     This  case  adjudges  that  in  Eng- 
land the  place  of  payment  is  a  material  part  of  the  note,  necessary  to  be  stated 
in  pleading.     See  also  act  of  1  and  2  Geo.  4,  ch.  78. 

*  Wallace  v.  M'Connell,  13  Peters'  Sup.  Ct.  R.,  36. 

4  Statute  of  1  and  2  Geo.  4,  ch.  78;  and  13  Peters'  R.,  36;  5  Leigh,  522;  1 
Gill,  and  Johnson,  175;  8  Mass.  R.,  480;  4  Halst.  N.  J.  R.,  189;  2  Yerger 
R.,  81;  11  Wheat.  R.,  172;  13  Peters,  136. 

*  Mason  v.  Franklin,  8  John.  R.,  202;  Boot  &  Bentley  v.  Franklin,  3  John. 
R..  207. 


REQUISITES   OF.  159 

party  cannot  be  found.  But  if  it  be  made  payable  at  a  par- 
ticular place  in  the  city,  it  is  certainly  necessary  to  present 
the  note  there  for  payment  for  the  purpose  of  charging  the 
indorser.  i  But  even  in  this  case,  if  a  personal  demand  of 
payment  is  made  upon  the  maker  of  a  note,  and  no  objection 
is  made  by  him  as  to  the  place,  it  is  sufficient.  2  Being  made 
payable  at  large,  it  is  due  at  any  and  every  place;  but  for  the 
purpose  of  charging  the  indorser  it  must  be  presented  for  pay- 
ment to  the  maker  personally,  or  at  his  residence  or  place  of 
business.  3  However,  if  the  maker  of  the  note  leaves  the 
state  after  making  it,  or  absconds  within  the  state,  or  leaves 
his  residence  without  acquiring  any  other,  it  is  not  necessary 
to  follow  him  or  seek  him  in  his  concealment.  4  But  if  a  note 
is  made  in  this  state  by  a  person  who  is  known  to  reside  in  a 
foreign  state,  the  payment  must^be  demanded  at  the  maker's 
residence,  and  notice  of  his  failure  to  pay  must  be  given  as 
usual  to  the  indorser.  5 

Mr.  Justice  Beardsley  thus  states  the  exceptions  to  the  gen- 
eral rule.  6  1.  When  the  maker  has  absconded,  that  will 
ordinarily  excuse  a  demand ;  and  notice  of  the  fact  is  sufficient 
to  hold  the  indorser.  2.  When  the  maker  is  a  seaman  on  a 
voyage,  having  no  domicil  in  the  state,  the  indorser  is  liable 
without  a  demand  being  made;  but  if  he  has  a  domicil  in  this 
state,  although  he  be  absent  on  a  voyage,  payment  must  be 
demanded  there.  3.  Where  a  maker  has  no  known  residence 
or  place  at  which  the  note  can  be  presented  for  payment. 
4.  Where  a  note  is  made  by  a  resident  of  the  state,  who, 
before  it  is  payable,  removes  from  the"  state  and  takes  up  a 
permanent  residence  elsewhere,  the  holder  need  not  follow 
him  to  make  demand,  but  it  is  sufficient  to  present  the  note 
for  payment  at  the  former  place  of  residence  of  the  maker. 

1  3  John.  R.,  207,  202. 

•  Herring  v.  Sanger,  3  John.  Gas.,  71. 

•  Taylor  v.  Snyder,  3  Denio  R.,  145;  Spies  v.  Gilmore,  1  Comst.  R.,  321,  and 
*es  there  cited. 

4  Anderson  v.  Drake,  14  John  R.,  114;  3  Denio  R.,  145. 

•  Spies  v.  Gilmore,  1  Comst.,  321. 
•8  Denio,  151;  1  Comat.,  826. 


160  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

These  exceptions  all  rest  on  peculiar  reasons.  In  the  first, 
the  maker  has  absconded;  in  the  second,  he  is  temporarily 
absent,  and  has  no  domicil  or  place  of  business  within  the 
state;  in  the  third,  his  residence,  if  any  he  has,  cannot  be 
ascertained;  while  in  the  fourth,  he  has  removed  out  of  the 
state  and  taken  up  his  residence  in  another  country.  In  each 
of  these  instances,  the  fact  constituting  the  excuse,  occurs 
subsequently  to  the  making  and  indorsement  of  the  note;  and 
it  is  this  new  and  changed  condition  of  the  maker,  by  which 
the  indorser  stands  committed,  without  a  regular  demand. 
And  this  is  just :  for  it  is  but  reasonable  to  suppose  that  neither 
party,  when  the  note  was  given,  looked  for  this  new  and 
changed  condition  of  the  maker,  and  that  each  contracted 
upon  the  supposition  that  no  such  change  would  take  place,  i 
Where  there  are  two  joint  makers  of  a  note  who  are  not 
partners,  the  presentment  must  be  made  to  each,  in  order  to 
charge  the  indorser  :  and  so  where  there  are  two  joint  indor- 
sers  of  a  note,  it  is  incumbent  upon  the  holder  to  give  to  each 
of  them  notice  of  protest,  or  non-payment.  2  But  where  the 
joint  makers  or  indorsers  are  partners  in  business,  the  rule  is 
different;  and  it  is  sufficient  to  present  the  note  to  one  of  the 
firm  for  payment,  or  to  give  notice  to  one  of  the  partners  that 
it  has  not  been  paid.  3  And  for  the  same  reason,  if  one  of 
the  firm  be  dead,  it  is  sufficient  to  present  a  note  made  by  the 
concern  to  the  surviving  partner  for  payment,  at  his  place  of 
business  :  4  and  it  is  not  necessary  to  serve  a  notice  of  non- 
payment upon  the  representatives  of  a  deceased  partner,  it 
being  served  upon  the  survivor. 

Order  to  pay. — Bills  of  exchange  must  be  so  drawn  as  to 
imply  a  direction  to  the  drawee  to  pay  the  amount  for  which 
they  are  given.  As  we  have  already  seen,  a  request  to  let  the 
bearer  have  a  certain  sum  of  money  as  a  matter  of  favor,  is 

1  Per  Ch.  J.  Jewett,  in  Spies  v.  Gilmore,  1  Comst.,  327. 

*  Willis  v.  Green,  5  Hill  R.,  232;  1  Conn.  R.,  367. 

•  3  Cowen,  126;  Cayuga  Co.  Bank  v.  Hunt,  2  Hill  R.,  635. 
4  2  Hill  R.,  635. 


REQUISITES   OF.  «161 

not  a  valid  bill,  i  The  theory  is  that  the  drawer  has  funds 
in  the  hands  of  the  drawee  which  he  orders  or  directs  to  be 
delivered  or  paid  over  to  the  payee  or  indorsee  of  the  bill. 
And,  consequently,  where  the  instrument  is  so  written  as  to 
shew  that  the  drawer  has  no  right  to  order  the  money  paid,  it 
is  not  a  bill  of  exchange.  2 

Foreign  bills  of  exchange  are  usually  drawn  in  several 
parts,  the  whole  of  each  making  up  what  is  called  a  set. 
Commonly  the  drawer  delivers  to  the  payee  three  bills  of  the 
same  tenor  and  date;  and  each  of  these  contains  a  condition 
that  it  is  to  be  paid,  provided  the  others  remain  unpaid ;  and 
all  of  them  collectively  amount  to  one  bill,  and  a  payment  to 
the  holder  of  either  is  good,  and  a  payment  of  one  of  the  set 
is  payment  of  the  whole.  3  It  is  said  that  where  one  engages 
to  deliver  a  foreign  bill,  he  is  obliged  on  request  to  deliver  as 
many  parts  as  may  be  applied  fur;  the  object  of  drawing  them 
in  parts  being  to  furnish  the  holder  with  an  original  bill  in 
case  one  or  more  of  them  is  lost.  4  But  whatever  be  the 
number  of  parte,  it  is  important  that  the  condition  inserted  in 
each  should  mention  every  other  part  of  the  set;  otherwise 
the  drawer  might  in  some  cases  be  compelled  to  pay  the  bill 
twice  over.  Thus,  if  the  drawer  make  the  first  bill  without 
any  reference  to  any  other  part,  and  draw  the  second  payable 
on  condition  the  first  has  not  been  paid ;  and  the  second  is 
first  presented  and  paid,  and  the  first  falls  into  the  hands  of  a 
third  person  and  is  transfered  to  a  bona  fide  holder,  he  might 

>  Mood,  and  M.,  171. 

•Chitty  on  Bills,  154. 

»  3  Kent's  Com  ,  109;  Wells  T.  Whitehead,  15  Wend.  R.,  527. 

4  Chitty  on  Bills,  155.     The  bill  is  drawn  in  something  like  this  form  : 

New-York.  June  1,  1856. 

No.  10,  ex.  £250  stg.  Thirty  days  after  sight  of  this  ray  first  of  exchange, 
(second  and  third  unpaid.)  pay  to  Messrs.  6.  W.&.  Co.,  or  order,  two  hundred 
and  fifty  pound  sterling,  value  received,  and  charge  the  same  to  account  of  A. 
B.  To  Messrs.  T.  W.  &  Co.,  London. 

The  second  and  third  vary  in  only  two  particulars;  the  second  is  payable 
after  sight  of  this  my  second  of  exchange,  the  first  and  third  being  un- 
paid; and  the  third  is  payable  after  sight,  the  first  and  second  being  unpaid. 


162%  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

be  compelled  to  pay  it  the  second  time,  i  But  where  the 
several  parts  are  drawn  in  the  usual  manner,  each  referring  to 
the  other  parts,  payment  of  one  is  payment  of  the  set;  and  if 
one  of  them  is  transfered  by  indorsement  to  a  third  person,  it 
vests  in  him  the  right  to  the  possession  of  the  whole  set.  And 
if  the  payee  to  whom  the  several  parts  are  delivered,  as  in 
due  course  of  business  they  ought  to  be,  negotiates  different 
parts  of  the  same  bill  to  different  persons,  he  is  answerable  on 
each.  Eeing  both  the  payee  and  acceptor  of  the  bill,  he  is 
responsible  on  as  many  parts  as  he  puts  in  circulation.  2 

In  an  action  on  the  second  part  of  a  foreign  bill  of  ex- 
change, by  the  indorsee  against  the  indorser  for  non-accept- 
ance, it  has  been  adjudged  by  the  U.  S.  Supreme  Court  that 
the  holder  is  entitled  to  recover  upon  the  second  of  the  set 
without  producing  the  first,  or  accounting  for  its  non-produc- 
tion. 3  In  delivering  the  opinion  of  the  court  Mr.  Story  J. 
says :  "  The  object  of  drawing  a  foreign  bill  in  sets  is  for  the 
convenience  of  the  payee,  or  other  holder,  to  enable  him  to 
forward  the  same  for  acceptance  by  different  conveyances,  and 
thus  to  guard  against  any  loss,  by  accident  or  other  wise,  which 
might  occur  if  there  were  but  a  single  bill.  But  from  the  very 
frame  of  the  set,  if  one  is  paid  or  discharged  by  the  ac- 
ceptor, or  other  party  liable  on  it,  he  is  ordinarily  discharged 
from  the  others;  since  each  part  contains  a  condition,  that  it 
shall  be  payable  only  when  the  others  remain  unpaid.  Now, 
when  one  of  the  set  is  protested  for  non-acceptance,  and  due 
notice  is  given  to  an  indorser,  and  on  the  trial  of  an  action 
brought  against  him  by  the  indorsee,  the  same  bill  of  the  set 
on  which  the  protest  is  made  is  produced,  that  is  prima  facie 
proof  of  his  being  responsible  thereon.  Either  of  the  set 
may  be  presented  for  acceptance,  and,  if  not  accepted,  a  right 
of  action  presently  arises  upon  due  notice  against  all  the  an- 
tecedent parties  to  the  bill,  without  any  others  of  the  set  being 
presented;  for  it  is  by  no  means  necessary  that  all  the  parts 

1  Davison  v.  Robertson,  3  Dow.,  218,  228. 

•  Holsworth  v.  Hunter,  10  Bar.  and  C.,  449;  Perrina  v.  Goff,  15  B.  and  C., 
450. 

*  Downes  et  al.  v.  Church,  13  Peters,  205. 


REQUISITES    OF.  163 

should  be  presented  for  acceptance  before  a  right  of  action 
accrues  to  the  holder.  Under  such  circumstances,  it  is  pro- 
perly a  matter  of  defence  on  the  other  side,  to  shew  either 
that  some  other  bill  of  the  set  has  been  presented  and  ac- 
cepted, or  paid;  or  that  it  has  been  presented  at  an  earlier 
time  and  dishonored,  and  due  notice  has  not  been  given;  or 
that  another  person  is  the  proper  holder,  and  has  given  notice 
of  his  title  to  the  party  sued;  or  that  some  other  ground  of 
defence  exists,  which  displaces  the  prima  facie  title  made  out 
by  the  plaintiff.  The  law  will  not  presume  that  the  other 
bills  of  the  set  have  been  negotiated  to  other  persons,  merely 
because  they  are  not  produced.  And  the  indorser  is  not  put 
to  any  hazard  or  peril  by  the  non-production  of  them ;  since, 
like  the  acceptor,  if  he  once  pay  the  bill,  without  any  notice 
of  any  superior  adverse  claim,  by  a  negotiation  of  another  of  the 
set  to  another  party,  he  will  be  completely  exonerated.  On 
the  other  hand,  great  inconveniences  might  arise  from  com- 
pelling the  plaintiff  to  produce  the  other  parts  of  the  set,  or  to 
account  for  their  non-production;  as  he  might  not  be  able 
satisfactorily  to  prove  that  they  had  not  been  negotiated,  or 
that  they  had  been  lost." 

In  this  state  it  has  been  decided,  in  an  action  against  the 
indorser,  that  the  identical  bill  dishonored  must  be  produced 
on  the  trial ;  and  the  court,  arguendo,  assumes  that  all  of  the  set 
should  be  produced  in  the  case  of  a  foreign  bill,  and  especially 
the  part  protested.  5  The  reason  given  is  this :  where  the  bill 
has  been  protested  for  non-acceptance,  any  person  may  accept 
it  supra  protest  for  the  honor  of  the  bill,  the  drawer,  or  any 
particular  indorser;  and  as  the  person  accepting  supra  protest 
subjects  himself  to  the  same  obligations  as  if  the  bill  had  been 
directed  to  him,  he  has  a  remedy  against  all  the  persons  for 
whose  honor  he  accepts  and  against  all  others  liable  to  them, 
for  his  responsibilities  assumed,  the  same  as  if  he  acted  under 
their  direction.  And  therefore  the  drawer  and  the  indorser, 
in  order  to  prevent  the  possibility  of  his  becoming  responsible 

1 16  Wend.  R.,  627. 


164  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

in  this  manner,  has  the  right  to  call  for  the  production  of  that 
part  of  the  bill  which  has  been  dishonored,  i 

To  prevent  mistakes  and  double  payment,  neither  party  to 
the  bill  should  pay,  unless  the  part  protested  is  presented  and 
surrendered.  For  if  the  drawer  pays  on  receiving  the  second 
of  the  set,  the  indorser  not  aware  of  the  fact  may  be  misled 
and  be  induced  to  pay  again  on  receiving  the  first  accompanied 
with  notice  of  the  protest.  2  For  some  purposes  all  the  parts 
of  the  set  constitute  but  one  bill ;  but  they  are  not  one  so  that 
the  protest  of  either  is  a  protest  of  all,  nor  so  as  to  dispense 
with  the  necessity  of  suing  on  that  particular  bill  which  has 
been  dishonored.  3 

We  have  already  seen  that  bills  and  notes  should  specify  to 
whom  they  are  to  be  paid,  so  as  to  leave  no  uncertainty  in 
respect  to  the  person  entitled  to  demand  and  receive  the  con- 
tents, or  negotiate  the  instrument;  that  there  should  be  no 
uncertainty  in  the  name  or  description  of  the  person  entitled 
to  recover  thereon;  4  that  a  note,  having  a  blank  left  for  the 
name  of  the  payee,  and  negotiated  in  that  shape,  though  it 
contain  an  authority  to  the  bona  fide  holder  to  fill  up  the 
blank,  is  not  a  promissory  note  until  that  is  done;  5  and  that 
when  made  payable  to  a  fictitious  person  it  may  sometimes  be 
treated  as  payable  to  bearer.  8 

Words  of  negotiability. — There  are  no  fixed  terms  necessary 
to  be  used  to  render  bills  and  notes  negotiable :  any  words  in 
a  bill  or  note  from  whence  it  can  be  infered  that  the  person 

1  For  the  purpose  of  protesting  the  bill,  it  is  not  necessary  to  produce  the 
identical  bill  dishonored;  indeed,  a  copy  of  the  bill  need  not  accompany  the 
notice  of  protest.  Kenworthy  v.  Hopkins,  1  John.  Gas.,  108;  15  Wend.  R., 
530;  10  Mass.  R.,  5;  2  Esp.  R.,511;  3Campb.,334. 

8  Durkin  v.  Henderson,  7  John.  R.,  442. 

*  15  Wend.,  627;  13  Peters,  205. 

4  Walrad  v.  Petrie,  4  Wend.,  575;  U.  States  jv.  White,  2  Hill  R.,  59;  5  N. 
Hamp.,  244. 

*  13  Conn.,  279.    What  was  said  in  this  case  as  to  one  blank  will  apply 
equally  to  others. 

3  Hill  R.,  113.  The  statute  in  this  state  makes  all  notes  payable  to  a  ficti- 
tious person  payable  to  bearer. 


REQUISITES   OF.  166 

making  it  intended  it  to  be  negotiable,  will  give  it  a  transfer- 
able quality  against  him. l  The  usual  mode  of  making  notes 
and  bills  and  checks  transferable  is  by  drawing  them  payable 
to  a  certain  person,  or  order,  or  bearer,  or  to  the  order  of  the 
drawer,  or  to  bearer  generally.  But  these  terms,  be  it  observ- 
ed, do  not  of  their  own  force  render  the  instrument  trans- 
ferable; they  have  that  effect  only  when  used  in  parol  contracts 
which  the  law  recognizes  as  capable  of  possessing  negotiable 
qualities.  2  An  instrument  containing  a  promise  for  the 
payment  of  money,  executed  under  seal,  though  in  the  form 
of  a  promissory  note,  is  not  negotiable,  and  cannot  be  trans- 
fered  by  indorsement  as  a  note  of  hand.  3  It  is  the  custom  of 
merchants,  adopted  into  the  mercantile  code,  that  renders  bills 
of  exchange  capable  of  assignment  in  this  manner;  and  it  is 
the  statute  that  places  promissory  notes  upon  the  same  footing 
as  bills,  in  regard  to  their  negotiability. 

When  a  note  is  not  made  payable  to  a  certain  person  by 
name,  adding  "  or  bearer,"  or  the  words  "  or  order,"  it  must 
have  inserted  in  it  terms  of  equivalent  import,  in  order  to 
make  it  negotiable.  4  But  it  may  be  made  payable  generally 
to  bearer,  as  bank  notes  are  generally  drawn;  and  in  this 
case  it  is  transferable  by  delivery.  5  When  made  payable  to 
a  certain  person  by  name  or  bearer,  it  is  transferable  without 
indorsement;  but  if  the  payee  choose  to  put  his  name  on  the 
back  of  it,  he  becomes  bound  as  an  indorser  just  the  same  as 
if  the  note  had  been  made  payable  to  him  or  order.  6  So, 
where  a  note  is  drawn  payable  to  the  person  who  shall  there- 
after indorse  the  same,  it  is  a  negotiable  note;  and  the  person 
who  writes  his  name  on  the  back  of  it,  becomes  liable  on  it  as 

1  United  States  v.  White,  2  Hill  R.,  59. 

1  Warren  v.  Lynch,  5  John.  R.,  239.  Any  note  is  transferable,  though  it  be 
not  negotiable  in  form;  and  a  negotiable  note  may  be  transfered  by  assign- 
ment, the  same  as  if  not  negotiable.  9  Barb.,  214;  18  id.  314;  17  id.  530. 

'  Clark  v.  Farmers'  Manufacturing  Co.,  15  Wend.  R.,  256;  in  some  of  the 
states  the  law  is  different. 

4  Fennon  v.  Farmer,  1  Har.,  (Del.,)  82. 

'  Bullard  v.  Bell,  1  Mason  R.,  252. 

'  Brush  T.  Reeves,  8  John.  R.,  439;  The  Bank  of  England  r.  Newman,  1 
Lord  Raym.,  442;  1  Green,  246. 


166  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

an  indorser.  i  Under  the  statute  of  Ohio,  notes  payable  to 
any  person  or  to  bearer,  are  in  like  manner  transferable  by 
indorsement.  2 

When  a  note  or  bill  is  drawn  in  the  usual  form  of  negotiable 
paper,  it  is  not  vitiated  or  restricted  by  the  addition  of  words 
specifying  a  place  or  bank  where  it  is  payable  and  negotiable  ;3 
as  where  a  note  is  made  payable  to  the  order  of  a  certain  per- 
son named,  with  these  words  added,  "  payable  and  negotiable 
at  the  Bank  of  Ontario."  Making  it  negotiable  at  a  particular 
bank,  the  maker  authorizes  the  bank  to  pay  it  out  of  his  funds 
on  deposit,  or  by  advancing  the  amount  on  his  credit.  4 

In  this  state  it  is  provided  by  statute  that  a  promissory  note 
made  payable  to  the  order  of  the  maker  thereof  or  to  the 
order  of  a  fictitious  person,  shall,  if  negotiatd  by  the  maker, 
have  the  same  eifect,  and  be  of  the  same  validity,  as  against 
the  maker  and  all  persons  having  knowledge  of  the  facts,  as 
if  payable  to  the  bearer.  5  Under  this  provision,  it  is  not 
necessary  for  the  holder  of  a  note  payable  to  the  order  of  the 
maker,  to  shew  an  indorsement  of  it;  for  the  holder  may 
recover  on  it  against  the  maker,  though  he  negotiated  it  with- 
out indorsement.  6  The  same  rule  prevails  in  other  states.  7 
And  the  same  reason  applies  to  a  note  made  payable  to  a  ficti- 
tious person,  and  transfered  by  the  maker;  for  it  is  not  to  be 
tolerated  that  the  maker  should  be  permitted  to  draw  his 
note  payable  to  the  order  of  a  non-existent  person,  and  nego- 
tiate it  in  that  shape,  and  then  escape  the  payment  because  the 
holder  cannot  trace  his  title  through  a  fiction.  8 

To  make  bills  of  exchange  negotiable,  they  must  be  made 
capable  of  assignment  according  to  the  custom  of  merchants; 

2  Hill  R.,  59. 

Fallis  v.  Griffeth,  Wright,  303. 

Wardell  v.  Hughes,  3  Wend.  R.,  418. 

Mandeville  v.  Union  Bank,  9  Cranch  R.,  11. 

2  R.  S.,  3d  ed.  53. 

Plets  v.  Johnson,  3  Hill  R.,  112. 

Titcomb  v.  Thomas,  5  Greenl.  R.,  282;  Myers  v.  James,  2  Bai.  R.,  547; 
Dole  v.  Weeks,  4  Mass.  R.,  451;  5  id.  97;  5  Pick.,  526;  1  Watts  and  Serg., 
418,420;  1  Mason,  243,  252;  1  Verm.,  317;  1  Green,  246;  5  Smedes  and 
Marsh,  378. 
8  Minet  v.  Gibson,  1  Hen.  Bla.,  569;  3  Hill  R.,  112. 


REQUISITES    OF.  167 

and  this  is  sometimes  done  by  indorsement,  and  sometimes  by 
delivery  only.  Indorsement  is  a  term  known  in  law,  which, 
by  the  custom  of  merchants,  transfers  the  property  of  the  bill 
or  note  to  the  indorsee,  and  is  usually  made  on  the  back  of 
the  bill  or  note,  and  must  be  in  writing,  i  "  Where  the 
validity  or  the  effect  of  an  assignment  is  called  in  question, 
the  custom  must  be  appealed  to;  and  the  custom  directs  that 
the  assignment  should  be  made  by  a  writing  on  the  bill  or 
note,  appointing  the  contents  thereof  to  be  paid  to  some  third 
person,  and  in  respect  of  bills  drawn  payable  to  bearer,  that 
the  assignment  should  be  made  by  delivery  only,"  2  From 
this,  it  is  apparent  that  a  bill  or  note,  whenever  it  is  designed 
to  give  it  a  negotiable  character,  must  be  so  drawn  that  it  can 
be  assigned  or  transfered  in  the  manner  just  mentioned.  3 

In  France,  bills  and  notes  that  have  no  assignable  quality 
are  treated  as  mere  evidences  of  contract,  and  are  not  con- 
sidered as  entitled  to  any  of  the  privileges  of  negotiable  paper.  4 
In  Scotland,  the  words  "or  order"  need  not  be  used;  and  a 
bill  or  note  in  that  country  may  be  effectually  indorsed  by 
the  payee  without  them.  5 

At  common  law,  notes  and  bills  are  valid  as  such,  though 
not  negotiable.  6  And  in  this  state  they  are  now  assignable, 
like  other  choses  in  action;  but  it  has  been  generally  held 
that  the  indorsee  of  such  a  note  cannot  sue  the  maker  there- 
on, in  his  own  name,  and  derive  his  title  to  the  instrument 
through  the  usual  indorsement.  7  Still,  the  indorser  of  such 
a  note  is  liable  on  it  to  his  indorsee.  The  indorsement  in  such 
a  case  is  said  to  be  equivalent  to  the  making  of  a  new  note; 

I  Cunn.  on  Exchange  Law,  43. 

I 1  H.  Black.,  605,  per  Ch.  J.  Eyre. 

'Douglass  v.  Wilkeson,  6  Wend.,  637.  A  note  cannot  be  transfered  in 
part.  If  drawn  for  $2,500,  and  the  payee  indorses  on  the  back  of  it  "  pay  oo 
within  $750,"  it  is  ineffectual  as  an  indorsement. 

4  Story  on  Bills,  §  62;  Chitty  on  Bills,  159. 

•Thompson  on  Bills,  101. 

•  Smith  v.  Kendall,  6  Term  R.,  123  j  2  Lord  Raym.,  1545;  Goshen  T.  Co.  v. 
Hustin.  9  John.  R.,  217;  3  Caines,  137;  Noland  T.  Ringgold,  SHarr.  and  John. 
216,  218;  15  Maine,  131 ;  10  Gill,  and  John.,  300. 

7  2  Dall.,  249;  3  Harr.  and  John., 216;  8  Wend.,  404;  7  Barb.  R.,  204. 


168  BILLS   OF  EXCHANGE  AND  PROMISSORY    NOTES. 

or  to  an  undertaking  on  the  part  of  the  indorser  to  pay  the 
note  to  the  indorsee.  This  is  the  doctrine  that  has  been  re- 
peatedly sanctioned  in  this  and  other  states,  i  However,  if 
a  guaranty  be  written  upon  the  back  of  such  a  note,  it  is  un- 
questionably a  contract  by  itself,  to  be  enforced  according  to 
its  terms,  subject  to  the  statute  of  frauds.  2 

Sum  payable. — We  have  already  seen  that  bills  and  notes 
must  express  the  sum  for  which  they  are  given  in  the  body  of 
the  instrument;  and  that  an  instrument  in  the  form  of  a  note 
given  for  a  blank  sum,  though  superscribed  with  the  correct 
amount  and  transfered  in  that  condition,  is  not  a  promissory 
note.  3  Whatever  be  the  superscription,  the  words  and  figures 
used  in  the  body  of  the  note  or  contract  are  to  govern;  4  for 
the  reason  that  the  first  is  only  a  memorandum,  while  the  lat- 
ter is  a  part  of  the  contract.  A  discrepancy  between  them 
may  without  doubt  be  corrected,  so  as  to  make  the  note  con- 
form to  the  actual  agreement  between  the  parties;  but  the  note 
or  bill  cannot  be  recovered  on  as  such,  until  the  correction 
has  been  made.  5 

How  far  the  holder  of  a  note  has  authority  to  interline  or 
fill  up  the  instrument  does  not  seem  to  be  perfectly  settled.  6 
But  it  is  clear  that  he  has  no  right  to  alter  it  in  any  material 
particular;7  that  he  cannot  change  the  place  of  payment;  3 
that  he  cannot  alter  the  amount  inserted  in  the  body  of  the 
instrument,  without  having  either  the  actual  or  implied  con- 
sent of  the  parties  to  it;  9  that  he  cannot  insert  negotiable 
words  where  these  have  been  intentionally  omitted;  10  and  that 

1  Seymour  v.  Van  Slyck,  8  Wend.  R.,  421 ;  12  John.  R.,  159;  17  id.  326;  4 
Hill  R., 420;  6Cranch,  222;  4  Mass.  R.,  258;  Griswoldv.  Slocum,  10  Barb., 402. 

*  Brown  v.  Curtis,  2  Comst.  R.,  225;  4  Selden  R.,  207. 

*  Norwich  Bank  v.  Hyde,  13  Conn.  R.,  279;  10  Wend.,  93. 
4  Saundersonv.  Piper,  5  Bing.  N.  C.,  425. 

8  10  Wend.,  93;  13  Conn.,  279. 

*  10  Wend.,  93;  Clute  v.  Small,  17  Wend.,  238;  24 id.  374;  1  Denio  R.,  120, 
3  Barb.  R.,  374;  13  Conn.  R.,  379;  7  Cowen,  336. 

T  Herrick  v.  Malen,  22  Wend.,  388;  19  John.  R.,  391;  22  Wend.,  374. 

•19  John.  R.,  391. 

•10  Wend.,  93;  17  id.  238. 

*  Bunce  v.  Wescot,  3  Barb.,  374. 


REQUISITES   OF.  169 

where  he  makes  a  material  alteration  in  the  note  or  bill  with- 
out authority,  he  thereby  renders  it  void,  i 

Value  received. — In  France,  these  words  are  necessary  to 
be  used;  and  at  common  law  where  an  action  of  debt  was 
brought  upon  the  instrument,  it  was  formerly  held  that  they 
were  an  essential  part  of  the  bill.  2  But  it  is  now  settled  that 
value  received  is  implied  in  every  negotiable  bill  or  promis- 
sory note;  3  so  that  in  the  first  instance  it  is  not  necessary  to 
allege  or  prove  any  consideration  for  the  promise  to  pay.  4  In 
notes  not  negotiable  the  words  "  value  received "  are  prima 
facie  sufficient  to  cast  upon  the  defendant  the  burden  of 
proving  that  there  was  no  consideration.  5  And  it  is  held 
that  every  note  which  is  within  the  statute,  unless  there  be 
something  on  the  face  of  the  instrument  to  the  contrary,  im- 
ports a  consideration;  and  this  presumption  stands  good  until 
the  defendant  destroys  it.  6  As  the  law  now  stands,  it  is  dif- 
ficult to  assign  any  legal  reason  for,  or  to  point  out  any  ad- 
vantage to  be  derived  from  the  use  of  the  words  value  re- 
ceived, in  negotiable  paper.  7  When  used,  they  are  an  ex- 
press acknowledgment  that  value  has  been  received,  and  as 
between  the  original  parties  to  the  note  they  have  always 
been  held  good  evidence  of  money  had  and  received.  8  And 
when  they  are  not  used  in  a  negotiable  instrument,  the  law 
implies  a  consideration,  or  rather  raises  a  presumption  that 
the  same  has  been  given  for  value.  9  But  as  between  the  im- 

'19  John.,  391;  17  Wend.,  238;  and  authorities  above  cited. 

•  Chitty  on  Bills,  160;  1  Show.,  5;  2  Bos.  and  Pull.,  78,  81. 

'  Benjamin  v.  Tillman,  2  McLean,  213;  Townsend  r.  Derby,  3  Metcalf,  363; 
15  Maine,  131;  1  Denio  R.,  116;  9  Wend.,  273;  13  id.  557. 

4  4  Hill  R.,  442. 

'Jerome  v.  Whitney,  7  John.  R.,  321.  This  action  was  on  an  instrument 
payable  in  neat  cattle. 

•  9  John.  R.,  217. 

1  Hatch  v.  Trayes,  11  Adolph  and  Ellis,  702;  Hughes  v.  Wheeler,  8  Cowen 
R.,  77,  and  cases  there  cited. 

•  Clerke  v.  Martin,  2  Lord  Raym.,  755;  Story  v.  Atkins, 2  Stra.,  719;  Grant 
v.  Yaughan,  3  Burr.   1516;  Smith  r.  Smith,  2  John.  R.,  235;  Arnold  r. 
Crane,  8  id.  81. 

•  8  Cowen  R.,  83. 

9 


170  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

mediate  parties  to  the  note  this  presumption  may  be  over- 
come; for  it  has  never  been  held  that  a  note  is  to  be  deemed 
conclusive  evidence  of  the  receipt  of  money,  or  of  an  account 
stated,  i 

The  statute  of  Anne,  as  we  have  adopted  it,  provides  that 
"  all  notes  in  writing,  made  and  signed  by  any  person,  where- 
by he  shall  promise  to  pay  to  any  other  person,  or  his  order, 
or  to  the  order  of  any  other  person,  or  unto  the  bearer,  any 
sum  of  money  therein  mentioned,  shall  be  due  and  payable  as 
therein  expressed;  and  shall  have  the  same  eifect,  and  be  ne- 
gotiable in  the  same  manner  as  inland  bills  of  exchange,  ac- 
cording to  the  custom  of  merchants."  2  The  effect  ol  this 
statute  is  two-fold :  first,  in  making  a  promissory  note  evi- 
dence per  se,  of  money  due,  so  that  it  may  be  declared  on  like 
a  specialty;  and,  secondly,  in  making  it  negotiable.  Before 
the  statute  such  a  note  was  evidence  of  money  due  from  the 
maker  to  the  payee;  and  since  the  statute,  the  assignee,  by  in- 
dorsement or  delivery,  is  entitled  to  the  same  remedy  thereon.  3 

Where  a  note  is  expressed  to  be  for  value  received,  the 
terms  raise  a  presumption  of  a  legal  consideration  sufficient 
to  sustain  the  promise;  but  this  presumption  may  be  rebutted.  4 
For  between  the  original  parties  the  consideration  of  a  prom- 
issory note  may  be  enquired  into;  and  where  there  is  no  con- 
sideration for  the  promise,  though  one  be  admitted  on  the  face 
of  the  instrument,  it  is  nudum  pactum,  and  cannot  be  enforced 
at  law.  5  When  a  sufficient  consideration  appears  on  the  face 
of  a  bill  or  note,  it  has  been  questioned  whether  the  acceptor 
or  maker  can  attack  the  instrument,  except  for  fraud  or  ille- 

1 1  H.  Black..  239;  3  B.  and;?.,  559;  1  East,  432:  3  Burr.  1516. 
*2R.  S.,  3ded.  62. 

*  Pierce  v.  Crafts,  12  John.  R.,  90;  3  Burr.  1516;  Cruger  v.  Armstrong,  3 
John.  Gas.,  5;  19  John.  R.,  217.    Prior  to  the  statute,  promissory  notes  were 
generally  drawn  so  as  to  express  the   fact  that  they  were  given  for  value  re- 
ceived; and  since  that  time  the  form  has  been  preserved.     So,  bills  were  origi- 
nally drawn  in  such  a  manner  as  to  shew  the  consideration  for  which  they  were 
given ;  and  this  is  still  very  common. 

*  Halliday  v.  Atkinson,  5  Barn,  and  Cress.,  501. 

*  Schoonmaker  v.  Roosa,  17  John.  R.,  301;  Pearson  v.  Pearson,  7  John.  R., 
26;  8  id.  120;  7  Term.  R.,  350;  Slade  v.  Halsted,  7  Cowen  R.,  321. 


REQUISITES   OF.  171 

gality.  i  But  it  is  perfectly  well  settled  that  though  given 
with  an  admission  of  value  received,  it  may  be  defeated,  by 
showing  either  a  want  or  a  failure  of  the  consideration.  -2 

Coupling  with  the  words,  value  received,  other  terms  sug- 
gestive of  a  good  motive,  but  an  insufficient  consideration  for 
a  valid  promise,  does  not  vitiate  a  note;  as  where  it  was  given 
"  for  value  received  and  his  kindness  to  me."  3  Nor  will  proof 
of  the  fact  that  a  note  acknowledging  value  received,  was 
given  in  lieu  of  a  legacy,  by  a  person  in  solvent  circumstances, 
prevent  the  payee  from  recovering  on  it  against  the  maker's 
representatives :  at  least  it  has  been  so  held  in  Massachusetts.  4 
And  there  are  cases  in  which  a  moral  consideration  has 
been  held  sufficient  to  support  a  promise  of  this  kind.  5 

The  words,  value  received,  when  used  in  a  promissory  note 
import  very  plainly  that  value  has  been  received  by  the  maker 
from  the  payee :  6  when  used  in  a  bill  of  exchange  they  are 
capable  of  two  interpretations;  either  that  the  drawer  has 
received  value  from  the  payee,  or  that  the  drawee  has  value 
in  his  hands  received  from  the  drawer  ot  the  bill;  but  the 
more  natural  interpretation  is  that  the  party  who  draws  the 
bill  should  inform  the  drawee  of  a  fact  which  he  does  not 
know  than  one  of  which  he  must  be  well  aware.  7  However, 
where  the  drawer  of  a  bill  makes  it  payable  to  his  own  order, 
"  value  received,"  it  is  held  that  this  must  mean  value  received 
by  the  drawee.  3  But  as  these  terms  are  not  necessary  to  be 
used  in  a  bill,  they  need  not  be  noticed  in  pleading,  and  they 
do  not  materially  affect  the  construction  to  be  placed  upon 

1  Ridout  v.  Bristow,  1  Tyrw.  R.,  88;  Bowers  v.  Hurd,  10  Mass.  R.,  427. 

*7  John.  R.,  801;  7  Cowen  R.,  821;  Thatcher  v.  Dinsniore,  5  Mass.  R., 
299,  302;  Parish  v.  Stone,  14  Pick.,  198;  6  id.  891;  1  Hill  R..  116. 

1  Woodbridge  v.  Spooner,  8  Bam.  and  Aid.,  233. 

4  10  Mass.  R.,  427;  see  Van  Duveer  v.  Wright,  6  Barb.  R.,  647. 

•Leev.  Muggeridge,  5  Taunt.,  86;  Tate  v.  Hulbert,  2  Ves.  jun.,  Ill;  4 
Br.  Ch.  Ca.  286.  A  mere  gift,  not  consummated,  such  aa  a  promise  to  pay 
money,  cannot  be  enforced  at  law.  6  Barb.  R.,  549. 

•  Clayton  v.  Gosling,  5  Barn,  and  Ores.,  860. 

T  Grant  v.  Da  Costa,  3  Maule  and  S.,  851,  per  Lord  Ellenborough ;  Cox  v. 
Slade,  3  Dev.,  8. 

•  Highmore  T.  Primrose,  5  Maule  and  S.,  65. 


172  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

the  instrument,  i  In  many  cases  it  is  no  doubt  convenient 
and  advisable  to  preserve  the  old  form ;  since  the  terms  value 
received,  when  employed  by  the  parties,  import  a  considera- 
tion and  naturally  imply  that  the  bill  is  not  accommodation 
paper;  2  but  even  in  this  case,  the  presumption  arising  from 
the  admission  of  a  consideration,  on  the  face  of  the  bill,  may, 
as  we  have  seen,  be  inquired  into  and  overcome  by  positive 
proof. 

Words  of  advice. — It  is  common  to  insert  in  bills  of 
exchange  words  of  advice,  specifying  to  what  account  the 
amount  directed  to  be  paid,  is  to  be  charged.  The  drawer 
sometimes  gives  to  the  drawee  a  general  direction,  in  words 
like  these,  "  and  charge  the  same  to  my  account;"  and  some- 
times makes  it  specific,  by  directing  the  payee  to  "  put  it  to 
the  account  of  A.  B.,"  or  "  to  the  Bedford  road  assessment," 
or  to  the  cargo  of  a  certain  ship,  or  to  a  particular  credit  estab- 
lished between  the  parties.  3  Where  the  drawee  is  indebted 
to  the  drawer,  the  proper  direction  is,  "  and  put  the  same  to 
your  account;"  and  so  in  other  cases,  the  advice  should  indi- 
cate to  what  account  the  contents  of  the  bill  are  to  be  placed.  4 

But  such  words  of  advice  are  not  at  all  essential  in  bills  of 
exchange :  5  when  used,  they  are  to  be  considered  in  deter- 
mining the  construction  to  be  given  to  the  instrument,  because 
they  indicate  the  intention,  and  often  serve  to  explain  the 
relation  existing  between  the  parties,  by  pointing  out  the  con- 
sideration for  which  they  are  given,  or  the  credit  upon  which 
they  are  drawn.  6 

Sometimes  bills  of  exchange,  especially  foreign  bills,  contain 
a  direction  to  charge  "  as  per  advice;"  and  in  this  case  the 

1  3  Maule  and  Selw.,  351 ;  Coombe  v.  Ingram,  4  Dowl.  and  Ryl.,  211 ;  4  Doug. 
R.,  247;  11  Adolph.  and  Ellis,  702. 

8  3  Maule  and  Selw.,  351,  per  Bayley,  J.  The  object  of  inserting  the  words 
"  value  received."  is  to  shew  that  it  is  not  an  accommodation  bill,  but  made 
on  a  valuable  consideration  given  for  it  by  the  payee. 

*  Chitty  on  Bills,  162;  Story  on  Bills.  §  65;  4  Hill  R.,  262. 

4  Leonard  v  Mason,  1  Wend..  522;  1  Hill  R.,  11;  4  id.  442. 

*  Laing  v.  Barclay,  1  Barn,  and  Ores.,  392;  1  Wend.,  522. 

1  Safford  v.  Wyckoff,  1  Hill  R.,  11;  4  Hill,  442;  1  Barn  and  Cres.,  392. 


REQUISITES   OF.  1*3 

drawee  has  a  right  to  wait  for  advices  before  accepting  or  pay- 
ing the  bill,  i  If  no  such  words  are  used,  or  if  the  direction 
be  to  charge  as  already  advised,  or  without  further  advice, 
there  is  no  necessity  for,  nor  propriety  in  waiting  for  letters 
of  advice.  2  It  is,  however,  customary  to  send  the  drawee  a 
letter  advising  him  of  the  draft,  and  describing  the  bill  in  a 
particular  manner;  and  this  is  certainly  the  more  prudent 
course,  in  order  to  prevent  fraud  and  give  the  drawee  such 
information  as  may  satisfy  him  that  the  bill  is  drawn  in  the 
usual  course  of  business.  But  the  validity  of  the  bill  does 
not  depend  upon  compliance  with  commercial  usage  in  this 
respect;  for,  legally  the  direction  as  to  the  mode  of  reimburse- 
ment does  not  operate  as  a  condition,  so  as  to  restrict  the  bill 
to  a  particular  fund.  3 

The  address. — A  bill  of  exchange,  being  an  open  letter  of 
request  for  the  payment  of  money,  must  be  regularly  addressed 
to  the  person  on  whom  it  is  drawn;  and  this  is  usually  done  at 
the  bottom,  on  the  left  hand  of  the  bill.  4  The  rule  is  that 
no  one  can  be  liable  as  acceptor  but  the  person  to  whom  the 
bill  is  addressed,  unless  he  be  an  acceptor  for  honor.  5  But 
the  address,  though  it  ought  to  be  to  the  drawee  by  his  name 
written  in  full,  will  be  good  where  it  sufficiently  indicates  the 
person  intended  as  the  drawee.  Thus,  where  a  bill  was  drawn 
payable  to  the  order  of  the  drawer  at  a  particular  house  in 
Wilmot  street,  without  being  directed  to  any  person  by  name, 
and  being  presented  at  that  place  was  accepted  by  Charles 
Milner;  it  was  held  that  the  instrument  was  clearly  a  bill  of 
exchange;  that  it  was  not  necessary  that  the  name  of  the 
party  who  afterwards  accepted  the  bill  should  have  been 
inserted,  it  being  directed  to  a  particular  place,  which  could 
only  mean  to  the  person  who  resided  there;  and  that  the 
defendant,  by  accepting  it  acknowledged  that  he  was  the 

1  Chitty  on  Bills,  162. 
» Idem. 

•  4  Hill  R.,  266; 

4  See  form  of  the  bill. 

•  Polhill  v.  Walter,  8  Bam.  and  Adol.,  114. 


174  BILLS    OF   EXCHANGE  AND    PROMISSORY  NOTES. 

person  to  whom  it  was  directed,  i  Chitty  speaks  of  this  as  a 
defective  bill,  and  suggests  that  the  subsequent  acceptance 
cures  the  original  imperfection;  but  the  court  treats  it  as  an 
informal  but  valid  bill. 

So,  a  bill  directed  to  A,  or  in  his  absence,  to  B,  being 
accepted  by  A,  may  be  declared  on  without  noticing  B.  2  But 
a  bill  cannot  be  addressed  to  one  man  and  accepted  by 
another.  3  Commonly  there  are  at  least  three  distinct  parties 
to  a  bill  of  exchange;  but  this  is  clearly  not  necessary,  for 
where  the  drawer  draws  upon  himself  the  bill  is  good  in  the 
hands  of  an  indorsee.  4  And  so  is  an  order  drawn  by  the 
president  of  a  corporation,  or  by  the  mayor  of  a  city  upon  its 
treasurer.  5  And  in  such  a  case,  there  being  no  funds  in  the 
hands  of  the  treasurer,  there  is  no  necessity  of  shewing  pre- 
sentment and  notice  of  non-payment,  any  more  than  there  is 
in  the  case  of  a  bill  drawn  by  the  maker  upon  himself.  6 
Such  a  bill,  in  legal  effect,  resembles  very  closely  a  promissory 
note;  the  parties  to  it  acting  as  the  agents  of  the  same  person, 
the  maxim  applies  that  when  the  reason  for  a  rule  of  law 
fails  the  rule  itself  ceases  to  operate.  7 

In  some  cases  the  holder  of  a  negotiable  instrument  has  an 
option  to  treat  it  either  as  a  promissory  note  or  as  a  bill  of 
exchange;  as  where  a  man  draws  a  bill  upon  himself,  8  or 
makes  a  note  payable  to  his  own  order  and  indorses  it  addressed 
to  a  person  who  writes  his  name  across  the  face  of  the  instru- 
ment as  an  acceptance,  and  it  is  delivered  in  this  shape  for 
value.  9  Such  an  instrument  is  a  cross  between  a  bill  and  a 

1  Gray  v.  Milner,  8  Taunt.,  739. 

s  12  Mod.,  447. 

1  Davis  v.  Clark,  13,  L.  J.,  305,  Q  B. 

4  Randolph  v.  Parish,  9  Porter,  76;  Wilds  v.  Savage,  1  Story,  22. 

6  Wetumpka  &  Coosa  R.  v.  Bingham,  5  Ala.,  657;  4  Hill  R.,  263. 
•  4  Hill  R.,  263;  17  Wend.,  94,  99;  21  Wend.,  375;  5  Ala.,  657. 

7  7  Wend.  R.,  168;  1  Doug.,  193. 

8  Roach  v.  Ostler,  1  M.  and  R.,  120. 

'  The  instrument  in  this  case  was  in  the  following  form  : 

£44  11s  5d.  London,  5th  August,  1833. 

Three  months  after  date,  I  promise  to  pay  Mr.  John  Bury,  or  order, 
forty-four  pounds,  eleven  shillings  and  five  pence,  value  received. 

John  Bury. 
J.  B.  Gurtherat, 35 Montague  Place,Bedford  Place.  Eddis  v.Bury,6  B.&C.,  433. 


REQUISITES    OF.  175 

note,  and  it  may  be  declared  on  as  either.  So  also,  it  seems 
that  a  draft  not  addressed  to  but  at  a  certain  house  may  be 
treated  as  a  promissory  note,  i 

Occasionally  the  drawer  of  the  bill  adds  below  the  address 
a  direction  like  this,  "  In  case  of  need  apply  to  Messrs.  -  — ; 

Jiu  besoin  chez  Messrs. ,  at         j"  the  design  of  which  is 

to  prevent  the  return  of  the  bill,  and  require  the  holder,  in 
case  the  drawee  does  not  accept  or  pay  the  bill  to  apply  to  the 
persons  named;  and  the  memorandum  is  itself  an  invitation 
to  the  house  so  pointed  out  to  become  parties  to  the  bill,  in 
the  nature  of  acceptors  for  honor.  2  Sometimes  the  drawer 
also  adds  a  direction  that  in  case  the  bill  is  not  honored  it  is 
to  be  returned  without  protest  or  without  expense,  or  that  the 
re-exchange  and  expenses  shall  not  exceed  a  specified  sum.  3 

Sometimes  a  promissory  note  has,  while  a  bill  of  exchange 
very  rarely  has,  a  subscribing  witness.  But  though  not  ne- 
cessary in  either,  if  there  be  an  attesting  witness  it  is  incum- 
bent upon  the  holder,  as  in  similar  cases,  to  call  him  in  the 
first  instance  to  prove  the  signature  to  the  instrument.  4  In 
relation  to  sealed  instruments  the  subscribing  witness  must  in 
all  cases  be  called,  or  his  absence  accounted  for;  but  if  being 
called  he  does  not  recollect  his  signature,  other  evidence  may 
be  introduced  to  prove  the  execution  of  the  instrument.  5  In 
regard  to  notes,  the  rule  has  been  relaxed  in  this  state  so  far 
that  the  admission  of  the  party  that  he  executed  the  instru- 

1  The  instrument  was  in  this  form : 

21st  October,  1804. 

Two  months  after  date,  pay  to  the  order  of  John  Jenkins,  £78  11s,  value 
received.  Thomas  Stephens. 

At  Messrs.  John  Morse n  &  Co.  Shuttleworth  v.  Stephens,  1  Campb.,  407; 
4  id.  116. 

*  Chitty  on  Bills,  165;  Story  on  Bills,  §  65. 

'  When  the  bill  is  to  be  returned  without  protest,  the  drawer  has  no  right  to 
insist  upon  notice  of  the  dishonor;  nor  can  the  holder  claim  damages  beyond 
the  amount  limited,  where  a  limit  has  been  inserted  in  the  bill.  Idem. 

4  Quinby  v.  Burrell.  16  Maine  R.,  470.  As  to  the  duty  of  calling  the  sub- 
scribing  witness,  and  what  will  excuse  the  failure  to  do  so,  see  1  Greenleaf  on 
Evidence,  §  669. 

*  Fox  v.  Reil,  8  John.  R.,  477;  Henry  v.  Bishop,  2  Wend.  R.,  675;  16 
Maine,  470,  Abbot  v.  Plumbe,  Doug.,  216. 


176  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

ment  may  be  shewn,  without  calling  the  subscribing  witness,  i 
And  the  court,  by  Mr.  Justice  Spencer,  repudiates  in  very  de- 
cisive terms  the  notion  that  those  who  attest  such  an  instru- 
ment are  agreed  upon  as  the  only  witnesses  to  prove  it,  and 
asserts  that  the  confession  of  the  maker  that  he  gave  the  note 
is  as  high  proof  as  that  derived  from  a  subscribing  witness. 
But  this  remark  applies  only  where  the  note  is  fully  identi- 
fied, and  there  is  no  chance  of  mistake  in  respect  to  what  the 
party  intended  to  admit.  2 

Under  the  statute  of  Anne  promissory  notes  payable  in  spe- 
cific articles,  and  bonds  made  under  seal,  are  not  negotiable 
paper :  but  in  some  of  our  states  they  are  placed  upon  the 
same  footing  as  inland  bills  of  exchange.  3 


CONSTRUCTION,  BY  WHAT  LAW. 

It  is  a  fundamental  principle  that  all  contracts  are  to  be 
construed  so  as  to  carry  into  effect  the  intention  of  the  con- 
tracting parties.  4  Where  the  language  employed  is  plain  and 
unambiguous,  there  is  no  room  and  no  occasion  for  interpre- 
tation. 5  On  the  other  hand,  where  the  words  used  admit  of 
two  interpretations,  the  rule  is  to  adopt  that  which  will  give 
effect  to  the  contract  according  to  the  understanding  of  the 
parties.  6  As  in  construing  other  writings,  common  sense  and 

1  Hall  v.  Phelps,  2  John.  R.,  451 ;  Shaver  v.  Ehle,  16  John  R.,  201;  Henry 
v.  Bishop,  2  Wend.  R.,  575.  The  English  statute  of  1854  adopts  the  same 
rule,  and  allows  such  instruments  to  be  proved  by  other  witnesses. 

2 16  John.  R.,  201.  Where  the  subscribing  witness  is  out  of  the  state,  it  is 
enough  to  prove  the  fact  and  his  handwriting,  without  proving  that  of  the 
maker  of  the  note.  Shiver  v.  Johnson,  2  Brevard,  397;  see  also  to  the  same 
effect,  Page  v.  Newman,  Mood,  and  M.,  79,  286. 

9  Foster  v.  Floyd,  4  M'Cord,  159;  Avery  v.  Latimer,  14  Ohio,  542;  Carew 
v.  Northrop,  5  Alabama,  367;  Bothick  v.  Purdy,  3  Missouri,  82;  5  id.  447; 
Hawkins  v.  Watkins,  5  Pike,  481 ;  3  Scammon  R.,  385;  8  Dana,  1;  5  Wharton, 
825;  5  Blackf.,  370;  15  Wend.,  256. 

4  2  Kent's  Com.,  553,555. 

*  The  maxim  is  :  quoties  in  verbis  nulla  est  ambiguitas  ibi  nulla  expositio 
contra  verbafienda  est.  Si  nulla  sit  conjectura  quae  ducat  alio,  verba  intel- 
ligenda  sunt  ex  proprietate,  non  grammatica  sed  populari  ex  usu. 

6  Archibald  v.  Thomas,  3  Cowen  R.,  284  j  Simpson  v.  Vaughan,  2  Atk.,  32. 


CONSTRUCTION   OF.  177 

sound  reason  are  to  guide  in  determining  the  meaning  of  the 
contract. 

In  the  first  place,  the  terms  and  language  of  the  instrument 
are  to  be  carefully  considered;  and  it  is  a  general  principle, 
applicable  to  all  agreements,  that  whatever  may  be  fairly  im- 
plied from  the  words  employed  is  to  be  taken  as  parcel  of 
the  contract,  i  The  several  parts  of  the  instrument  are  to  be 
read  together,  and  construed  one  with  another,  so  as  if  possi- 
ble to  arrive  at,  and  give  effect  to  the  intention  of  the  parties.  2 
But  if  the  intention  be  still  doubtful,  it  is  to  be  sought  for  in 
the  situation  of  the  parties,  and  in  the  subject  matter  of  the 
contract;  3  or  in  the  usage  and  course  of  trade  existing  at  the 
place  where  the  contract  is  to  be  carried  into  effect; 4  or  it 
may  be  shewn  that  the  terms  used  have  a  local  or  technical 
meaning  at  the  place  where  the  transaction  arose.  5  In  gene- 
ral, however,  extrinsic  evidence  cannot  be  received  to  contra- 
dict, vary  or  add  to  any  instrument  in  writing;  6  and  when  the 
operation  of  a  contract  is  clearly  settled  by  general  princi- 
ples of  law,  it  is  taken  to  be  the  true  sense  of  the  contracting 
parties. 

It  is  an  established  principle  that  the  construction  of  per- 
sonal contracts  is  to  be  regulated  by,  and  that  their  validity 
depends  upon,  the  laws  of  the  place  where  they  are  made; 
except  when  made  with  a  view  to  performance  in  some  other 
state  or  country,  and  then  the  law  of  such  country  is  to  pre- 
vail. 7  The  presumption  is  that  the  parties  have  respect  to 
the  law  of  the  place  where  they  contract,  and  that  the  agree- 
ment between  them  is  shaped  accordingly;  but  when  thecon- 

1  Rogers  T.  Knceland,  10  Wend.  R.,  218;  1  Peters,  501. 
1  Wilson  v.  Troup,  2  Cowen  R.,  196.     The  maxim  applies:  ex  anlecedentibut 
et  consequcntibut  optima  fit  interprttatio. 

*  Sentut  verborum  ex  cauta  dicentit  accipiendut  ett,  et  tecvndvm  tubjectam 
matenam.     1  Term  R.,  70S;  2  Bing.  R.,  619. 

«  Webb  v.  Plummer,  2  Barn,  and  Aid.,  746;  7  John.  R.,  886;  21  Wend. 
661. 

*  28  Wend.,  71;  2  Kernan  R.,  40.  Dana  v.  Fiedler. 

*  Jackson  v.  Sill,  11  John.  R.,  216. 

T  Chapman  v.  Robertson,  6  Paige  Ch.  R.,  627;  Prentiss  T.  Savage,  18  Mass. 
R.,  23;  Martin  T.  Hill.  12  Barb.  R.,  681. 


178  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

tract  is  to  be  carried  into  effect  and  performed  in  any  another 
state  than  that  in  which  it  is  made,  it  is  to  be  assumed  that 
the  parties  stipulated  with  reference  to  the  laws  of  that  state.  1 
But  if  there  be  nothing  in  the  contract  to  indicate  that  the 
parties  contracted  with  a  view  to  performance  in  any  other 
country,  it  is  to  be  carried  into  execution  according  to  the 
lex  loci  contractus.  2 

Of  course  the  laws  of  a  state  cannot  by  virtue  of  any 
authority  inherent  in  them,  be  entitled  to  respect  beyond  the 
jurisdiction  of  the  sovereignty  from  which  they  emanate :  that 
is  to  say,  they  do  not  ex  proprio  vigore  extend  beyond  the 
boundary  of  the  state  by  which  they  are  enacted.  But  for 
the  mutual  convenience  of  nations,  carrying  on  extensive 
intercourse  with  each  other,  they  are  by  courtesy,  ex  comitate, 
admitted  to  control  the  nature,  construction,  validity  and  legal 
effect  of  contracts  entered  into  in  the  country  where  they 
exist.  3  Consequently,  when  a  contract  is  valid  in  the  place 
where  it  is  made,  it  is  to  be  considered  equally  valid,  and  to 
be  enforced  every  where;  with  the  exception  of  cases  in 
which  the  contract  is  immoral  or  unjust,  or  in  which  the 
enforcement  of  it  in  another  state  would  be  injurious  to  the 
rights,  the  interest  or  convenience  of  such  state  or  its  citizens; 
and,  on  the  other  hand,  when  a  contract  is  invalid  or  discharg- 
ed by  the  law  of  the  place  where  it  is  made  or  to  be  performed, 
it  is  to  be  considered  void  and  discharged  every  where.  4 

1  Thompson  v.  Ketchum,  8  John.  R.,  190;  Robinson  v.  Bland,  2  Burr.  1077. 

a  Blanchard  v.  Russell,  13  Mass.  R.,  1.  In  this  case  it  was  held  that  a  dis- 
charge under  the  insolvent  or  bankrupt  law  of  this  state,  was  a  good  bar  to 
an  action  brought  in  the  State  of  Massachusetts,  the  contract  in  suit  having 
been  made  in  this  state,  where  both  of  the  parties  resided  when  it  was  made. 

1  13  Mass.  R.,  1,  4;  11  Pick.  R.,  36-  2  Met.,  881. 

4  Pearsall  v.  Dwight,  2  Mass.  R.,  84;  Greeii  v.  Curtis,  6  id.  358;  13  id.  20; 
16  id.,  157;  1  Pick.,  506:  Lodge  v.  Phelps,  1  John,  Cas.,  139;  Smith  v.  Smith, 
1  John.  R.,  235;  Ruggles  v.  Keeler.  3  John.  R.,  263;  Thompson  v.  Ketcham, 
4  John.  R.,  285;  8  John.  R.,  189;  Warder  v.  Arell,  2  Wash.  R..  282;  Van 
Reimsdyke  v.  Kane,  1  Gall.  375;  Sherrill  v.  Hopkins,  1  Cowen  R.,  103; 
Powers  v.  Lynch,  3  Mass.  R.,  77;  Baker  v.  Wheaton,  5  id.  509;  12  id.  4;  13 
id.  153;  15  id.  354;  10  id.  337;  Van  Schaick  v.  Edwards,  2  John.  Cas.,  356; 
Smith  v.  Mead,  3  Conn.  R.  U.  S.,  253;  Harper  v.  Hampton,!  Harris  and 
Johnson  R.,  453,  662.  The  insolvent  laws  of  the  several  states  do  not  operate 
so  as  to  discharge  debts  due  to  citizens  of  other  states.  Gardner  v.  Oliver 
Lee's  Bank,  11  Barb.  R.,  658;  12  Wheat.,  213;  6  Peters,  348;  10  Met.,  697. 


CONSTRUCTION   OF.  179 

The  remedy  on  cotracts  is  regulated  according  to  the  law  of 
the  forum,  the  lexfori,  or  place  where  a  judicial  enforcement 
is  sought,  i  The  form  of  the  action  and  the  procedure,  no 
less  than  the  tribunal,  are  prescribed  by  the  state  creating 
them;  and  there  is  no  good  reason  why  the  courts  of  one 
country  or  state  should  permit  the  laws  or  usages  of  another  to 
prevail  over  its  own,  in  matters  of  form  and  remedial  justice.  2 
For  instance,  where  a  note  is  made  in  the  state  of  Connecticut 
payable  to  a  person  resident  in  this  state,  or  to  his  order,  and 
he  transfers  it  by  indorsement,  and  the  indorsee  brings  an 
action  upon  it  here  in  his  own  name,  it  is  not  a  good  defence 
to  shew  that  by  the  laws  of  Connecticut,  promissory  notes  are 
not  negotiable.  3  For  a  similar  reason,  when  an  inhabitant  of 
Connecticut  sues  here  upon  a  promissory  note,  and  the  defen- 
dant interposes  a  set-off  arising  there,  the  plaintiff  cannot 
plead  or  prove  the  statute  of  limitations  existing  in  that  state 
to  defeat  the  defendant's  claim;  because  such  statutes  are 
founded  on  local  policy  and  concern  only  the  remedy  of  the 
party  on  the  contract.  4  Prosecuting  his  demand  in  this  state, 
he  is  entitled  to  the  remedy  provided  by  our  laws.  5 

Formerly,  where  a  man  in  France  entered  into  a  contract 
to  be  performed  there,  and  the  fulfilment  of  it  could  not,  in 
that  country,  be  enforced  by  arrest,  it  was  adjudged  that  he 
could  not  be  holden  to  bail  in  England.  6  But  that  doctrine 
has  been  since  overruled,  and  it  is  now  settled  that  while  the 
contract  in  such  a  case  is  to  be  interpreted  according  to  the 
foreign  law,  the  remedy  must  be  taken  in  all  respects  accord- 

1  Fcnwick  v.  Sears,  1  Cranch,  259;  3  id.  819;  Nash  v.  Tapper,  1  Caines'  R.. 
402;  Ruggles  v.  Keeler,  3  John.  R.,  286;  2  id.  198;  11  id.  194;  2  Mass.  R., 
84;  1  B.  and  P.,  142;  7  Taunt.  R.,  244. 

'  Scoville  v.  Canfleld,  14  John.  R.,  838.  A  contrary  rule  would  require  our 
courts,  in  some  cases,  to  import  and  investigate  the  entire  system  of  practice 
established  in  a  foreign  state.  1  John.  Gas.,  139;  3  John.  R.,  263.  See  1  B. 
and  P.,  138,  and  2  East,  455;  4  Dall.,  419. 

*  Lodge  v.  Phelps,  1  John.  Cas.,  139,  Contra,  9  Barn,  and  C.,  215. 

4  Ruggles  T.  Keeler.  8  John.  R.,  264. 

• Smith  v.  Spinola,  1  John.  R.,  198;  Sicard  v.  Whale,  11  John.  R.,  194; 
Andrews  T.  Herriot,  4  Cowen  R.,  508,  and  the  learned  note  to  that  c**e. 

•Milan  v.  De  Fitzjames,  1  Bos.  and  Pul.,141;  Pedder  T.  MacMaster,  8 
Term  R.,  609;  Potter  T.  Brown,  5  East,  124. 


180  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

ing  to  the  law  of  the  place  where  it  is  sought,  i  The  person 
bringing  his  action  must  take  the  law  as  he  finds  it,  and  he  is 
not  to  be  aided  because  of  any  advantage  he  might  have  had, 
nor  hindered  because  of  any  disadvantage  he  might  have 
rested  under  in  another  state. 

In  those  cases  where  the  contract  is  made  in  one  state  to  be 
performed  in  another,  the  law  of  the  place  of  performance 
governs,  and  if  the  interest  allowed  by  the  laws  of  the  place 
of  performance  is  higher  than  that  permitted  at  the  place  of 
the  contract,  the  parties  may  stipulate  for  the  higher  interest, 
without  incuring  the  penalties  of  usury.  2  But  if  the  contract, 
such  as  a  bill  of  exchange,  is  tainted  with  usury,  concealed 
under  the  name  of  exchange  in  order  to  evade  the  law,  the 
question  is  not  which  law  is  to  govern  in  executing  the  con- 
tract, but  which  is  to  decide  the  fate  of  a  security  taken  upon 
an  usurious  agreement,  which  neither  will  execute.  It  may 
be  void  in  both  places,  but  the  same  consequences  do  not  fol- 
low in  both :  in  this  state  the  whole  sum  becomes  forfeited, 
while  in  another  only  the  interest  is  lost.  If  the  security  be 
given  on  an  usurious  loan  of  money  and  declared  void  for 
usury,  the  lender  has  in  this  state,  no  means  of  recovering  the 
actual  sum  lent;  but  in  several  of  the  states  the  law  does  not 
subject  him  to  any  forfeiture.  Hence  the  importance  of  deter- 
mining by  what  law  the  contract  is  to  be  passed  upon,  a  ques- 
tion which  is  answered  by  C.  J.  Taney  in  these  words : 
"  Unquestionably  it  must  be  the  law  of  the  state  where  the 
agreement  was  made,  and  the  instrument  taken  to  secure  its 
performance.  A  contract  of  this  kind  cannot  stand  on  the 
same  principles  with  a  bona  fide  agreement  made  in  one  place 
to  be  executed  in  another.  In  the  last  mentioned  cases  the 
agreements  were  permitted  by  the  lex  loci  contractus;  and 

1  Imlay  v.  Ellefsen,  2  East,  265;  De  la  Vegar  v.  Vianna,  1  Bar.  and  Adol., 
284. 

9  Andrews  v.  Pond,  13  Peters'  R.,  65.  This  action  was  on  a  bill  of  exchange 
drawn  in  New-York,  where  the  rate  of  interest  is  seven  per  cent.,  on  a  firm  in 
Mobile,  Alabama,  where  the  rate  of  interest  was  eight  per  cent,  and  it  was 
conceded  that  the  higher  rate  of  interest  was  rightly  included  in  the  bill. 
Hosford  v.  Nichols,  1  Paige  R.,  220;  Houghton  v.  Page,  2  N.  Hamp.  R.,  42; 
Thompson  v.  Powles,  2  Simons  R.,  194. 


CONSTRUCTION    OF.  181 

will  even  be  enforced  there,  if  the  party  is  found  within  its 
jurisdiction.  But  the  same  rule  cannot  be  applied  to  contracts 
forbidden  by  its  laws  and  designed  to  evade  them.  In  such 
cases,  the  legal  consequences  of  such  an  agreement  must  be 
decided  by  the  law  of  the  place  where  the  contract  was  made. 
If  void  there,  it  is  void  everywhere."  i 

Where  a  contract  is  made  in  one  country  to  be  executed  in 
another,  as  where  a  promissory  note  is  made  in  Lower  Canada 
for  the  payment  of  money  in  England,  with  interest  till  paid, 
the  rate  of  interest  allowed  at  the  place  of  payment  is  payable 
thereon.  2  This  assumes  that  the  law  of  the  place  of  perform- 
ance is  the  criterion  by  which  the  contract  is  t3  be  interpreted; 
and  it  is  conceded  that  the  parties  may  stipulate  for  a  higher 
rate  of  interest  than  that  allowed  at  the  place  where  the  con- 
tract is  made,  not  exceeding  the  rate  of  interest  permitted  in 
the  state  where  it  is  to  be  carried  into  execution.  3 

The  true  theory  is  that  contracts  made  in  one  state  to  be 
performed  in  another  are  to  be  upheld  or  invalidated  according 
to  the  law  of  the  place  where  they  are  to  be  fulfilled :  if  made 
in  New- York  to  be  performed  in  Illinois,  they  are  to  be  carried 
into  effect  according  to  the  terms  of  the  agreement,  provided 
they  do  not  come  into  conflict  with  any  law  of  that  state,  and 
are  not  void  at  the  place  where  they  are  made.  Mr.  Justice 
Harris,  in  a  recent  case  decided  in  our  Court  of  Appeals,  states 
the  doctrine  thus :  4  "It  is  a  general  rule  of  international  law, 
that  the  rights  of  the  parties  to  a  contract,  as  distinguished 
from  their  remedies,  are  to  be  determined  by  the  law  of  the 
place  where  the  contract  is  to  be  performed.  If  a  contract  be 

1  13  Peters'  R.,  78;  Story's  Conflict  of  Laws,  203;  De  Wolf  v.  Johnson,  10 
Wheat.,  883;  8  Term  R.,  426. 

1  Scofield  v.  Day,  20  John.  R.,  102. 

1  Fanning  v.  Consequa,  17  John.  R.,  511;  Harvey  v.  Archibald,  1  Ryan  and 
Mood.  R  ,  184. 

4  Hyde  v.  Goodnow,  8  Comst.  R.,  266.  The  action  was  on  two  notes  signed 
in  Ohio,  and  expressed  to  be  for  value  received,  in  two  policies  of  insurance; 
the  notes,  which  were  void  by  the  laws  of  that  state,  being  delivered  in  this 
state  where  the  insurance  was  made  upon  and  after  their  delivery.  The  case 
was  decided  in  1850,  and  was  made  to  tarn  upon  the  fact  that  the  contract  was 
made  here,  and  not  in  Ohio. 


182  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

made  in  one  state  or  country,  and  it  appears  upon  its  face  that 
it  is  to  be  performed  in  another,  it  will  be  presumed  that  the 
contract  was  entered  into  with  referance  to  the  laws  of  the 
latter,  and  these  laws  will  be  resorted  to  in  ascertaining  the 
validity,  obligation  and  effect  of  the  contract.  This  general 
rule,  however,  has  its  exceptions;  one  of  which  is,  that  where 
a  contract  is  declared  void  by  the  law  of  the  state  or  country 
where  it  is  made,  it  cannot  be  enforced  as  a  valid  contract  in 
any  other,  though  by  its  terms  it  was  to  have  been  performed 
there.  Thus,  assuming  that  the  contracts  in  question  had  been 
made  in  Ohio,  and  that  by  the  laws  of  that  state  such  con- 
tracts are  declared  void,  the  courts  of  this  state  would  be 
bound  also  to  declare  them  void,  though  by  their  terms  they 
were  to  have  been  performed  here,  and  though  if  made  here 
they  would  have  been  valid  contracts.  This  exception  is 
required  by  that  just  comity  and  public  convenience  upon 
which  all  international  law  is  founded." 

It  is  not  material  on  a  question  of  usury,  where  the  contract, 
note  or  other  security  is  dated  or  signed;  for  the  place  where 
they  are  delivered  is  the  place  of  execution.  This  is  the 
general  rule;  but  the  mere  fact  that  notes  made  in  New-York, 
where  the  transaction  took  place,  are  sent  to  the  payee  and 
received  by  him  in  Connecticut,  does  not  bring  them  under 
the  laws  of  that  state.  The  true  question  appears  to  be, 
where  was  the  contract  entered  into  1  If  the  facts  and  circum- 
stances shew  clearly  that  it  was  a  Connecticut  transaction, 
the  courts  of  this  state  will  give  effect  to  the  contract  accor- 
ding to  the  laws  of  that  state;  though  it  be  for  the  renewal 
of  an  invalid  contract,  i  But  this  new  contract  must  be  such 
as  the  law  of  the  state  where  it  was  made  will  support;  for, 
"  usury  is  a  moral  taint  wherever  it  exists,  and  no  subterfuge 
will  be  permitted  to  conceal  it  from  the  eye  of  the  law  :  this 

1  Jacks  v.  Nichols,  3  Sand.  Ch.  R.,  313;  S.  C.,  5  Barb.  R.,  38;  S.  C.,  1  Sel- 
den  R.,  178.  The  contract  in  this  case  was  made,  and  the  notes  which  were 
delivered  in  Connecticut,  were  dated  in  New-York;  some  of  them  payable 
generally  and  others  payable  there ;  held  that  the  contract  must  be  considered 
an  entire  thing  and  as  having  been  made  in  the  state  of  New-York.  De  Wolf 
v.  Johnson,  10  Wheaton  R.,  367. 


CONSTRUCTION    OP.  183 

is  the  substance  of  all  the  cases,  and  they  only  vary  as  they 
follow  the  detours  through  which  they  have  had  to  pursue  the 
unconscientious  money-lender."  i 

Nevertheless  courts  of  law  do  not  eagerly  snuff  up  the  taint 
of  usury,  nor  do  they  in  any  case  seize  upon  it  as  a  pretext 
for  pronouncing  on  the  offender  a  judgment  of  forfeiture.  On 
the  contrary,  in  so  far  as  the  law  acts  vindictively  it  is  to  be 
construed  like  a  penal  statute. 

Mr.  Robertson,  a  resident  of  this  state,  applies  to  Mr.  Chap- 
man residing  in  England,  for  a  loan  of  money  to  be  secured  by 
his  bond  and  a  mortgage  on  a  lot  of  land  in  the  city  of  Hudson; 
the  agreement  for  the  loan  is  made  in  England,  the  securities 
are  executed  here,  bearing  an  interest  of  seven  per  cent  per 
annum,  and  transmitted  to  Mr.  C.  who  thereupon  deposits  the 
money  loaned,  to  the  credit  of  the  borrower  in  London, 
according  to  the  previous  arrangement  between  them  :  and  it 
is  held  in  this  state  that  the  contract  is  valid,  though  made  in 
England,  and  by  construction  payable  there,  where  the  legal 
rate  of  interest  is  less  than  that  for  which  the  parties  stipula- 
ted. 2  This  decision  corresponds  with  the  law  as  settled  in 
Louisiana;  where  it  is  adjudged  that  in  a  note  given  at  New 
Orleans,  upon  a  loan  of  money  made  there,  the  creditor  may 
stipulate  for  the  highest  legal  rate  of  conventional  interest 
allowed  by  the  laws  of  that  state,  although  the  rate  of  interest 
thus  agreed  to  be  paid  is  higher  than  that  which  can  be  taken 
on  a  loan,  by  the  laws  of  the  state  where  such  note  is  made 
payable.  3 

Mr.  Justice  Story  in  his  commentary  on  the  conflict  of  laws, 
leans  to  the  opinion,  that  the  mere  taking  of  a  security  upon 
lands  in  another  state  or  country,  on  a  loan  at  a  higher  rate  of 
interest  than  is  allowed  by  the  laws  of  the  place  where  such 
loan  is  made  and  the  security  given,  will  not  so  change  the 
locality  of  the  contract  as  to  protect  it  from  the  operation  of 
the  usury  laws  of  the  place  where  such  loan  is  made,  unless 

1  Per  Mr.  J.  Johnson,  10  Wheaton,  867. 

'  Chapmam  v.  Robertson,  6  Paige  Ch.  R.,  627.    The  case  arose  on  a  bill  to 
foreclose  the  mortgage  filed  in  this  state. 
*  Depean  v.  Humphreys,  20  Martin's  Rep.,  1. 


184  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

there  is  a  further  agreement,  either  express  or  implied,  that 
the  money  shall  be  repaid  at  a  place  where  the  rate  of  inte- 
rest reserved  upon  the  loan  is  allowed  by  law.  1  The 
English  decisions  are  to  the  same  effect,  especially  where  both 
of  the  parties  to  the  contract  reside  in  England,  and  the 
agreement  is  made  there,  though  the  security  be  upon  lands 
in  the  colonies.  2  But  no  doubt  appears  to  have  been  enter- 
tained there  as  to  the  validity  of  a  loan  upon  a  bond  and 
mortgage  actually  executed  in  Ireland  or  the  Colonies,  although 
the  loan  itself  was  made  in  England,  and  was  made  payable 
there  or  to  a  mortgagee  who  resided  there.  3  Indeed,  the 
precise  question  decided  in  this  state  does  not  appear  to  have 
arisen  in  England;  nor  is  it  easy  to  see  why  a  security  made 
in  this  state,  such  as  a  mortgage,  which  is  required  to  be 
executed  according  to  the  lex  situs  or  local  law  of  the  place 
where  the  property  is  situated,  should  not  be  enforced  here. 
For,  though  the  negotiation  is  commenced  and  finished  in 
England,  the  loan  is  in  fact  made  upon  the  faith  of  an  act 
done  here,  and  recognized  as  valid  by  the  laws  of  our  state.  4 
The  protest  is  said  to  be  a  part  of  the  constitution  of  a  for- 
eign bill  of  exchange.  The  form  is  therefore  properly  gov- 
erned by  the  lex  loci  contractus;  and  when  a  seal  to  the 
protest  is  required  by  that  law,  it  cannot  be  dispensed  with.  5 
Thus,  a  bill  drawn  in  this  state  on  a  person  residing  in  Boston 
must  be  presented  for  acceptance,  or  for  payment,  and  the 
notice  of  non-acceptance  or  non-payment  must  be  given  to  the 
drawer,  6  and  to  such  persons  as  have  become  indorsers  of  it 
here,  according  to  the  laws  of  this  state.  7  In  effect  the 

1  Story's  Conflict  of  Laws,  238,  §  287. 

8  Dewar  v.  Span,  3  Term  R.,  425;  Stapleton  v.  Conway,  3  Atk.  Rep.,  727. 

•  6  Paige  R.,  632;  4  Geo.  3,  ch.  79. 

4  6  Paige  Ch.  R.,  627 ;  20  Martin  R.,  1 ;  The  Commonwealth  of  Kentucky  v. 
Bassford,  6  Hill  R.,  526,  discusses  the  question  as  to  how  far  the  laws  of 
another  state  are  to  be  adopted  here  when  the  contract  is  rendered  invalid  by 
the  statutes  of  this  state. 

5  Bank  of  Rochester  v.  Gray,  2  Hill,  R.,  227;  Tickner  v.  Roberts,  11  Louis. 
R.,  14.    The  days  of  grace  and  the  person  to  make  the  protest  are  prescribed 
by  the  place  of  payment. 

•  Townsley  v.  Sumrall,  2  Peters'  R.,  179, 180;  Story  on  Bills,  §  176,  177. 

7  2  Hill  R.,  227.    The  manner  or  mode  of  presenting  the  draft  cannot  be 
material,  if  done  in  the  usual  way. 


CONSTRUCTION    OF.  185 

drawer  agrees  that  the  drawee  will  accept  and  pay  the  bill ; 
and  that  in  case  it  is  not  accepted  or  not  paid,  he  will  himself 
pay  it,  provided  it  is  properly  protested  and  notice  of  the  fact 
given  to  him  as  required  by  the  law  of  the  place  where  he 
makes  the  contract,  i 

So,  in  respect  to  the  indorser;  the  nature  and  extent  of  his 
liabilities  are  to  be  determined  according  to  the  law  of  the 
place  where  the  indorsement  is  made.  2  The  contract  he 
enters  into  by  indorsing  is  equivalent  in  effect  to  the  drawing 
of  a  bill,  the  indorser  being  in  almost  every  respect  considered 
as  a  new  drawer.  3  Hence,  the  cases  which  determine  that 
the  nature  and  extent  of  the  obligation  of  the  drawer  are  to 
be  ascertained  and  settled  according  to  the  law  of  the  place 
where  the  bill  is  drawn,  are  equally  applicable  to  the  indorser; 
for,  in  respect  to  the  holder,  he  is  a  drawer.  And  it  is  an 
implied  condition  of  his  liability  that  the  notice  of  protest 
should  be  given  him  according  to  the  law  of  the  place  where 
he  contracts.  4  For  the  same  reason,  the  rate  of  damages  in 
an  action  against  the  indorser  is  governed  by  the  law  of  the 
place  where  the  indorsement  is  made,  being  regulated  by  the 
lex  loci  contractus.  5 

In  like  manner  and  on  the  same  principle,  the  maker  and 
indorser  of  promissory  notes  are  liable  thereon  according  to 
the  law  of  the  place  where  the  contract  is  made;  and  the 
extent  of  the  maker's  liability  is  prescribed  by  the  same  law.  6 
If  made  in  Kentucky,  and  an  action  is  brought  upon  it  against 
the  maker  in  the  state  of  Illinois,  he  may  avail  himself  of 
the  same  defence  allowed  by  the  laws  of  the  state  where  it 
was  made.  7  If  made  in  Massachusetts,  payable  generally 
without  naming  any  place  of  payment,  the  law  of  that  state 

1  Aymar  v.  Sheldon,  12  Wend.  R. ,  439. 

*  Hix  v.  Brown,  12  John.  R.,  142;  Peters  v.  Brown.  5  East,  124;  Van  Rangh 
v.  Armsdale,  3  Caines,  154;  1  Cowen,  107;  3  Mass.  R.,  81 ;  4  Cowen,  512  n ;  3 
Mass.  R.,  81;  6  Crancb,  i'L'1. 

1  3  East,  482;  2  Burr.  674;  1  Stra.,441;  12  Wend.,  439. 

4  12  Wend.,  444;  Allen  v.  Merchants'  Bank  of  New-York,  22  Wend.,  215. 

•6  Cranch,  21;  4  John.  R.,  119;  12  John.  R.,  UJ 

•  Harrison  v.  Edwards,  12  Verm..  648. 
7  Stacy  T.  Baker,  1  Scam.  R.,  417. 

10 


186  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

determines  its  construction  and  the  precise  time  when  it  is 
due  and  should  be  protested,  i  If  made  in  one  state  and 
indorsed  in  another,  the  contract  of  the  maker  is  governed  by 
the  law  of  his  state,  and  that  of  the  indorser  by  the  law  of 
his.  2  So,  where  a  note  is  guarantied  in  this  state,  and  an 
action  is  brought  upon  it  against  the  guarantor  in  another,  the 
lex  loci  regulates  the  rights  of  the  parties.  3 


DELIVERY. 

A  promissory  note  has  no  legal  inception  until  it  is  delivered 
to  some  person,  as  evidence  of  a  subsisting  debt.  4  Where  a 
note  was  made  payable  to  James  Averill  or  bearer  with 
interest,  and  never  delivered  to  the  payee,  but  transfered  to  a 
third  person;  it  was  held  that  the  note  had  its  inception  when  so 
transfered,  and  that  it  was  therefore  competent  for  the  makers 
to  shew  that  the  transfer  was  made  as  security  for  a  usurious 
loan.  5  The  reason  given  for  this  decision  is,  that  the  note 
does  not  constitute  a  contract,  and  has  no  binding  force  until 
it  is  delivered;  and  so  when  indorsed  by  the  payee  for  the 
accommodation  of  the  maker,  it  being  made  for  discount  at  a 
particular  bank,  it  is  rendered  void  if  discounted  by  another 
at  an  usurious  rate.  6  The  good  faith  of  the  parties  in  signing 
and  indorsing  the  note  will  not  protect  it  from  the  conse- 
quences of  a  subsequent  delivery  of  it  on  an  usurious  con- 
tract; for  the  note  has  its  inception  and  takes  its  character 
from  the  delivery,  and  not  from  the  signature  of  the  maker 
or  the  indorsement  of  the  indorser.  In  other  words,  the  use 
or  purpose  for  which  the  note  was  made  or  intended  is  imma- 
terial; since  it  is  the  application  of  it,  the  consideration  and 
purpose  for  which  it  is  negotiated  and  delivered  to  the  first 

1  Bank  of  Orange  Co.  v.  Colby,  12  N.  Hamp.,  520;  but  see  3  Kernan,  290. 

*  Dow  v.  Russell,  12  N.  Hamp.,  49;  Dunn  v.  Adams,  Ala.,  527;  Teatman 
T.  Cullen,  5  Blackf.,  240. 

1  Rowell  v.  Buck,  14  Verm.,  147;  22  Wend.,  215 j  6  Iredell,  107. 
4  Catlin  v.  Gunter,  1  Kernan  R.,  368. 

*  Marvin  v.  M'Cullum,  20  John.  R.,  288. 

*  Powell  v.  Waters,  8  Cowen  R.,  669,  755. 


DELIVERY    OF.  187 

taker  and  original  holder  of  it  when  it  becomes  an  operative 
note,  that  determines  its  character,  i 

After  a  note  has  been  once  put  in  circulation,  valid  in  its 
origin,  it  may  be  sold  and  transfered  on  any  terms  the  holder 
may  choose  to  accept;  but  if  when  discounted  it  has  no  legal 
existence,  but  depends  upon  a  valid  discount  for  its  life,  the 
discount  of  it  at  usurious  interest  renders  the  note  a  nullity.  2 
The  statute  declares  it  void.  3  But  where  the  payee  of  such 
a  note  indorses  it  to  a  third  person  for  a  valuable  considera- 
tion, and  he  takes  it  without  any  knowledge  of  its  usurious 
character,  the  latter  may  recover  on  it  the  amount  paid  by 
him  against  the  indorser;  for  his  is  a  new  contract  not  tainted 
with  usury.  4 

No  matter  when  or  where  they  are  signed,  promissory  notes 
are  made  at  the  time  and  place  and  by  the  act  of  delivery, 
accompanied  by  acceptance  on  the  part  of  the  payee.  5  For 
some  purposes,  when  delivered  subsequent  to  the  date,  they 
relate  back  and  take  effect  from  the  time  when  they  were 
signed  or  indorsed;  6  for  others,  they  are  valid  only  from  the 
day  of  delivery,  and  are  to  be  considered  as  drawn  on  that 
day.  7  They  are  to  be  construed  according  to  their  terms, 
and  they  are  generally  drawn  with  some  reference  to  the  date, 
as  a  means  of  fixing  the  time  of  payment :  but  so  long  as  they 
remain  under  the  control  of  the  maker,  or  of  the  indorser 

1  8  Cowen  R.,  690.  In  order  to  distinguish  between  the  purchase  of  nego- 
tiable paper,  at  an  under  value,  and  a  usurious  loan  upon  the  credit  of  it,  the 
test  question  is  whether  the  holder,  at  the  time  of  the  negotiation  of  the  note  or 
bill,  has  such  a  right  to  it  as  to  entitle  him,  if  it  were  then  due,  to  maintain  an 
action  upon  it  against  the  drawers  and  indorsers.  If  he  can,  he  may  sell  the 
note  like  any  other  piece  of  property ;  if  he  cannot,  he  has  no  right  to  procure 
it  to  be  discounted  at  an  usurious  rate.  Munn  v.  The  Commission  Co.,  15 
John.  R.,  55;  Catlin  v.  Gunter,  supra. 

•  Jones  T.  Hake,  2  John.  Cas.,  60;  Wilkie  v.  Roosevelt,  3  id.  66;  15  John. 
B.,  44,  65;  Dunham  v.  Dey.  13  John.  R.,  40,  17  id.  176. 

1 .  R.  S.,  3d  ed.  66. 

4  M'Knight  v.  Wheeler,  6  Hill  R.,  492;  Edwards  v.  Dick,  4  Bam.  and  Aid., 
212. 

•  Hyde  v.  Goodnow,  3  Comst.  R.,  266;  9  Barb.  R.,  647,  Ingalls  v.  Lee. 

•  8  Cowen  R.  669;  per  Chancellor  Jones. 

7  Lansing  v.  Gaine,  2  John.  R.,  300;  Camp  v.  Tompkins,  9  Conn.  R.,  546;  2 
John.  R.,  303,  per  Ch.  J.  Kent;  Abel  r.  Sutton,  3  Esp.  Cas.,  108. 


188  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

where  they  are  made  for  his  accommodation,  they  are  of  no 
force.  Though  made  before  the  dissolution  of  a  firm,  they 
cannot  be  issued  by  one  of  its  members  afterwards. 

Notwithstanding  the  delivery  of  a  promissory  note  is  essen- 
tial to  its  validity,  the  law  will  infer  a  delivery  in  the  absence 
of  any  proof  going  to  rebut  the  presumption  of  title  in  the  per- 
son having  it  in  his  possession,  i  Where  the  plaintiff  produces 
and  proves  the  signature  to  a  note  or  check  transferable  by 
delivery,  he  is  prima  facie  to  be  deemed  the  rightful  owner.  2 
This  rule  is  adopted  for  the  purpose  of  strengthening  and  fa- 
cilitating the  commercial  intercourse  which  is  carried  on 
through  this  species  of  paper;  and  the  reason  of  the  rule  is 
equally  applicable,  whether  the  bill  or  note  be  made  payable 
to  bearer  or  to  order,  the  signatures  to  the  instrument  being 
genuine.  3  The  rule  goes  even  farther  than  this;  for  it  is  held 
that  the  possession  of  an  indorsed  negotiable  bill  or  note  is 
presumptive  evidence  of  a  valid  transfer  before  maturity.  4 

The  holder  need  not  in  the  first  instance  shew  how  he  came 
by  the  note;  for  the  legal  presumption  is  that  he  received  it 
in  the  usual  course  of  business  and  for  value.  5  _A,n  exception 
illustrates  the  rule  :  if  the  note  be  payable  to  bearer  and  there 
are  circumstances  of  suspicion  attending  the  possession,  as 
where  it  appears  the  note  has  been  lost  or  stolen,  this  is  enough 
to  impose  upon  the  holder  the  necessity  of  proving  that  he  re- 
ceived it  in  good  faith  and  for  a  valuable  consideration,  (j 

One  who  transfers  a  negotiable  instrument  by  delivery,  or 
by  indorsement,  impliedly  guarantees  that  it  is  genuine,  and 
that  he  has  the  title  to  it.  7  The  rule  is  the  same  in  regard 
to  personal  property;  the  vendor  of  a  chattel  always  gives  an 
implied  warranty  of  the  title.  8  In  a  recent  case,  one  of  a 

1  Woodford  v.  Darwin,  3  Verm.,  82;  Chamberlain  v.  Hopps,  8  Venn.,  94. 

*  Cruger  v.  Armstrong,  3  John.  Cas.,  6. 

1  Conroy  v.  Warren,  id.  259;  Nelson  v.  Cowing,  6  Hill  R.,  336;  Pratt  v. 
Adams,  7  Paige  R.,  615. 

4  7  Paige  Ch.  R.,  615;  Andrews  v.  Chadbourne,  19  Barb.  R.,  147. 
6  Bank  of  Orleans  v.  Barry,  1  Denio  R.,  116. 

6  Grant  v.  Vaughan,  3  Burr.  1516. 

7  Herrick  v.  Whitney,  15  John.  R.,  240;  Murray  v.  Judah,  6  Cowen  R., 
484,  471 ;  Morrison  v.  Currie,  4  Duer,  79. 

*  Hermance  v.  Vernoy,  6  John.  R.,  6. 


DELIVEKY    OF. 


189 


firm  consisting  of  two  partners  drew  a  bill  in  the  firm  name 
upon  Mr.  Coggill  of  New- York,  payable  to  the  order  of  Tru- 
man Billings  ten  days  after  sight,  and  delivered  the  same  with 
the  forged  indorsement  of  the  payee  and  that  of  a  second  in- 
dorser  thereon,  to  the  Bank  of  Central  New- York,  at  Utica, 
by  whom  the  same  was  discounted,  indorsed  and  sent  forward 
for  collection  :  and  the  drawee,  having  accepted  and  paid  the 
bill,  afterwards,  on  discovering  the  forgery,  brought  an  action 
against  the  American  Exchange  Bank  to  whom  the  payment 
was  made,  to  recover  back  the  amount  paid;  and  it  was  ad- 
judged that  the  action  would  not  lie,  because  the  drawers,  by 
delivering  the  bill  with  the  name  of  the  payee  indorsed  upon 
it,  plainly  affirmed  that  the  indorsement  was  genuine,  so  that 
the  bill  might  be  negotiated  by  delivery;  and  because  such  a 
bill  when  transfered  by  the  maker,  indorsed  in  this  manner, 
is  in  effect  payable  to  bearer,  i  And  the  holder,  having  a 
good  title  to  the  bill  against  the  drawers  (and  the  payee  being 
a  nonentity),  may  recover  thereon.  2 

No  one  is  injured  by  this  doctrine;  because,  as  soon  as  the 
drawee  accepts  the  bill,  he  becomes  the  principal  debtor,  and 
it  is  all  the  same  to  him  whether  the  payee's  indorsement  be 
made  by  the  drawer  or  by  himself  personally,  so  long  as  he 
has  the  same  remedy  as  he  would  have  had  if  the  indorse- 
ment had  been  genuine.  By  way  of  discouraging  such  trans- 
actions, it  is  held  in  England  that  one  who  discounts  a  bill 
for  the  benefit  of  the  drawer,  with  knowledge  of  the  fact  that 
the  payee  is  a  fictitious  person,  or  that  the  indorsement  of  the 
payee's  name  on  the  bill  is  a  forgery,  cannot  recover  on  it 
against  the  acceptor :  but  the  bona  fide  holder  may  sue  and 
recover  on  it  against  the  maker  as  upon  a  note  payable  to 
bearer;  and  the  same  rule  has  been  applied  where  the  payee 

1  Coggill  v.  The  American  Exchange  Bank,  1  Comst  R.,  113. 

•  Meacher  v.  Fort,  8  Hill  So.  Car.,  227 ;  Riley's  Law  Cas.,  248.  Such  a  bill 
is  in  the  same  case  as  if  made  payable  to  a  fictitious  person,  and  indorsed  in 
the  name  of  the  fiction.  3  Term  R.f  182,  481;  1  U.  Black.  R.,  813,  569;  8 
Hill  R-,  112. 

1  Hunter  v.  Jeflery,  Peake  Add.  Cas.,  146. 


190  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

had  no  interest  in  the  note,  and  it  was  not  intended  that  he 
should  become  a  party  to  the  transaction.  1 

In  the  ordinary  course  of  business  the  payee  takes  the  title 
to  the  bill,  and  his  indorsement  is  necessary  in  order  to  trans- 
fer the  title  to  another  person;  and  therefore  title  to  the  in- 
strument cannot  be  deduced  through  a  forged  indorsement  of 
his  name  upon  the  bill,  unless  it  is  shewn  to  have  been  done 
by  the  maker  or  while  the  bill  was  in  his  possession.  2  The 
acceptor  guarantees  the  genuineness  of  the  drawer's  signature, 
he  being  his  immediate  correspondent;  but  the  acceptor  is  not 
concluded  from  denying  the  genuineness  of  the  payee's  in- 
dorsement, as  against  the  holder  who  acquired  the  bill  before 
it  was  accepted.  Having  done  no  act  to  give  currency  to  the 
bill,  he  may,  where  he  has  paid  it  by  mistake,  supposing  the 
payee's  indorsement  to  be  genuine,  recover  back  the  sum  paid 
on  discovering  that  the  payee's  indorsement  was  a  forgery.  3 
But  he  must  act  promptly,  and  must  not  be  guilty  of  any  de- 
lay in  giving  notice  of  the  forgery  as  soon  as  he  ascertains  the 
fact.  For,  if  he  has  given  currency  to  the  bill  having  upon 
it  a  forged  indorsement,  or  been  guilty  of  a  want  of  diligence 
in  giving  notice,  he  cannot  recover  back  the  money  paid.  4 

Where  the  first  indorsement  was  forged  upon  the  bill,  and 
it  was  afterwards  negotiated  through  several  hands,  and  then 
presented  to  the  drawee  and  paid  by  him;  it  was  held  that 
the  conduct  of  both  parties,  though  not  impeachable  for  want 
of  good  faith,  was  equally  negligent;  and  that  therefore  this 

1  Foster  v.  Shattuck,  2  N.  Hamp.  R.,  446;  contra,  Dana  v.  Underwood,  19 
Pick.,  99.  In  this  case  where  the  payee  was  not  a  fictitious  but  a  real  person, 
and  the  maker  put  the  note  in  circulation  with  his  name  indorsed  or  forged 
upon  it,  it  was  held  that  the  note  could  not  be  be  treated  as  payable  to  bearer, 
though  the  indorsement  was  shewn  to  be  a  forgery. 

9  Canal  Bank  v.  Bank  of  Albany,  1  Hill  R.,  287.  In  this  case  it  appeared 
that  the  payee  was  the  owner  of  the  bill.  See  remarks  of  Mr.  J.  Bronson,  1 
Comst.  R.,  116. 

8 1  Hill  R.,  287. 

4  Cox  v.  Masterman,  9  Barn,  and  Cres.,  902;  3  id.  428.  What  is  to  be 
deemed  diligence  in  such  a  case  depends  upon  the  relation  of  the  parties  to 
each  other.  United  States  Bank  v.  Bank  of  Georgia,  10  Wheat.,  333,  354. 


DELIVEKY   OF. 

was  a  payment  under  a  mistake  of  fact,  entitling  the  acceptor 
to  recover  back  the  amount  so  paid,  i 

The  payee  of  a  promissory  note  who  transfers  it  by  delivery, 
impliedly  warrants  that  it  is  not  a  forged  instrument  j  2  that 
the  signature  of  the  maker  is  genuine;  and  that  he,  the  payee 
and  holder,  has  the  title  and  the  right  to  transfer  the  note.  3 
The  subsequent  holder,  who  transfers  the  note  by  indorsement, 
in  like  manner  warrants  his  title,  the  genuineness  of  the  instru- 
ment and  of  the  antecedent  signatures  thereon.  4  But  this 
statement  requires  explanation:  the  indorser  by  the  act  of 
indorsement  to  another,  asserts  his  title  to  the  note,  and 
admits  the  signatures  of  the  maker  and  of  the  prior  indorsers 
to  be  genuine.  5  In  an  action  against  him  as  an  indorser,  it 
is  only  necessary  to  prove  his  signature  or  indorsement,  that 
the  note  was  not  paid  on  demand  at  maturity,  and  that  he  was 
duly  notified  of  the  non-payment.  6  In  stating  his  contract, 
as  implied  by  law,  Mr.  Story  maintains  that  it  includes  a  war- 
ranty that  the  antecedent  signatures  on  the  note  are  genuine;? 
but  Mr.  Bayley  holds  that  an  indorsement  is  no  warranty  that 
the  prior  indorsements  are  genuine.  8  There  is,  however,  no 
real  disagreement  between  them;  the  indorser  makes  a  new 
contract  with  his  indorsee,  and  undertakes  to  pay  the  note  in 
case  the  maker  does  not  and  he  is  properly  notified;  and  con- 
sequently the  indorsee  may  recover  thereon  against  him,  not- 
withstanding the  prior  indorsement  of  the  name  of  the  payee 

1  1  Hill,  287.  The  opinion  in  this  case  disapproves  of  Cox  v.  Master-man. 
That  case  decides  that  the  holder  of  the  bill  is  entitled  to  know  on  the  day  it 
becomes  due,  whether  it  is  an  honored  or  dishonored  bill.  3  B.  and  C.,  428; 
Adams  v.  Jones,  12  Adol.  and  Ellis,  455,  shews  that  the  note  or  bill  should  be 
alleged  to  have  been  delivered  to  the  plaintiff  as  indorsee;  an  allegation  of 
indorsement  and  delivery  is  not  enough. 

»  Herrick  v.  Whitney,  15  John.  R..  240;  4  Duer,  79. 

1  Barretto  v.  Snowden,  5  Wend.  R.,  181;  Shaver  v.  Ehle,  16  John.  R.,  201. 

4 16  John.  R.,  201;  Story  on  Promissory  Notes,  §  135;  Murray  y.  Judah,  6 
Cowen  R.,  484. 

*  2  Greenleafs  Ev.  §  164;  Holts'  Gas.,  550;  11  Rob.  Louis.  R.,  7. 

*  Wilbur  v.  Selden,  6  Cowen  R.,  162;  16  Pick.  R..  533. 
7  Story  on  Notes,  §  135. 

*  Bayley  on  Bills,  169,  (5th  ed.) 


192  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

is  a  forgery,  and  although  the  note  was  actually  delivered  to 
the  indorsee  by  the  maker,  i 


PAYMENT  BY  NOTE  OR  BILL. 

The  general  rule  is  that  the  giving  of  a  bill  of  exchange  or 
a  promissory  note  for  goods  sold  or  for  an  existing  contract 
debt  is  not  to  be  regarded  as  payment  of  the  indebtedness, 
unless  there  is  an  express  agreement  to  that  effect.  2  It  does 
not  extinguish  the  antecedent  debt,  which  formed  its  conside- 
ration; nor  does  it  prevent  the  creditor  from  waiving  the 
note  and  bringing  his  action  directly  on  the  original  demand.  3 

The  authorities  on  this  subject  are  not  uniform.  4  But  it  is 
well  settled  here,  that  taking  a  note  from  one  of  several  joint 
debtors,  or  from  a  third  person,  for  a  pre-existing  debt,  is  no 
payment,  unless  it  be  expressly  agreed  to  be  taken  as  pay- 
ment, and  at  the  risk  of  the  creditor;  and  that  the  taking  of 
the  debtor's  note,  and  giving  a  receipt  for  so  much  cash,  in 
full  of  the  original  debt,  does  not  amount  to  evidence  of  such 
express  agreement  to  take  the  note  in  payment.  The  agree- 
ment must  be  clearly  and  explicitly  proved  by  the  original 
debtor,  or  he  will  still  be  held  liable.  5 

1  State  Bank  v.  Fearing,  16  Pick.  R.,  633.  In  this  case  the  payee's  name 
was  forged  upon  the  note,  and  the  defendant  was  the  second  indorser,  and  was 
held  liable  thereon. 

1  Hughes  v.  Wheeler,  8  Cowen  R.,  77;  8  John.  R.,  202;  15  id.  247. 

*  Tobey  v.  Barber,  5  John.  R.,  68;  Muldon  v.  Whitlock,  1  Cowen  R.,  290, 
and  cases  there  cited. 

4  Cole  v.  Sacket,  1  Hill  R.,  616;  Arnold  v.  Camp,  12  John.  R.,  409. 

*2Ld.  Raym.,  928;  1  Salk.,  124;  Owenson  v.  Morse,  7  Term  R.,  64;  5 
John.  R.,  68;  Johnson  v.  Weed,  9  John.  R.,  310;  Sheehy  v.  Mandeville,  6 
Cranch,  258;  Schermerhorn  v.Loines.  7  John.  R.,  811;  1  Cowen  R.,  290;  Noel 
v.  Murray,  1  Duer  R.,  385;  S.  C.,  3  Kernan  R.,  167,  was  an  action  for  goods 
sold  and  delivered.  The  goods  were  ordered  on  the  8th  of  October,  1850,  and 
delivered  on  and  after  the  12th.  On  the  twelfth  plaintiff  gave  the  defendant 
this  receipt  :  "  Received  from  John  B.  Murray,  Messrs.  J.  Howard  &  Son's 
note,  at  6  mos.  from  17th  Sept.,  for  $988.67  and  $38.23,  in  full  for  the  above 
bill,  $1027."  The  deft,  was  charged  on  the  plfFs  books  with  the  goods  and 
credited  with  the  note  and  cash  paid.  On  the  trial  plff.  produced  and  offered 
to  surrender  the  note,  which  had  not  been  paid.  And  the  court  charged  the 
jury  that  if  they  found  from  the  evidence  that  it  was  a  part  of  the  agreement 
between  the  parties,  at  the  time  of  the  sale  and  delivery  of  the  goods,  that  the 


PAYMENT    BY    NOTE   OR    BILL.  193 

Receiving  the  note  of  a  third  person  in  payment  discharges 
the  original  debt :  but  when  the  party  gives  his  own  not*-,  it 
is  no  discharge,  though  it  be  receipted  as  payment,  i  Indeed, 
nothing  is  considered  as  an  actual  payment  which  is  not  in 
truth  such,  unless  there  be  an  express  agreement  based  on  a 
good  consideration  that  something  short  of  a  payment  shall  be 
taken  in  lieu  of  it :  2  thus,  where  the  holder  of  a  note  accepted 
the  check  of  a  third  person  for  a  part  of  the  amount  and  a 
new  note  for  the  balance  and  delivered  up  the  old  note,  and 
the  check  was  dishonored;  it  was  held  that  an  action  might 
still  lxi  nmintaiiifdon  the  original  note,  and  that  the  surrender 
of  it  was  not  evidence  that  the  check  and  new  note  were 
received  in  payment.  So,  where  one  of  two  partners,  after  the 
partnership  had  been  dissolved,  gave  his  own  note  for  a  note 
of  the  firm,  and  the  individual  note  was  not  paid  when  it  be- 
came due;  it  was  adjudged  that  an  action  might  be  maintained 
on  the  firm  note.  3 

1  Southwick  v.  Sax.  9  Wend.,  122;  1  Cowen  R.,  290;  9  John.  R.,  310. 

*  Olcott  v.  Rathbone.  5  "Wend.,  490.    The  general  principle  is  that  a  bill  or 
note  is  no  satisfaction  of  any  debt  or  demand  for  which  it  has  been  given;  it  is 
only  prima  facie  evidence  of  payment,  rendering  it  necessary  that  the  party 
receiving  it  should  account  for  it,  before  he  will  be  entitled  to  recover  the  con- 
sideration.   Per  Marcy,  Justice. 

*  Kean  v.  Dufresne,  3  Serg.  and  Rawle,  233 ;  6  Term  R.,  12. 

note  should  be  received  in  payment,  they  should  find  a  verdict  in  favor  of  the 
deft.  The  jury  having  found  a  verdict  for  the  defendant,  the  charge  was  held 
correct  by  the  Superior  Court,  and  by  the  Court  of  Appeals.  The  sale  was 
completed  on  the  twelfth.  Marvin.  J.  :  "  The  bargain  to  purchase  was  pro- 
bably made  on  the  8th,  or  say  the  10th,  when  the  plates  were  measured  and 
the  bill  bears  date;  but  there  is  no  evidence  whatever  of  any  agreement  or 
understanding  that  the  plff.  should  deliver  the  plates  until  they  had  received 
the  pay  for  them.  The  fair  construction  of  the  evidence,  including  what  is  said 
in  the  pleadings,  is  that  the  plff.  was  not  to  part  with  the  title  to  the  property 
until  the  matter  of  payment  had  been  arranged.  The  sale  was  not  completed 
so  as  to  pass  t lie  title  until  the  matter  of  payment  was  arranged;  and  that 
was  at  the  time  the  note  was  delivered  and  the  money  paid.  The  sale  and 
delivery  and  payment  were  to  be  simultaneous  acts.  Thus  understood,  there 
was  no  precedent  debt ;  and  the  case  comes  under  the  rule,  that  when  at  the 
time  of  the  sale  and  delivery  of  the  goods,  the  vendor  receives  from  the  vendee 
the  note  of  a  third  person  for  the  price,  the  presumption  is  that  he  takes  it  in 
payment.''  Whit  beck  v.  Van  Ness,  11  John.  R.,  409;  3  Cowen,  280;  15  John. 
R.,  241. 


194  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

The  new  promise  is  no  consideration  for  the  discharge  of  a 
precedent  debt;  and  a  promise  by  note  is  a  security  of  no 
higher  degree  than  an  implied  promise.  And  therefore  it  has 
been  held  in  this  state,  that  the  giving  of  a  note  by  one  of  two 
partners  for  a  debt  due  from  the  firm  does  not  operate  as  pay- 
ment, though  accepted  in  full  satisfaction  and  discharge,  i 
But  this  decision  has  been  questioned,  and  the  current  of 
authority  runs  in  a  contrary  direction.  2 

When  one  of  a  firm,  after  its  dissolution,  gives  his  indi- 
vidual notes  for  a  portion  of  a  firm  debt  that  has  been  secured 
by  a  note,  and  a  third  person's  note  and  some  money  for  the 
balance,  and  takes  up  the  note  of  the  firm,  it  is  a  question  of 
fact  to  be  decided  by  the  jury,  whether  such  new  securities 
were  received  in  payment  of  the  partnership  note;  and  if  so 
received,  they  unquestionably  operate  as  an  extinguishment 
of  the  original  debt.  3  And  it  is  strongly  asserted,  against 
some  cases  to  the  contrary,  that,  where  the  creditor  of  a  firm 
accepts  the  notes  of  one  of  the  partners  expressly  in  satisfac- 
tion of  the  firm  debt,  this  is  a  payment  of  the  debt  and  a 
release  of  the  other  partners.  4 

In  the  cases  that  hold  such  an  argument  inoperative,  the 
stress  of  the  argument  is  placed  upon  the  want  of  a  conside- 
ration to  support  the  release.  5  The  answer  to  this  is,  that 
the  creditor  by  accepting  the  individual  note  of  one  of  the 
firm,  acquires  a  several  security,  in  place  of  one  that  is  joint 
and  subject  to  the  law  which  appropriates  the  partnership 
property  primarily  to  the  payment  of  partnership  debts,  so 

1  Cole  v.  Sacket,  1  Hill  R.,  516.  This  case  overrules  that  of  Arnold  v. 
Camp,  in  which  it  is  held  that  the  doctrine  of  nudum  pactum  has  no  applica- 
tion to  cases  like  these.  12  John.  R.,  409;  see  also  Witherly  v.  Mann,  11 
John.  R.,518. 

"  Waydell  v.  Luer,  3  Denio  R.,  410,  and  cases  there  cited. 

8  Boyd  v.  Hitchcock,  2  John.  R.,  76;  Le  Page  v.  McCrea,  1  Wend.,  164; 
Frisbie  v.  Learned,  21  Wend.,  452;  3  Denio  R.,  410. 

4  Per  Senator  Lott,  in  Waydell  v.  Luer,  3  Denio,  410;  4  Esp.  N.  P.,  89;  6 
id.  122;  12  John.  R.,  409;  11  John.  R.,  518;  6  Cranch,  253,  264;  Thompson 
v.  Percival,  5  Barn,  and  Adol.,  925;  Hart  v.  Alexander,  2  Mees.  and  Welsh., 
484. 

•Cole  v.  Sackett,  1  Hill  R.,  516;  Waydell  v.  Luer,  6  Hill  448;  David  v. 
Ellice,  6  Barn,  and  Cress,  196. 


PAYMENT    BY    NOTE   OR    BILL.  195 

that  it  may  frequently  happen  that  the  note  of  one  of  the 
partners  is  the  more  available  security,  i  This  is  clearly  the 
reasoning  of  the  English  courts,  and  it  has  been  strongly  urged 
here. 2  More  than  this;  it  is  urged  that  it  would  result  in  a 
prejudice  or  injury  to  the  rights  of  the  parties  to  permit  the 
creditor  who  has  agreed  to  accept  the  note  of  one  in  place  of 
all  the  partners,  to  rescind  and  annul  the  contract;  and  it  has 
been  accordingly  adjudged  that  where  an  arrangement  is 
made  between  the  several  makers  of  a  promissory  note,  that 
one  of  them  is  to  assume  and  pay  it,  and  means  are  placed  in 
his  hands  for  that  purpose,  and  he  pays  a  part  of  it  and  gives 
his  own  note  for  the  balance,  which  the  holder  accepts  in  pay- 
ment and  gives  up  the  original  note;  this  is  a  discharge  of 
the  other  parties.  3  When  the  circumstances  of  the  transac- 
tion shew  that  the  party  discharged  has,  by  reason  of  the 
arrangement,  put  himself  into  a  position  where  he  may  or 
must  be  prejudiced  if  held  liable  for  the  debt;  this  constitutes 
a  legal  consideration  for  the  creditor's  discharge  of  him.  "  A 
valuable  consideration  is  one  that  is  either  a  benefit  to  the 
party  promising,  or  some  trouble  or  prejudice  to  the  party  to 
whom  the  promise  is  made."  4 

When  a  vendor,  on  a  sale  and  delivery  of  goods,  receives 
from  the  vendee  the  note  of  a  third  person  for  the  price,  the 
presumption  is,  that  he  takes  it  in  payment;  especially  is  this 
so  where  he  gives  a  receipt  for  the  note  in  full  for  his  bill.  5 
The  presumption  is  different  where  a  creditor  receives  the  note 
of  a  third  person  for  a  precent  debt.  6  For  where  there  is  an 
existing  debt,  it  is  incumbent  upon  the  debtor  to  shew  that  it 

1  3  Denio  R.,  410,  per  Senator  Lott. 

*  Thompson  v.  Pcrcival,  5  Barn,  and  Adol.,  925;  4  Denio  R.,  410. 

'  Livingston  v.  Kadcliff,  6  Barb.  R..  201.  This  case  does  not  follow  that  of 
Cole  v.  Sackett,  nor  that  of  Waydcll  v.  Luer ;  But  these  cases  are  not  regarded 
as  overruled  by  the  decision  of  the  last  in  the  court  of  Errors.  Per  Paige,  5 
Barb.  R.}  398,  408. 

4  2  Kent's  Com.,  464;  6  Barb.  R.,  201. 

*  Noel  v.  Murray,  3  Kernan  R.,  168. 

*  Rew  v.  Barber,  3  Cowen  R..  272,  and  3  Kernan,  168.    An  agent  of  the 
purchaser  is  not  regarded  as  a  third  person,  so  as  to  make  his  notes  for  his 
principal's  debt  presumptive  payment.    Porter  v.  Talcott,  1  Cowen  R.,359. 


196  BILLS   OF  EXCHANGE   AND    PROMISSORY  NOTES. 

has  been  paid,  or  legally  discharged;  and  where  there  has 
been  no  payment  in  fact,  it  is  necessary  for  him  to  shew  an 
agreement  to  discharge  it,  based  on  a  good  consideration,  i 

The  acceptance  of  a  note  of  a  third  person  on  a  sale  and 
delivery  of  a  chattel,  is,  as  we  have  just  said,  to  be  deemed 
a  payment.  2  This  is  on  the  presumed  intention  of  the  par- 
ties, but  like  other  presumptions  it  yields  to  contrary  and 
positive  evidence;  thus,  where  an  agent  purchases  or  takes  in 
exchange  property  for  his  principal,  and  gives  his  own  notes 
for  the  balance  thereon,  such  notes,  so  far  as  the  question 
whether  they  operate  as  payment  is  concerned,  are  to  be  con- 
sidered as  those  of  the  principal.  3  And  any  act,  such  as 
indorsing  or  guaranteeing  the  note,  which  shews  that  the  pur- 
chase was  not  made  on  the  faith  of  the  note  delivered,  will 
rebut  the  presumption  of  payment.  4 

When  a  negotiable  note  or  bill  of  exchange  is  delivered  to 
a  creditor,  it  operates  as  an  extinguishment  of  his  debt  sub 
modo,  and  he  is  not  suffered  to  recover  on  the  original  con- 
sideration, unless  he  shews  the  note  or  bill  to  have  been  lost, 
or  produces  and  cancels  it  at  the  trial.  5  Being  negotiable 
paper,  it  is  deemed  prima  facie  evidence  of  satisfaction.  6 
Though  it  does  not  extinguish  the  debt,  it  is  such  an  instru- 
ment as  may  be  passed  into  the  hands  of  a  third  person  and 
remain  valid  against  the  maker  or  indorser;  and  hence  the 
creditor  is  not  permitted  to  recover  on  the  original  debt  unless 
he  produces  or  accounts  for  the  note.  7  The  reason  of  the 
rule  is,  that  the  creditor,  having  received  a  transferable  secu- 
rity for  his  debt,  is  bound  to  cancel  it,  or  to  shew  that  the 
debtor  cannot  be  again  called  on  for  payment  of  the  same 
demand,  before  he  has  a  right  to  recover  the  debt  due;  other- 

1  Waydell  v.  Luer,  3  Demo,  410;  Breed  v.  Cook,  15  John.  R.,  241;  Whit- 
beck  v.  Van  Ness,  11  John.  R.,  409;  Arnold  v.  Camp,  12  id.  409. 

8  3  Cowen  R.,  272. 

1  Porter  v.  Talcott,  1  Cowen,  359. 
4  Monroe  v.  Hoff,  5  Denio  R.,  360. 

6  Holmes  &Drake  v.  D'Camp.  1  John.  R.,  34. 

9  Pintard  v.  Tackington,  10  John.  R.,  104. 

7  Burdick  v.  Green,  15  John.  R.,  247. 


PAYMENT    BY    NOTE   OR    BILL.  197 

wise  the  creditor  might  be  compelled  to  pay  the  same  demand 
twice,  i 

As  to  notes  and  drafts  not  negotiable,  there  is  not  the  same 
reason  for  requiring  the  production  and  canceling  of  them 
on  the  trial;  for  these  are  not  transferable  with  the  same  inci- 
dents as  negotiable  paper.  2  And  hence  the  rule  we  have 
just  now  stated  applies  to  bills  and  notes  that  are  in  terms 
negotiable.  And  yet  where  notes  that  are  not  negotiable,  are 
by  statute  capable  of  assignment,  there  is  a  good  reason  why 
they  should  be  canceled  before  a  recovery  is  had  on  the  prior 
debt.  3 

The  acceptance  of  a  bill  of  exchange  or  promissory  note  on 
a  sale  of  chattels  or  on  a  pre-existing  debt,  though  not  received 
as  an  absolute  payment,  suspends  the  right  of  action  on  the 
original  debt  until  the  note  or  bill  becomes  due  or  is  dis- 
honored. 4  It  is  a  matter  of  agreement;  and  when  the  cred- 
itor is  content  to  take  a  bill  or  note  payable  at  a  future  day 
in  payment  of  a  debt,  he  cannot  legally  commence  an  action 
on  his  original  debt  until  such  bill  or  note  becomes  payable, 
or  default  is  made  in  the  payment;  but  if  such  note  or  bill  is 
of  no  value,  as  when  drawn  on  a  person  who  has  no  effects  of 
the  drawer  in  his  hands,  and  who  therefore  refuses  it,  it  may 
be  treated  as  waste  paper,  and  an  action  may  be  immediately 
brought  on  the  original  demand.  5 

But  where  the  purchaser  gives  to  the  vendor  a  bill  of 
exchange  in  payment  of  goods  purchased,  drawn  payable  to 

1  Hughes  v.  Wheeler,  8  Cowen  R.,  77;  8  John.  B.,  149;  3  Cowen,  147;  see 
also,  Wilder  v.  Seeleye.  8  Barb.  R.,  408. 

*  Hoar  v.  Clute,  15  John.  R.,  224. 

'  See  new  Code.  True,  a  note  .that  is  not  negotiable  would  not  pass  by 
assignment  into  the  hands  of  the  assignee  discharged  of  all  the  equities,  as  in 
the  case  of  a  negotiable  note  transferred  before  it  becomes  due;  still,  it  is 
prima  facie  a  valid  demand,  and  might  subject  the  maker  of  it  to  the  hazard 
of  double  payment,  unless  he  should  be  able  to  prove  the  circumstances  of 
the  transaction.  See  23  Wend  ,  845. 

4  Putnam  v  Lewis,  8  John.  R.,  889.  The  defendant  should  prove  the  giving 
of  the  note,  and  that  it  is  not  due,  if  he  relies  upon  the  giving  of  the  note  to 
shew  an  extension  of  the  time  of  payment.  Herring  v.  Sawyer,  cited  in  same 
ue. 

1  Stcdman  v.  Gooch,  1  Esp.  R.,  8;  Kearsloke  v.  Morgan,  5  Term  R.,  613. 


198  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

his  own  order  at  a  future  day,  and  indorses  and  delivers  it,  it 
is  the  vendor's  duty  to  have  the  bill  presented  for  acceptance 
and  payment;  and  he  cannot  recover  on  the  original  demand 
unless  he  takes  the  proper  steps  to  charge  the  parties  to  the 
bill,  i  So,  when  a  merchant  buys  a  bill  of  goods,  and  pays 
in  a  note  of  a  third  person,  which  he  indorses,  if  the  vendor 
of  the  goods  neglects  to  demand  the  note,  and  give  notice  to 
the  indorser  so  as  to  charge  him,  he  has  made  the  note  his 
own,  and  must  rely  upon  the  solvency  of  the  maker.  The 
acceptance  of  such  a  security  creates  a  new  contract  and 
merges  in  it,  at  least  conditionally,  the  original  debt.  2 

The  plaintiff  brought  an  action  on  a  judgment,  introduced 
the  record  thereof,  and  rested;  the  defendant  then  gave  in 
evidence  a  receipt  entitled  in  the  action,  signed  by  the  plain- 
tiff, acknowledging  that  he  had  received  of  the  defendant  fifty 
dollars  in  cash,  and  his  drafts  on  Clark  Rice,  Junior,  for  one 
hundred  and  seventy-five  dollars,  payable  in  instalments  with 
interest  from  date,  "  which  when  paid  shall  be  in  full  satis- 
faction of  the  judgment  in  this  cause:"  By  the  court,  Bron- 
son,  J. :  "  It  is,  I  think,  settled  upon  authority,  that  the 
plaintiff  was  bound  to  present  the  bills  for  payment  and  give 
notice  if  they  were  not  paid,  and  that  the  burden  lies  on  him 
of  proving  that  due  diligence  has  been  used.  The  rule  is 
right  in  principle.  The  defendant  had  a  right  to  presume 
that  the  bills  would  be  presented,  and  if  he  received  no  notice 
of  their  dishonor,  he  would  naturally  conclude  that  his  funds 
in  the  hands  of  the  drawee  had  been  applied  in  satisfaction 
of  his  debt  to  the  plaintiff.  And  clearly,  it  should  lie  on  the 
plaintiff,  who  held  the  bills  and  whose  duty  it  was  to  act  upon 
them,  to  shew  what  had  been  done."  3  It  did  not  appear  in 
the  case  that  the  drafts  were  negotiable,  or  that  they  were 
produced  on  the  trial  to  be  surrendered  or  canceled.  The 

1  Jones  v.  Savage,  6  Wend.  R..  658;  7  Mass.  R.,  286;  4  Verm.,  549. 

4  Booth  v.  Smith,  3  Wend.  R.,  66.  When  accepted  in  full  payment,  such  a 
new  security,  though  given  for  a  less  amount  than  the  sum  due.  is  a  good  con- 
sideration for  the  discharge  of  the  original  debt.  Boyd  v.  Hitchcock,  20  John. 
R.,  76,  and  cases  there  cited;  but  see  Thomas  v.  Heathorn,  2  B.  and  C.,  577. 

•  Dayton  v.  Trull,  23  Wend.  R.,  345. 


PAYMENT    BY    NOTE   OR    BILL.  199 

negotiability  of  the  instrument  would  make  it  necessary, 
either  to  produce  it,  or  account  for  it,  by  shewing  that  it  was 
not  outstanding,  but  it  would  not  release  the  plaintiff  from 
his  duty  to  use  diligence  in  trying  to  get  the  money,  and  in 
giving  the  defendant  notice  of  his  failure  to  do  so.  i  Although 
such  a  receipt  specifies  that  the  bills  are  received  in  full  when 
paid,  the  court  will  presume  that  the  money  has  been  received, 
until  the  contrary  is  shewn.  2 

In  order  to  make  the  acceptance  of  a  note  in  payment  on  a 
prior  debt  operate  as  a  suspension  of  the  creditor's  right  of 
action,  it  is  necessary  that  the  debtor  should  perform  all  that 
he  engaged  to  do.  And  therefore  where  an  action  had  been 
commenced  on  a  book  account,  and  an  agreement  was  made 
between  the  parties  for  a  settlement,  on  condition  that  the 
defendant  gave  the  plaintiff  his  note  for  the  amount,  and  paid 
the  costs  of  the  suit,  and  the  defendant  accordingly  gave  the 
note,  but  neglected  to  pay  the  costs;  it  was  held  that  the 
plaintiff  had  a  right  to  proceed  in  the  action.  3  In  a  like 
case,  decided  in  England,  where  the  action  was  brought 
against  the  acceptor  of  a  bill,  and  an  agreement  was  made  for 
settlement  of  the  suit  on  condition  that  the  defendant  gave  a 
new  bill  and  a  warrant  of  attorney,  and  paid  the  costs,  and 
the  defendant  did  not  pay  the  costs  as  agreed,  it  was  adjudged 
that  tin-  plaintiff  might  bring  a  fresh  action  on  the  first  bill, 
even  while  the  second  was  outstanding  and  in  the  hands  of 
an  indorsee.  4  But  that  decision  was  clearly  wrong;  for  by 
accepting  and  negotiating  the  new  bill,  the  plaintiff  in  effect 
gave  the  defendant  credit  for  the  amount  of  the  costs.  And 
so  it  was  held  in  a  subsequent  action :  a  renewed  bill  had 
been  taken  and  paid,  and  as  the  former  bill  remained  still  in 

1  Chamberlyn  v.  Dclarieve,  2  Wils.,  853;  Ward  v.  Evans.  2  Lord  Raym.,  928. 

*  Hebden  v.  Hartsink,  4  Esp.  R.,  46;  Smith  v.  Wilson,  Andrews,  187,  228; 
Kearslake  v.  Morgan,  5  Term  R.,  553. 

1  Putnam  v.  Lewis,  8  John.  R.,  889.  In  this  case  it  was  not  shewn  that  the 
note  had  not  already  fallen  due  when  the  action  was  proceeded  with ;  and  the 
court  assumed  that  it  rested  with  the  defendant  to  shew  that  there  had  been 
an  extension  of  the  time  of  payment,  and  the  decision  evidently  turned  upon 
his  failure  to  prove  that  fact. 

4  N  orris  v.  Aylette,  2  Campb.,  829. 


200  BILLS  OF    EXCHANGE  AND    PROMISSORY  NOTES. 

the  hands  of  the  holder,  he  brought  an  action  upon  it,  but  was 
not  allowed  to  recover,  notwithstanding  the  costs  incurred  in 
taking  a  warrant  of  attorney  remained  unpaid  contrary  to 
agreement.  1 

The  parties  may  unquestionably  make  the  agreement  for 
renewal  to  depend  upon  such  conditions  as  they  see  fit;  but 
the  law  cannot  imply  a  condition  that  would  operate  to  give 
to  the  creditor  the  benefit  of  two  notes  for  the  same  conside- 
ration, unless  one  of  them  is  given  as  collateral  to  the  other. 
And  in  that  case  payment  of  one  of  them  is  payment  of  both ; 
for  they  are  both  given  to  secure  the  payment  of  the  same 
debt.  2  But  this  proposition  is  of  course  subject  to  the  rule 
that  a  bona  fide  holder,  who  acquires  the  note  for  value  before 
it  becomes  due  and  in  the  usual  course  of  business,  may  re- 
cover on  it.  3 

Generally  speaking,  when  a  note  is  renewed  the  intention 
of  the  parties  is  shewn  by  the  manner  in  which  the  business 
is  transacted;  if  the  agreement  is  to  extinguish  the  prior  note, 
it  is  usually  delivered  up  in  exchange  for  the  new  note.  But 
the  surrender  of  the  first  note  is  not  conclusive  evidence  of 
an  intention  to  cancel  it.  4  As  to  the  indorser,  the  taking  of 
a  new  note  discharges  his  liability  on  the  first;  and  it  was  so 
held  where  the  defendant  was  the  indorser  of  both  notes,  but 
had  no  notice  of  the  dishonor  of  the  second.  Per  Curiam: 
"  The  defendant  delivered  a  bill  to  the  plaintiff  as  security, 
upon  which  he  (the  defendant)  had  a  right  to  sue  other  per- 
sons. The  plaintiff,  by  not  giving  him  notice  of  its  non-pay- 
ment, has  put  it  out  of  his  power  to  recover  what  was  due 
thereupon;  and  having  done  so,  he  shall  not  be  permitted  to 
resort  to  the  first  bill."  5 

1  Dillon  v.  Rimmer,  1  Bing.  R.,  100. 

a  Edwards  on  Bailments,  265,  212,  213;  Hunt  v.  Nevers,  15  Pick.  R.,  500. 

*4  Mass.  R.,370;  5  Pick.  R.,  312;  10  Wend.  R.,  85;  12  Pick.  R.,  645; 
Stalke  v.  McDonald,  6  Hill  R.,  93;  2  Sand.  R.,  161. 

4  5  Wend.  R.,  490. 

*  Bridges  v.  Berry,  3  Taunt.,  130.  The  taking  of  a  new  note  is  clearly  aii 
agreement  to  extend  the  time  of  payment,  and  where  the  same  indorsers  are 
not  on  the  renewal  note  they  are  discharged.  9  Cowen,  194;  2  Barn,  and  Aid., 
496. 


PAYMENT    BY    NOTE   OR    BILL.  201 

On  the  question  whether  a  bill  or  note  is  to  be  regarded  as 
payment,  it  is  not  material  whether  it  be  given  for  a  prece- 
dent or  cotemporary  debt;  for  in  either  case,  unless  it  be  re- 
ceived under  an  agreement  that  it  shall  operate  as  payment, 
the  law  will  not  so  adjudge  it.  i  If  it  be  the  note  of,  or  a  bill 
drawn  upon  a  third  person,  it  may  be  paid  on  a  prior  debt  or 
on  one  presently  contracted,  just  like  any  other  vendible 
property,  and  the  creditor  may  agree  to  receive  it,  as  he  would 
a  chattel,  in  satisfaction  and  payment  of  the  demand.  2  And 
where  such  a  note  or  bill  is  delivered  without  any  positive 
agreement  that  it  is  to  be  received  in  full  payment,  the  law 
implies  an  undertaking  on  the  part  of  the  creditor  so  receiv- 
ing it,  that  he  will  use  diligence  in  presenting  the  same  for 
payment  and  in  giving  notice  of  protest.  3  By  neglecting  to 
do  this,  he  is  guilty  of  laches  that  may  result  in  loss  to  his 
debtor,  towards  whom  in  respect  to  the  note  he  stands  in  the 
relation  of  an  assignee,  bound  to  make  a  speedy  and  prompt 
collection.  4  If  therefore  he  extend  the  time  of  payment,  or 
take  a  new  note  for  a  part  of  the  demand,  he  makes  the  note 
his  own,  the  same  as  if  it  had  been  received  in  absolute  pay- 
ment. 5 

Where  the  debtor  gives  to  his  creditor  a  note  that  is  not 
negotiable,  it  is  not  considered  a  payment  of  a  pre-existing 
debt.  6  Neither  is  a  check  of  a  third  person,  though  used  to 
take  up  a  note  falling  due  at  a  bank,  to  be  deemed  a  pay- 
ment, unless  the  check  is  honored.  7 

In  Massachusetts  and  in  some  of  the  other  states,  when  the 
creditor  takes  from  his  debtor  his  negotiable  promissory  note, 

1 1  Cowen  R..  859;  9  Conn.  R.,  28.  The  presumption  Is  that  a  note  of  a 
third  person,  received  on  a  sale,  is  taken  in  payment.  Noel  v.  Murray,  8  Ker- 
nan  R.,  167. 

*  The  New-York  State  Bank  v.  Fletcher,  5  Wend.,  85;  7  Wend.,  801. 
»  Southwick  v.  Sax,  9  Wend.,  122. 

4  9  Wend.  R.,  122,  and  cases  there  cited. 

*  Nexsen  v.  Lyell,  6  Hill  R.,  466. 

*  4  Mass.  R.,  98;  6  id.  143;  8  Fairf.,  881,  418;  6  Whart.,  220. 

T  5  Wend.  R.,  490.  It  is  to  be  presumed  that  a  check,  drawn  payable  on  de- 
mand, will  be  paid  when  presented ;  and  that  it  was  given  on  that  understand- 
ing. Pratt  v.  Foote,  18  Barb.  R.,  209;  S.  C.,  6  Seld.,  468. 

11 


202  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES 

and  negotiates  it,  the  debt  is  paid;  and  the  creditor,  though 
he  afterwards  repossesses  himself  of  the  note,  cannot  bring 
his  action  on  the  original  demand  and  recover  thereon,  as  he 
may  in  this  state  and  at  common  law,  on  surrendering  the 
note,  i  The  theory  which  is  assumed  in  that  state  is,  that 
when  a  negotiable  note  is  given  to  secure  the  payment  of 
money  due  by  simple  contract,  the  simple  contract  is  deemed 
to  be  satisfied  or  merged  in  the  note :  in  the  language  of 
Sedgwick  J.,  "  a  promissory  note,  given  and  received  for  goods 
at  the  time  of  the  sale  of  them,  is  payment  as  much  and  as 
effectual,  to  all  intents  and  purposes,  as  cash.  A  previously 
existing  parol  contract,  as  the  law  is  here  understood,  would 
have  been  merged  by  it  as  completely  as  it  would  have  been 
by  a  bond,  recognizance,  or  deed  of  any  kind."  2  The  doc- 
trine as  laid  down  by  Chief  Justice  Parsons  is,  that  a  nego- 
tiable note  given  in  consideration  of  a  simple  contract  debt 
due,  is  a  discharge  of  the  simple  contract;  on  the  ground  that 
the  law  will  presume  a  negotiable  note  is  agreed  by  the  par- 
ties to  be  payment  of  the  simple  contract.  3  This  assumes 
that  the  presumption  may  be  overcome  and  rebutted  by  evi- 
dence to  the  contrary. 

The  same  rule  prevails  in  Maine;  where,  when  the  creditor 
receives  from  his  debtor  a  negotiable  note,  it  is  presumed  to 
be  taken  in  payment  of  the  prior  debt;  while  the  presump- 
tion is  liable  to  be  rebutted  and  controlled  by  a  positive  agree- 
ment to  the  contrary,  or  by  circumstances  or  usages  that  are 
not  consistent  with  it.  4 

In  general,  the  American  courts  have  followed  the  doctrine 
of  the  common  law;  holding  that  the  negotiable  note  of  a 

'Chapman  v.  Durant,  10  Mass.  R.,  47;  5  John.  R.,  68;  10  id.  104. 

'Goodenow  v.  Tyler,  7  Mass.  R.,  43;  6  Mass.  R.,  143;  11  id.  362;  14  id. 
121;  16  id.  38;  Hutchins  v.  Olcutt,  4  Verm.,  549. 

1  Thatcher  v.  Dinsmore,  5  Mass.  R.,  299.  The  reason  given  for  the  rule  is 
the  same  as  that  given  in  this  state  for  holding  such  a  note  prima  facie  evidence 
of  payment,  namely,  that  such  a  note  when  transferred  binds  the  parties  to  pay 
it ;  and  it  would  subject  the  party  to  a  double  responsibility  to  allow  a  recovery 
i  n  such  a  case  on  the  original  debt.  But  the  common  law,  and  the  rule  as 
held  in  this  and  most  of  the  other  states,  avoids  this  by  requiring  the  note  to 
be  produced  and  surrendered  on  the  trial. 
Varnerr  tfobleborough,  2  Greenl.,  121. 


PAYMENT    BY    NOTE   OR    BILL.  203 

debtor,  when  delivered  to  his  creditor  on  his  own  debt  with- 
out express  agreement,  is  not  a  payment  thereof,  but  that  the 
giving  of  the  note  may  be  shewn  in  evidence  on  the  trial  in 
an  action  brought  on  the  original  demand,  and  will  defeat  a 
recovery  on  it  unless  the  note  is  produced  and  canceled :  1 
that  the  note  of  a  third  person  is  not  payment  unless  there 
be  an  express  agreement  that  it  is  so  received,  or  unless  the 
creditor  receiving  it  neglects  to  demand  the  same  when  due 
and  charge  the  parties  liable  thereon :  2  that  when  the  receiv- 
ing of  the  note  of  a  third  person  is  a  part  of  the  original  con- 
tract, as  for  the  sale  of  goods  or  of  a  chattel,  it  is  an  absolute 
payment  according  to  the  agreement  between  the  parties :  3 
and  that  when  a  creditor  accepts  a  note  or  bill  from  his  debtor 
payable  at  a  future  day,  it  operates  to  suspend  his  right  of 
action  until  the  maturity  of  the  bill  or  note  so  received.  4 

Where  the  note  of  a  third  person  is  taken  for  goods  sold 
and  delivered,  and  the  bill  therefor  is  receipted  in  full,  it  is  a 
question  of  fact  to  be  determined  by  a  jury,  whether  it  was  a 
part  of  the  original  agreement  that  the  vendor  should  receive 
it  in  full  satisfaction  for  the  goods  sold,  so  that  he  and  not 
the  purchaser  should  run  the  risk  of  the  note.  5  Presump- 
tively such  a  note  received  for  goods  previously  sold,  is  not  a 
payment;  but  the  parties  may  agree  that  the  payment  shall 
be  made  in  that  manner;  and  if  the  purchaser  offers  to  buy 
goods  and  give  therefor  the  note  of  a  third  person  in  payment, 
and  his  proposition  is  accepted  and  the  goods  are  delivered, 
and  the  note  is  given  on  the  sale  and  not  indorsed  by  the  pur- 
chaser; it  is  to  be  deemed  a  payment  and  satisfaction.  By 
not  indorsing  the  note,  or  guarantying  the  payment,  the 

1  Hughes  v.  Wheeler,  8  Cowen  R.,  77. 

*  8  John.  R.,  202;  15  John.  R.,  247;  6  John.  R.,  68;  2  Watts,  121;  9  Conn. 
R.,  23;  3  KernanR.,  167. 

1  Rew  v.  Barber,  3  Cowen,  272;  Anthon  N.  P.,  52,  n.  a. 
4  Okie  v.  Spencer,  2  Whart.,  253;  Nichol  v.  Bat«,  10  Yerger,  429;  Lishy  T. 
O'Brien,  4  Watts,  141 ;  8  John.  R.,  890. 

•  Johnson  T.  Weed,  9  John.  R.,  810;  Noel  v.  Murray,  supra. 


204  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

purchaser  evidently  declines  to  pledge  his  own  responsi- 
bility, i 

On  principle,  there  is  no  difference  between  the  giving  of  a 
note  of  a  third  person  and  the  giving  of  any  other  property, 
in  payment  of  a  prior  debt;  if  the  parties  agree  that  it  shall 
be  so  taken,  it  is  a  discharge  and  satisfaction  just  the  same 
whether  it  be  a  note  of  this  kind  or  a  chattel. 2  "If  a  man 
has  a  bill  payable  to  him,  or  bearer,  and  he  delivers  it  over 
for  money  received,  without  indorsement,  this  is  a  plain  sale 
of  the  bill,  and  he  who  sells  it  does  not  become  a  new  secu- 
rity." 3 

When  the  note  of  a  third  person  is  delivered  on  a  debt 
due  and  is  received  as  a  conditional  payment,  if  the  creditor 
uses  diligence  in  demanding  payment  of  the  note  at  maturity, 
and  in  giving  notice  of  the  non-payment  so  as  to  charge  the 
indorsers  thereon,  the  liability  on  the  original  consideration 
revives :  and  the  creditor  may  bring  his  action  directly 
on  the  original  demand.  4  But  he  must  as  we  have  seen,  be 
ready  on  the  trial  to  surrender  the  note  so  received;  for  he 
cannot  recover  on  the  original  contract  debt  so  long  as  the 
note  is  outstanding  and  the  debtor  is  liable  on  tV,  nor  where 
the  debtor  is  deprived  of  the  advantage  to  be  derived  from 
the  note.  5 

When  it  is  said  that  the  liability  on  the  original  debt  revives, 
the  meaning  is  that  the  creditor  has  an  immediate  remedy 
thereon;  for  the  debt  never  revives  where  it  has  been  once 

1  Whitbeck  v.  Van  Ness,  11  John.  R.,  409,  and  the  cases  there  cited.  As 
to  the  effect  of  giving  notes  and  bills  in  payment  of  debts;  see  1  Cranch,  181 ; 
Bank  of  U.  S.  v.  Daniels,  12  Peters'  R.,  32;  10  John.  R.,  104;  5  id.  68;  2 
John.  Cas.,  438;  1  John.  R.,  34;  8  id.  304;  15  id.  247.  6  Cranch,  253;  2  N. 
Hamp.  R.,  525;  7  John.  R.,  310;  17  id.  340;  3  Serg.  and  Rawle,  233;  2  Hall, 
226;  9  Porter,  145;  9  Conn.,  23;  2  Gill,  and  J.,  493;  2  Watts,  121 ;  8  Greenl., 
298. 

1  Brown  v.  Feeter,  7  Wend.  R.,  301;  11  John.  R.,  409. 

1  Bank  of  England  v.  Newman,  1  Ld.  Raym.,  442;  12  Mod.,  241. 

4  Clark  T.  Young  &  Co.,  1  Cranch,  181;  6  Mod.,  147;  Ward  v.  Evans,  1  Ld. 
Raym.,  928;  Hickling  v.  Hardy,  7  Taunt.,  312;  Bishop  v.  Rowe,  3  Maule  and 
S.,  362;  Smith  v.  Fenaud,  7  Bar.  and  C.,  19;  Robinson  v.  Reed,  9  Bar.  and 
C.,  449. 

*  Harris  v.  Johnson,  3  Cranch,  811. 


PAYMENT    BY    NOTE   OR    BILL.  205 

extinguished.  Properly  speaking,  the  right  of  action  which 
has  been  suspended  by  the  giving  of  a  new  credit,  revives; 
the  original  liability  remaining  all  the  while  undischarged,  i 

The  remedy  only  is  affected  by  the  taking  of  a  bill  on  a 
debt  due :  thus,  a  common  carrier  has  a  lien  upon  the  goods 
in  his  possession  for  the  freight  or  price  of  transportation; 
but  if  he  accepts  a  bill  of  exchange  therefor,  or  a  note,  or 
otherwise  gives  a  credit  for  the  amount  due,  and  delivers  the 
goods,  it  is  a  relinquishment  of  his  lien.  2 

In  one  of  the  earlier  cases  decided  in  this  state,  the  action 
was  on  an  agreement  to  sell  a  quantity  of  flour  for  the  note  of 
one  Lyon.  When  the  flour  was  demanded  and  the  note 
tendered,  Lyon  had  failed.  And  the  court  held  that  although 
there  was  a  valid  contract,  executory  in  its  nature;  yet  the 
consideration  agreed  to  be  given  by  the  purchaser  having 
failed,  the  vendor  was  not  bound  to  deliver  the  flour  in 
exchange  for  the  note  of  an  insolvent :  3  and  the  court  assumes 
it  as  settled  law,  that  upon  an  agreement  to  accept  notes  in 
payment,  if  before  the  delivery  of  the  articles  purchased,  the 
notes  turn  out  not  to  be  good,  a  tender  of  them  is  not  to  be 
considered  a  payment,  unless  it  was  a  part  of  the  agreement 
to  take  them  as  such,  and  to  run  the  risk  of  their  being  paid.  4 

In  Markle  v.  Hatfield,  the  plaintiff  sold  to  the  defendant  a 
number  of  cattle,  and  the  defendant  paid  him  therefor  in  bank 
bills  which  were  received  in  full  payment.  Among  the  bills 
so  received  there  was  a  counterfeit  fifty  dollar  bill;  but  it  was 
not  shewn  that  either  of  the  parties  knew  at  the  time  that  the 
bill  was  counterfeit;  and  it  was  adjudged  that  the  plaintiff 
was  entitled  to  recover  the  fifty  dollars  witli  interest.  5  The 
negotiable  note  of  a  third  person,  and  a  bank  note,  are  equally 

1  Puckford  v.  Maxwell,  6  Term  R.,  52. 

'Hornecastle  v.  Farran,  3  B.  and  Aid.,  497;  Herbert  v.  Hallett,  3  John. 
Cas.,  93;  Edwards  on  Bailments,  647-662. 

»  Roget  v.  Merritt,  2  Cainc's  R.,  117. 

4  Owenson  v.  Morse,  7  Term  R.,  64;  Puckford  v.  Maxwell,  6  Term  R.,  62. 

*  2  John  R.,  465.  Kent,  Ch  J.,  reviews  the  English  canes  on  the  subject, 
and  holds  that  this  is  not  a  case  where  the  party  receiving  the  payment  assumes 
the  risk  of  forgery. 


206  BILLS   OF   EXCHANGE  AND    PROMISSORY  NOTES. 

promissory  notes,  for  the  payment  of  money;  and  if  the 
receiver  may  be  presumed  in  the  one  case,  and  not  in  the 
other,  to  have  taken  upon  him  the  risk  of  the  solvency  of  the 
drawer,  there  is  no  presumption  in  either  case,  that  he  assumes 
upon  himself  the  risk  of  forgery. 

The  plaintiff  kept  an  account  with  the  Ontario  Bank,  at 
their  banking  house  in  Utica,  and  on  the  30th  of  May  drew 
his  check  on  the  bank  for  two  thousand  dollars,  having  more 
than  that  sum  on  deposit,  and  received  the  amount  in  bank 
bills,  among  which  was  a  bill  of  the  Franklin  Bank  of  New- 
York  for  five  hundred  dollars :  the  Franklin  Bank  had  stopped 
payment  the  day  before,  but  the  fact  was  not  known  at  Utica, 
and  the  bill  in  question  was  paid  to  the  plaintiff  in  good  faith 
and  in  the  ordinary  course  of  business,  neither  party  know- 
ing that  the  Franklin  Bank  had  failed :  and  it  was  adjudged 
that  the  plaintiff  was  entitled  to  return  the  bill  and  demand 
the  amount  of  it  in  money,  i 

A  contrary  rule  has  been  adopted  in  some  of  the  other 
states :  thus,  in  Pennsylvania  it  has  been  held  that  a  payment 
in  current  bank  notes  discharges  the  debt,  notwithstanding 
the  previous  failure  of  the  bank,  of  which  both  parties  were 
ignorant,  had  rendered  the  notes  worthless.  2  So,  in  Alabama 
it  is  adjudged  that  a  payment  made  in  genuine  bank  notes,  in 
good  faith,  and  in  ignorance  of  the  failure  of  the  bank,  dis- 
charges the  debt,  though  the  notes  were  at  the  time  of  little 
or  no  value.  3 

Undoubtedly  the  parties  may  agree  to  make  the  payment 
of  such  bank  bills  equivalent  to  the  payment  of  money;  but  it 
is  difficult  to  state  a  reason  why  the  note  of  a  bank  any  more 
than  the  note  of  an  individual  should  be  deemed  an  absolute 
payment  of  a  debt  due,  in  the  absence  of  any  agreement  that 

1  Lightbody  v.  Ontario  Bank,  11  Wend.  R.,  9.  In  the  court  for  the  correc- 
tion of  errors,  the  judgment  of  the  Supreme  Court  in  this  action  was  affirmed. 
13  Wend.  R.,  101;  see  also  Gilman  v.  Peck,  11  Verm. ,516;  9  N.  Hamp.,  365, 
and  10  Wheat.,  333;  6  Mass.  R.,  182;  Houghton  v.  Adams,  18  Barb.,  645. 

*  Bayard  v.  Shenck,  1  Watts  and  Serg.,  92.     • 

*  Lowry  v.  Murrell,  2  Porter  280;  see  also  Scruggs  v.  Gass,  8  Terger,  Tenn. 
R.,  175. 


PAYMENT    BY    NOTE   OR   BILL.  207 

it  is  so  received,  i  And  it  is  clear  that  the  weight  of  author- 
ities does  not  permit  the  extinguishment  of  debts  in  so  easy  a 
manner.  It  is  not  a  question  of  good  faith,  but  one  of  fact, 
whether  the  debt  has  been  paid;  and  it  cannot  be  reasonably 
maintained  that  the  act  of  handing  over  worthless  paper, 
though  neither  party  knows  it  to  be  worthless,  is  a  payment 
of  money. 

A  payment  in  forged  or  counterfeit  bank  notes  is  a  nullity, 
and  does  not  operate  to  discharge  a  debt,  though  both  parties 
believed  them  to  be  genuine.  2  But  where  the  payment  is 
made  to  the  bank  issuing  the  notes,  and  the  forgery  is  not 
discovered  until  sometime  afterwards,  or  where  the  person  to 
whom  they  are  paid  does  not  return  them  within  a  reasonable 
time  after  discovering  their  worthlessness,  both  parties  acting 
in  good  faith,  the  party  so  receiving  them  must  bear  the  loss.  3 
The  rule  of  diligence  is  the  same  whether  the  notes  be  coun- 
terfeit or  the  genuine  notes  of  an  insolvent  bank :  4  there  must 
be  a  prompt  offer  to  return  the  bills.  Both  parties  have  tacitly 
agreed  that  the  thing  should  be  received  in  payment,  and  al- 
though they  were  acting  under  a  mistake  as  to  the  nature  or 
value  of  the  thing  paid,  yet  since  the  debtor  has  acted  honest- 
ly, he  can  only  be  put  in  the  wrong  by  an  offer  to  correct  the 
error.  Though  the  bill  has  no  intrinsic  value,  it  should  be 
returned  to  the  debtor,  so  as  to  enable  him  to  trace  out  and 
fall  back  upon  the  person  from  whom  he  received  it.  And 
for  the  same  reason  the  bill  should  be  returned  without  any 
unnecessary  delay.  5 

1 13  Wend.,  101;  11  Verm..  516 j  9  N.  Hamp.,  8665  2  Hill  (So.  C.,)  R., 
609;  Story  on  Notes,  §  119,  189. 

'Ilargrave  v.  Dusenberry,  2  Hawks,  326;  Ramsdale  v.  Huton,  8  Barr., 
880;  Anderson  v.  Hawkins.  3  Hawks,  568;  Eagle  Bank  v.  Smith,  5  Conn.  R., 

71. 

'  U.  S.  Bank  v.  Bank  of  Georgia,  10  Wheat.,  833;  Thomas  v.  Todd,  6  Hill 

R.,  840. 

4  Camidge  v.  Allenby,  6  Barn,  and  Cress.,  878. 

•6  Hill  K.,340;  2  John.  R.,  455;  Jones  v.  Ryde,  5  Taunt.,  488;  6  Barn, 
and  Cress.,  373;  G  Mass.  R.,  182. 


CHAPTER   IV. 

OF  NOTES  AND  DRAFTS  NOT  NEGOTIABLE— CONTRACT 
OF  GUARANTY. 

We  have  seen  that  an  instrument  drawn  in  the  form  of  a 
negotiable  promissory  note,  and  executed  with  a  seal,  is  not 
negotiable;  because  it  is  not  rendered  so  by  statute,  i  It  is 
something  more,  or  something  different  from  a  note,  and  is 
not  therefore  included  among  notes  rendered  assignable  or 
indorsable  over  in  the  same  manner  as  inland  bills  of  exchange 
are  or  may  be,  according  to  the  custom  of  merchants.  2  Before 
the  statute  took  effect,  over  a  century  and  a  half  since,  it  had 
become  a  common  practice  to  make  notes  for  the  payment  of 
money  to  a  certain  person,  or  to  his  order,  or  unto  bearer,  and 
to  transfer  them  by  indorsement  or  by  delivery  from  hand  to 
hand  like  bills  of  exchange.  3  But  the  custom  was  strenu- 
ously resisted  by  the  courts,  and  it  was  found  necessary  to 
give  it  the  authority  of  a  statute  law.  And  that  statute  of 
course,  refers  to  notes  made  in  manner  and  form  according  to 
the  growing  custom;  and  it  was  not  customary  to  execute 
them  under  seal.  And  though  bonds  were  at  that  time 
occasionally  transfered  by  indorsement,  as  may  be  infered 
from  the  reports  of  decisions  made  before  the  act  was  passed, 
they  were  not  described  as  notes;  and  as  they  were  not  subse- 
quently made  assignable  in  that  way  by  statute,  the  practice 
did  not  ripen  into  a  settled  custom,  so  as  to  become  a  law  of 
the  land.  4 

1  Warren  v.  Lynch,  5  John.  R.,  239 ;  Clark  v.  Farmers'  Man.  Co.,  15  Wend. 
R.,256. 

*  3  and  4  Anne,  c.  9,  made  perpetual  by  7  Anne,  c.  25,  §  3. 

1  Buller  v.  Crips,  6  Mod.  R.,  29;  heretofore  cited  at  length. 

4  4  Mod.,  242;  De  la  Chaumette  T.  Bank  of  England,  9  Bar.  and  Cress., 
215 j  6  Mod.  R.,  29. 


NOTES    AND    DRAFTS    NOT    NEGOTIABLE.  209 

As  the  English  statute  has  been  generally  adopted  in  this 
country,  in  some  of  the  states  by  express  enactments,  and  in 
others  by  a  custom  that  has  received  judicial  approbation,  it 
may  be  asserted  as  the  general  rule,  that  sealed  notes  do  not 
possess  negotiable  qualities,  i  But  the  statutes  of  the  different 
states  are  not  entirely  uniform;  and  in  several  of  them  sealed 
instruments,  as  well  as  notes,  are  made  negotiable  by  statute;  2 
and  in  others  the  negotiability  of  notes  is  qualified  by  certain 
restrictions  or  limitations  imposed  upon  the  rights  of  the 
indorsee. 

In  those  states  where  a  sealed  note  is  not  made  negotiable, 
the  instrument  is  treated  as  a  specialty;  3  and  it  has  been 
held  to  be  correctly  described  as  a  bond.  4  Though  not  a 
good  note  within  the  statute,  it  is  a  valid  contract;  and  the 
payee  may  recover  on  it  according  to  the  terms  of  the  agree- 
ment. 5  And  so  may  the  assignee,  whenever  such  instru- 
ments are  by  law  assignable;  but  he  takes  the  same  subject 
to  every  legal  defence  arising  on  the  contract;  6  and  must 
declare  thereon  as  upon  a  covenant,  i 

On  the  other  hand,  in  those  states  where  sealed  notes  are 
made  negotiable  by  statute  and  are  regarded  as  commercial 
paper,  the  remedy  upon  them  is  the  same  as  upon  other  notes, 
except  in  so  far  as  it  is  modified  by  the  statutory  law.  8  When 

1  Story  on  Notes,  §  6;  Glyn  v.  Baker.  13  East,  509. 

1  "  In  Pennsylvania,  Virginia,  Georgia,  Arkansas,  Missouri,  and  Mississippi, 
sealed  instruments,  as  well  as  notes,  are  made  negotiable  by  statute,-  and  in 
Arkansas,  all  agreements  and  contracts  in  writing,  for  the  payment  of  money 
or  property,  are  made  assignable.  But  these  assignments,  in  some  of  these 
last  mentioned  states,  expressly  reserve  to  the  debtor  all  matters  of  defence 
existing  prior  to  the  notice  of  the  assignment."  3  Kent's  Com.,  73,  7th  ed., 
note. 

•  15  Wend.  R.,  256;  6  John.  R.,  240.    Adding  a  scrawl  in  the  form  of  an 
L.  S.,  is  not  such  a  seal  as  our  courts  will  take  notice  of,  and  therefore  a  note 
so  executed,  in  other  respects  negotiable,  may  be  recovered  on  as  such  in  this 
state,  though  made  in   Virginia  and  payable  in  this  state.    See  Peaaely  v. 
Boatwright,  2  Leigh,  195. 

4  Duncan  v.  McAffee,  2  Scam.,  559. 

•  Maber  v.  Massias,  2  Bla.  Rep.,  1072. 

•  Jerome  v.  Whitney,  7  John.  R.,  822;  Code  of  Procedure,  $  112. 

T  1  Cowen's  Trea.  52,  8d  ed;  Brown  v.  Lockhart,  1  Mis.,  409;  2  McCord, 
159,  880;  Steele  v.  Oswego  Cotton  Mf.  Co.,  15  Wend.,  266. 

•  Bank  of  St.  Clairsville  T.  Smith,  5  Ham.,  222;  Ege  T.  Kyle,  2  Watts,  222. 


210  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOT*,!*. 

made  in  a  state  where  they  are  negotiable,  payable  in  another 
where  they  are  not,  the  remedy  thereon  is  according  to  the 
law  of  the  place  where  performance  is  to  be  made;  i  though 
the  contract  is  to  be  enforced  according  to  the  lex  loci  con- 
tractus.  2 

Notes  payable  in  specific  articles  are  not  promissory  notes 
within  the  statute;  3  and  are  not  negotiable.  4  But  they  are 
a  very  common  species  of  contract,  and  when  given  for  value 
received,  and  it  is  so  expressed  on  the  face  of  the  instrument, 
it  is  not  necessary  in  the  first  instance  to  prove  the  considera- 
tion for  the  promise;  for  the  acknowedgment  of  value  received 
is  sufficient  to  cast  upon  the  promisor  the  burden  of  proving 
that  there  was  no  consideration.  5  If,  however,  the  plaintiif 
allege  the  particular  consideration  for  which  the  note  was 
given,  he  must  prove  it  as  alleged  in  his  complaint :  thus,  if 
the  plaintiff,  instead  of  alleging  in  general  terms  that  a  note 
payable  in  neat  cattle  was  given  for  value  received,  states  spe- 
cially that  it  was  given  in  consideration  that  the  plaintiff 
would  sell  and  convey  to  the  defendant  a  certain  piece  of 
land,  he  must  prove  the  averment  as  laid  in  his  complaint.  6 
Having  specified  in  what  the  value  received  consisted,  he 
must  prove  his  allegation. 

When  such  a  note  does  not  purport  to  have  been  given  for 
value  received,  it  is  a  special  contract;  and  if  no  considera- 
tion appear  upon  the  face  of  it,  and  none  be  alleged,  it  can- 
not be  given  in  evidence  under  a  count  for  money,  nor  can  the 
real  consideration  be  proved.  7  But  where  an  action  was 
brought  on  a  note  payable  in  money,  which,  on  account  of  a 
contingency  as  to  the  person  to  whom  the  payment  was  to  be 

1  5  John.  R.,  239. 

a  Stacy  v.  Baker,  1  Scam. ,417;  Dow  v.  Russell,  12N.  Hamp.,  49;  Harrison 
v.  Edwards,  12  Verm. ,648;  2  Met.,  381;  13  Conn.,  249;  1  Smedes  and  Marsh, 
176;  22  Wend.,  215. 

1  Thomas  v.  Roosa,  7  John.  R.,  461;  Thompson  v.  Sloan,  23  Wend.  R.  71. 

4  See  terms  of  the  statute,  2  R.  S.  of  New-York,  62,  3d  ed. 

6  Jackson  v.  Alexander,  3  John.  R.,  484;  Jerome  v.  Whitney,  7  John.  R. 
821.     They  are,  however,  assignable. 

•  7  John.  R.,  321 ;  Knill  v.  Williams,  10  East  R.,  431. 

7  Saxton  v.  Johnson,  10  John.  R.,  418. 


NOTES    AND    DRAFTS    NOT    NEGOTIABLE.  211 

made,  was  not  a  promissory  note  within  the  statute,  it  was 
held  that  being  given  for  value  received  it  was  admissible  in 
proof  under  the  money  counts,  i 

Notes  payable  in  chattels,  goods  or  choses  in  action,  not 
being  promissory  nott-s  within  the  statute,  are  to  be  construed 
and  enforced  in  the  same  manner  as  other  parol  contracts. 
So,  also,  an  order  for  a  given  sum,  payable  in  goods  or  in  the 
proceeds  thereof,  is  not  a  bill  of  exchange;  and  therefore 
where  the  drawee  has  accepted  such  a  bill,  the  payee  cannot 
recover  on  it  unless  he  avers  and  proves  that  the  acceptor  has 
in  his  hands  either  goods  or  the  proceeds  of  them,  such  as  are 
described  in  the  order,  sufficient  for  the  payment.  2    But  if 
the  order  be  so  drawn  as  to  imply  that  the  drawee  has  a  fund 
in  his  hands  sufficient  to  meet  the  draft,  the  acceptance  of  it, 
though  it  be  not  a  bill  of  exchange,  is  deemed  an  admission 
which  will  support  an  action  for  money  had  and  received.  3 
So  the  acceptance  of  a  draft  drawn  on  a  present  fund  in  the 
hands  of  the  drawee,  is  prima  facie  evidence  of  the  sufficiency 
of  that  fund.  4     In  like  manner  where  the  owner  of  a  quan- 
tity of  flour  sells,  and  delivers  to  the  vendee  an  order  on  his 
wharfinger  for  twenty  sacks,  and  the  order  is  accepted  in  gen- 
eral terms,  the  title  passes  and  the  vendee  may  bring  his 
action  directly  against  the  bailee  for  the  flour.     Bayley  B. 
"  This  was  an  order  to  deliver  twenty  sacks  of  flour,  not  out 
of  a  larger  quantity,  but  twenty  sacks  specifically,  and  when 
the  defendants  accept   that  order  without  restriction,  they 
admit  that  they  have  twenty  sacks  which  they  will  appropri- 
ate to  that  order,  and  they  have  no  right  afterwards  to  say 
that  they  have  not  twenty  sacks  unappropriated."  5     Having 
accepted  the  order,  he  is  estopped  from  denying  that  he  has 
the  property  called  for  by  the  order.  6 

1  Walrad  and  Bowman  v.  Potrie,  4  Wend.  R..  575.  The  note  in  this  case 
was  payable  to  P.  Walrad  or  Bobcrt  Bowman,  and  it  was  stated  to  hare  been 
drawn  for  value  received. 

1  Atkinson  v.  Manks,  1  Cowen  R.,  691. 

•Maber  v.  Massias,  2  Bl.  Rep.,  1072;  Lentv.  Hodgman,  15  Barb.,  274. 

4  Bank,  8tc.,  v.  Sanders,  8  Marsh,  184;  Varner  v.  Nobleborongh,  2  Greenl., 
123;  11  Mass.  R.,  14V 

•  Gillett  v.  Hill.  4  Tyr.,  290;  2  C.  and  M.,  630,  S.  C. 

•  Chapman  v.  Searle,  8  Pick.  R.,  88. 


212  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

William  Watts  drew  a  bill  on  Massias,  his  factor,  for  one 
hundred  and  ninety-five  pounds,  payable  out  of  the  produce  of 
goods  in  his  hands,  after  discharging  prior  acceptances;  and 
the  drawer  accepted  in  these  words,  "  I  agree  to  conform  to 
this  order."  The  bill  was  transfered  to  the  plaintiff,  who 
brought  an  action  thereon  against  the  acceptor.  Per  Curiam: 
"  The  question  is,  whether  the  defendant  had  in  his  hands 
.£195  for  the  use  of  the  plaintiff.  He  is  proved  to  have  had 
goods  to  the  amount  of  ,£1,657,  and  that  his  acceptances,  in 
the  common  and  technical  sense  of  the  words,  as  applied  to 
bills  of  exchange,  together  with  certain  other  indorsements  by 
which  he  had  engaged  himself  to  pay  money  for  Watts,  left  a 
balance  in  his  hands  more  than  sufficient  to  pay  the  plaintiff; 
if  we  exclude  the  balance  of  .£870  due  to  Massias  himself. 
This  balance,  then  unliquidated,  could  never  be  meant  to  be 
provided  for;  nor  was  the  bill,  or  its  acceptance,  meant  to  be 
subject  to  it;  for  then  there  would  have  been  fraud  in  the 
drawer,  and  also  in  the  acceptor;  for  both  knew  or  must  be 
supposed  to  know,  at  least  Massias  knew,  how  the  balance 
then  stood.  If  he  meant  to  have  reserved  his  own  balance, 
he  should  have  made  a  special  acceptance.  But  having  ac- 
cepted it  generally  in  the  terms  of  the  draft,  that  is,  subject 
only  to  prior  acceptances,  he  shall  not  shelter  himself  by  this 
concealed  balance  due  to  himself  in  the  course  of  a  running 
account."  i 

A  conditional  acceptance  becomes  absolute  as  soon  as  the 
condition  is  fulfilled.  2  But  in  order  to  recover  on  it,  it  must 
be  declared  on  specially,  with  an  averment  that  the  condition 
has  happened  or  has  been  performed.  3  Thus,  where  the 
drawee  accepts  the  bill  "  to  pay  when  in  funds"  or  "  when 
certain  goods  are  sold,"  and  the  holder  is  contented  to  receive 
such  an  undertaking,  the  contract  of  the  acceptor  binds  him 
to  pay  only  when  the  event  takes  place.  4  And  in  an  action 
on  such  an  acceptance,  the  holder  must  of  course  shew  that  it 

1  2  Bl.  Rep.,  1072. 

•.Sproat  v.  Matthews,  1  Term  R.,  182. 

*Langston  v.  Corney,  4  Campb..  176;  1  Marsh,  176. 

*  Julian  v.  Showbrooke,  2  Wils.,  9;  Smith  v.  Abbott,  Stra.,  1152 


NOTES    AND    DRAFTS    NOT    NEGOTIABLE. 


213 


has  taken  place;  since  that  is  one  of  the  facts  constituting  his 
cause  of  action,  i 

In  an  action  on  a  draft  payable  to  the  order  of  Kellogg  or 
Mellor,  out  of  the  proceeds  of  certain  carriages  when  sold,  it 
is  necessary  to  allege  the  original  consideration  of  the  order 
and  acceptance;  and  where  the  suit  is  brought  in  the  name 
of  the  assignee  of  the  order,  it  is  incumbent  upon  him  to 
allege  and  prove  the  consideration  of  the  assignment,  that 
same  was  made  by  both  of  the  persons  to  whose  order  the 
draft  was  made  payable,  that  the  carriages  were  sold  for  a 
sum  sufficient  to  answer  the  draft,  and  that  the  acceptor 
promised  to  pay  the  same.  2  Not  being  negotiable,  such  a 
draft  is  in  legal  effect  the  same  as  if  the  word  order  had  been 
omitted;  and  therefore  the  assignee  must  derive  his  title  to 
the  instrument  independent  of  these  negotiable  terms.  So,  an 
order  for  the  payment  of  rents  to  accrue,  drawn  by  a  landlord 
on  his  tenant,  payable  to  a  third  person,  is,  when  accepted  or 
assented  to,  an  equitable  assignment;  and  the  payee  thereof 
may  recover  thereon.  3  In  like  manner,  where  the  owners  of 
certain  securities  assign  them,  in  trust,  to  discharge  certain 
specified  debts,  "  the  balance  to  be  held  subject  to  their  order," 
and  the  assignees  accept  the  trust,  and  the  assignors  after- 
wards give  an  order  on  them  for  the  balance,  of  which  they 
are  properly  notified,  it  is  held  that  the  payee  of  the  order 
may  recover  against  them  the  balance  in  their  hands,  though 
they  have  not  formally  accepted  the  order;  the  acceptance  of 
the  trust  is  in  effect  a  promise  to  the  payee  of  the  order.  4 

Orders  for  goods  in  the  hands  of  the  drawee  are  evidence 
of  goods  sold  to  the  drawer,  and  delivered  to  the  payee  at  his 
request.  In  this  respect  they  differ  from  orders  for  the  pay- 
ment of  money,  which  are  presumed  to  be  drawn,  nothing 
appearing  to  the  contrary,  upon  funds  in  the  hands  of  the 

1  Read  v.  Wilkinson,  2  Wash.  C.  C.,  614;  1  Peters,  264;  Brown  T.  Colt,  1 
M'Cord,  408. 

1  De  Forest  v.  Frary.  6  Cowen  R.,  151. 
*  Morton  v.  Naylor,  1  Hill  R.,  588,  and  cases  there  cited. 
4  Weston  v.  Barker,  12  John.  R.,  276. 


214  BILLS   OF  EXCHANGE  AND    PROMISSORY    NOTES. 

drawee;  and  if  paid,  give  no  cause  of  action  against  the 
drawer,  unless  the  presumption  is  rebutted  by  other  evidence,  i 
In  an  action  for  money  lent,  and  lor  money  paid,  laid  out 
and  expended  for  the  use  of  the  defendant,  the  plaintiff  on 
an  issue  of  n&n-assumpsit  introduced  in  evidence  a  note  for 
forty  pounds,  expressed  to  have  been  given  for  value  received, 
payable  in  lands  at  nine  shillings  per  acre,  and  then  proved 
that  the  defendant  had  acknowledged  the  note  and  said  it  was 
a  just  debt,  and  that  he  had  been  deceived  in  regard  to  the 
lands  and  was  not  able  to  give  a  good  title  to  them  according 
to  the  terms  of  the  note;  and  it  was  held  that  the  note  was 
properly  received  in  evidence,  and  that  the  plaintiff  was 
entitled  to  recover  the  face  of  the  note.  2 

In  actions  on  notes  payable  in  specific  articles,  and  on  con- 
tracts for  the  delivery  of  chattels,  it  is  essential  to  ascertain  in 
the  first  place  the  true  construction  of  the  agreement,  in  order 
to  determine  what  allegations  and  proof  are  necessary  to  be 
made  to  entitle  the  person  in  whose  favor  the  instrument  is 
executed  to  recover  on  it.  As  a  general  rule,  the  party  bound 
to  render  a  service  or  make  a  payment  by  a  given  day,  must 
seek  the  party  to  whom  the  debt  or  duty  is  due.  3  Is  the 
place  of  performing  the  contract  changed  by  substituting  a 
commodity  for  money  ?  The  implied  place  of  performance  is 
sometimes  changed  by  the  nature  of  the  article  to  be  delivered. 
If  a  merchant  or  manufacturer  engages  to  pay  on  demand 
in  the  articles  of  his  trade,  and  no  place  is  specified  in  the 
contract,  the  store  of  the  merchant,  or  the  workshop  or  place 
of  deposit  of  the  fabrics  of  the  manufacturer,  is  the  place 
where  payment  must  be  demanded  before  an  action  accrues 
for  non-payment  of  the  contract;  4  because,  from  the  peculiar 
circumstances  and  course  of  business  of  the  promisors,  the 
inference  is  that  the  parties  intended  that  the  articles  should 
be  delivered  at  the  promisors'  usual  place  of  making  and 

1  Alvord  v.  Baker,  9  Wend.  R.,  323. 

a  Smith  v.  Smith,  2  John.  R.,  235;  seeNewcombv.  Cramer,  9  Barb.  R.,402. 

*  Edwards  on  Bailments,  181,  and  cases  there  cited. 

*  Chip,  on  Cont.,  28,  9. 


NOTES  AND  DRAFTS  NOT  NEGOTIABLE.          215 

delivering  the  articles  sold  by  them.  When  the  engagement 
is  that  the  articles  shall  be  delivered  on  demand,  this  seems  to 
imply  that  the  creditor  must  go  to  the  debtor  to  make  the 
demand,  before  the  latter  can  be  in  default :  and  when  payable 
in  farm  produce,  without  specifying  any  time  or  place  of  pay- 
ment, the  note  is  payable  on  demand  at  the  farm  of  the 
debtor,  i 

But  where  a  note  of  hand  is  given,  payable  at  a  fixed  time, 
in  cattle,  grain,  or  other  portable  articles,  and  no  place  of 
payment  is  designated  in  the  note,  the  creditor's  place  of 
residence  is  the  place  of  payment;  for  in  this  case  there  is 
nothing  to  rebut  the  usual  presumption  that  the  debtor  or 
party  bound,  must  seek  his  creditor  and  discharge  his  obliga- 
tion within  the  time  limited.  2  Thus,  one  who  contracts  to 
pay  a  given  sum  in  salt,  on  or  before  a  day  named,  must  go  to 
the  residence  of  his  creditor  and  make  his  payment  there. 

There  is  some  diversity  in  the  decisions  in  regard  to  the 
place  where  a  contract  for  the  delivery  of  specific  articles  is 
to  be  performed ;  but  this  diversity  arises  out  of  the  difference 
of  circumstances  attending  the  contract.  Thus,  the  want  of 
time  in  the  contract  renders  it  payable  on  demand ;  and  the 
fact  that  it  is  payable  in  farm  produce,  draws  after  it  the  infer- 
ence that  the  farm  is  the  place  of  payment.  3  So,  when  a 
merchant  gives  a  due  bill  for  goods,  or  a  mechanic  for  work, 
without  mentioning  any  time  or  place  for  payment,  the  natural 
and  irresistible  inference  is,  that  the  merchant  agrees  to  pay 
at  his  store  and  the  mechanic  at  his  shop.  4 

It  is  held  in  Kentucky,  that  on  contracts  for  the  delivery  of 
property,  where  no  place  is  expressed,  the  usual  residence  of 
the  obligor  is  the  place  of  performance;  and  that  when  the 
property  is  to  be  delivered  on  request,  a  special  request  at  the 

1  Lobdell  v.  Hopkins,  6  Cowen  R.,  516;  7  Wend.,  312. 
1  Goodwin  T.  Holbrook,  4  Wend.  R.,  877. 

*  5  Cowen  R.,  516;  2  Bibb's  Kentucky  R.,  280;  16  Mass.  R.,  458. 

*  Chipm.  Tr.,  28,  49.    A  due  bill  payable  in  ready  made  clothing,  must  be 
demanded  at  the  maker's  store,  and  it  may  be  demanded  in  parcels  at  different 
times ;  but  the  holder  cannot  demand  an  article  made  for  a  customer.    Vance 
T.  Bloomer,  20  Wend.,  196. 


216  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

obligor's  residence  must  be  averred,  i  The  action  was  on  a 
contract  for  the  payment  of  two  hundred  dollars,  in  a  negro, 
upon  request,  and  it  was  adjudged  on  demurrer  that  the 
plaintiff  must  aver  in  his  declaration,  a  demand  of  the  chattel 
at  the  residence  of  the  vendor,  or  shew  circumstances  justify- 
ing a  departure.  The  law  judges  the  place  according  to  the 
nature  and  subject  matter  of  the  thing  to  be  performed;  pre- 
suming, in  such  a  case,  that  the  contract  is  to  be  executed  at 
the  place  where  it  is  made.  2 

The  maker  of  a  note,  payable  in  ponderous  articles  by  a 
day  named,  is  bound  to  seek  the  payee  and  learn  from  him 
where  he  will  receive  them,  and  make  the  delivery  accord- 
ing to  his  direction;  provided  the  place  named  is  reasonable, 
and  within  the  probable  contemplation  of  the  parties  when 
the  note  was  given.  3  But  where  a  person  assumes  the  cus- 
tody of  cumbersome  goods  that  have  been  distrained  for  rent, 
and  gives  a  receipt  therefor  promising  to  deliver  the  same  in 
six  days,  after  demand,  the  promisor  is  not  bound  to  trans- 
port the  goods  to  a  different  place  from  that  where  he  re- 
ceived them;  it  is  enough  if  he  oifer  to  deliver  them  when  de- 
manded at  the  place  of  deposit.  4  So,  where  the  owner  of  a 
saw-mill  gives  his  note  payable  in  lumber  at  cash  prices  when 
called  for,  the  payee  must  go  to  the  maker's  residence  or  mill 
and  call  for  the  lumber;  but  he  is  not  bound  to  go  more  than 
once,  nor  is  he  obliged  to  remain  for  any  length  of  time;  it  is 
sufficient  if  he  makes  a  demand  at  the  place  at  a  reasonable 
time.  5 

The  possession  of  a  promissory  note,  not  negotiable,  is  not 
prima  facie  evidence  of  a  transfer  to  the  plaintiff  before  the 
maturity  of  the  note,  or  before  the  commencement  of  the  ac- 

1  Wilmouth  v.  Patten,  2  Bibb  R.,  280. 

*  Chambers  v.  Winn,  Prin.  Dec.,  Kentucky,  192;  Mason  v.  Briggs,  16  Mass. 
R.,  453;  Durkee  v.  Marshall,  7  Wend.  R.,  312. 

3  Barns  v.  Graham,  4  Cowen  R..  452. 

4  Slingerland  v.  Morse,  8  John.  R.,  474;  7  id.  463. 

•Rice  v.  Churchill,  2  Denio  R..  145;  Higgins  v.  Emmons,  5  Conn.  R.,  76; 
Barker  v.  Jones,  8  N.  Hamp.  R.,  413.  The  promisor  must  be  ready  to  per- 
form his  contract  at  all  reasonable  hours. 


NOTES  AND  DRAFTS  NOT  NEGOTIABLE.          217 

tion ;  and  an  indorsement  thereon  made  by  the  cashier  of  the 
bank,  which  was  the  payee  of  the  note,  does  not  raise  any 
presumption  of  title  in  the  plaintiff;  the  cashier  having  no 
power  to  assign  the  paper  without  authority  from  the  board 
of  directors,  i 

Under  the  former  practice,  when  a  person  made  a  promis- 
sory note,  not  negotiable,  for  the  payment  of  a  given  sum  of 
money,  and  a  suit  was  brought  upon  it  in  the  name  of  the 
payee,  it  was  prima  facie  a  good  defence  to  shew  that  the 
note  was  made  for  the  accommodation  of  the  plaintiff;  but  if 
it  was  then  proved  on  the  part  of  the  prosecution  that  the  ac- 
tion was  in  fact  brought  for  the  benefit  of  an  assignee  of  the 
note,  and  that  it  had  been  transfered  to  him  for  value,  the 
action  was  sustained.  2 

Not  being  negotiable,  the  assignee  of  the  note  takes  it  sub- 
ject to  all  the  equities  existing  between  the  original  parties; 
this  is  the  general  rule,  3  founded  upon  the  supposed  intention 
of  the  parties  that  such  notes  are  not  made  for  circulation 
like  commercial  paper.  4  When  made  for  the  accommodation 
of  the  payee,  the  right  of  the  latter  to  transfer  it  is  necessarily 
a  part  of  the  contract;  and  it  would  be  a  destruction  of  the 
security  to  allow  the  same  defence  after  as  before  the  trans- 
fer. 5 

A  promissory  note  may  be  within  the  statute,  though  not 
drawn  in  a  negotiable  form;  and  in  such  a  case  it  is  not  ne- 
cessary for  the  payee  suing  upon  it,  to  aver  or  prove  in  the 
first  instance  the  consideration  for  which  it  was  given.  6  But 
the  indorsee  must  aver  and  prove  the  consideration  of  the 
transfer  to  him.  7  The  same  rules  of  pleading  prevail  under 

1  Barrickv.  Austin,  21  Barb.  R.,  1M1. 

*  Lee  v.  Swift,  1  Denio  R.,  665;  Rogers  v.  Morton.  12  Wend.,  484. 

*  Chamberlain  v.  Gorbam,  20  John.  R.,  144. 
4  21  Wend.,  241. 

•  Lee  v.  Swift,  supra;  Bank  of  Rutland  r.  Buck,  5  Wend.,  66. 

•  Goshen  Turnpike  Co.  v.  Hurtin,  9  John.   R.,  217;  6  Terra  R.,  123;  Ld. 
Raym.,  1545;  9  Wend.,  273;  13  id.  557.     See  'the  terms  of  the  statute.  2  R. 
8.,  62,  3d  ed. 

1  Barrickv.  Austin,  21  Barb.R.,  241. 

12 


218  BILLS   OF  EXCHANGE  AND    PROMISSORY    NOTES. 

the  code;  the  payee  of  an  instrument  given  for  the  payment 
of  money  only,  need  not  aver  the  consideration  for  which  it 
was  given;  i  though  the  assignee  or  indorsee  must  aver  and 
prove  a  valid  transfer.  2 


GUARANTY  OF  NOTES  AND  BILLS. 

The  engagement  of  the  surety  is  accessory  to  the  agreement 
of  the  principal;  and  it  is  a  general  rule  of  law,  that  what- 
ever discharges  the  contract  of  the  principal  discharges  also 
that  of  the  surety.  3  The  good  sense  and  justice  of  this  rule 
are  very  manifest.  If  the  principal  contract  be  for  the  pay- 
ment of  money,  or  for  the  performance  of  a  given  act,  and 
the  money  be  paid,  or  the  act  performed,  the  undertaking  of 
the  surety  terminates  with  the  fulfilment  of  the  agreement. 
Pothier  states  the  principle  with  great  clearness  :  "  It  results 
from  the  definition  of  a  surety's  engagement,  as  being  accessory 
to  a  principal  obligation,  that  the  extinction  of  the  principal 
obligation  necessarily  induces  that  of  the  surety,  it  being  of 
the  nature  of  an  accessory  obligation  that  it  cannot  exist  with- 
out its  principal;  therefore,  whenever  the  principal  is  dis- 
charged, in  whatever  manner  it  may  be,  not  only  by  actual 
payment  or  a  compensation,  but  also  by  a  release,  the  surety 
is  discharged  likewise;  for  the  essence  of  the  obligation  being 
that  the  surety  is  only  obliged  on  behalf  of  a  principal  debtor, 
he  therefore  is  no  longer  obliged  when  there  is  no  longer  any 
principal  debtor  for  whom  he  is  obliged.  In  like  manner  the 
surety  is  discharged  by  the  novation  of  the  debt;  for  he  can 
no  longer  be  bound  for  the  first  debt  for  which  he  was  a  surety, 
since  it  no  longer  subsists,  having  been  extinguished  by  the 
novation;  neither  can  he  be  bound  for  the  new  debt,  into 

I  6  Barb.  R.,  662;  2  Selden  R.,  209;  2  Duer,  629. 

II  Van  Santvoord's  Pleadings,  226-232.    The  indorsee  of  negotiable  paper 
proves  an  indorsement  for  value  by  proving  the  indorsement;  the  law  presumes 
the  indorsement  made  for  value. 

8  Edwards  on  Bailments,  225,  226,  234,  237,  264;  Story  on  Con.,  §  866,  868. 


GUARANTY    OF    NOTES    AND   BILLS.  219 

which  the  first  has  been  converted,  since  this  new  debt  was 
not  the  debt  to  which  he  acceded."  i 

A  person  who  guarantees  a  note  is  in  no  sense  a  party  to  the 
note :  2  his  contract  is  special  and  must  be  specially  declared 
on.  3  Accordingly,  where  it  appears  upon  the  face  of  the  in- 
strument that  one  of  the  makers  signs  as  surety,  no  recovery 
can  be  had  thereon  against  him,  without  declaring  specially 
on  the  contract.  4 

In  the  common  case  of  a  suit  against  the  makers  of  a  prom- 
issory note,  the  instrument  might,  under  the  former  prac- 
tice, be  given  in  evidence  under  the  money  counts,  for  the 
reason  that  the  note  is  evidence  of  money  lent  to,  or  had  and 
received  by  the  maker  to  the  plaintiff's  use.  But  when  one 
of  them  signs  as  surety  for  the  other,  and  that  fact  appears  on 
the  face  of  the  instrument,  the  note  furnishes  no  evidence 
that  he  received  the  whole  or  any  part  of  the  consideration. 
Indeed,  it  proves  the  contrary;  for  the  principal  debtor  must 
have  received  the  whole  consideration.  As  the  note  does  not 
prove  that  both  of  the  makers  have  received  money,  the  holder 
cannot  recover  without  declaring  on  the  contract.  5 

A  contract  of  guaranty,  though  indorsed  upon  a  negotiable 
note  and  drawn  in  general  terms  warranting  its  collection,  is 
not  of  itself  negotiable;  because  the  statute  making  promis- 
sory notes  negotiable  is  not  extended  to  any  other  instrument 
relating  to  the  note :  nor  can  such  a  guaranty  be  filled  up  on 
the  trial  with  the  name  of  the  holder  of  the  note,  as  may  be 
done  in  the  case  of  a  blank  indorsement.  6  When  a  person 

1  On  obligations  p.  2,  c.  6,  §  1,6th  Corollary;  Chitty  on  Contracts,  528;  Sneed 
v.  White,  8  J.  J.  Marsh,  627;  Brown  v.  Wright,  7  Monroe,  898;  Norton  v. 
Roberts,  4  id.  494;  Miller  v.  Stewart,  9  Wheaton,  680;  Wright  v.  Johnson,  8 
Wend.,  612. 

•  Ellis  v.  Brown,  6  Barb.  S.  C.  R.,  282;  6  Wend.,  807;  2  Hill.  190. 
1  1  Chitty  PI.,  839;  Allen  v.  Foagate,  11  How.  Pr.  Rep..  218. 

•  Butler  v.  Rawson,  1  Denio  R.,  106.     The  note  was  in  this  form  :  "  One  year 
after  date,  fur  value  received,  we  jointly  and  severally  promise  to  pay  James 
Butler,  or  bearer,  six  hundred  dollars  with  use.     Webster,  November  1,  1842. 
Wm.  Butler.     Joseph  Rawson,  turety." 

'  Per  Bronson,  Cli.  J.,  1  Denio,  100.  The  rule  is  the  same  under  the  Code, 
11  How.  Pr.  Rep.,  218. 

•  Lamourieux  v.  Hewit,  6  Wend.  R.,  807;  True  T.  Fuller,  20  Pick.  R.,  140. 


220  BILLS    Or  EXCHANGE  AND  PROMISSORY    NOTES. 

makes  a  general  guaranty  of  payment,  on  a  separate  paper, 
describing  a  note,  without  naming  any  person  as  the  party 
guaranteed,  the  party  to  whom  the  note  is  transfered  on  the 
faith  of  the  guaranty,  acquires  a  right  to  recover  on  it  in  his 
own  name;  the  guaranty  being  an  open  proposition,  made 
on  a  valuable  consideration,  to  any  person  that  might  accept 
the  same,  i  But  such  a  collateral  instrument  is  not  negotia- 
ble, and  cannot  be  transfered  so  as  to  vest  a  right  of  action  in 
a  subsequent  indorsee  of  the  note.  2 

There  is  a  class  of  cases  in  which  a  guaranty  of  payment 
indorsed  on  the  back  of  a  note,  for  a  good  consideration,  has 
been  held  equivalent  to  a  new  note;  3  and  in  these  cases  where 
the  contract  of  guaranty  contains  words  of  negotiability,  it 
has  been  treated  as  a  full  negotiable  note,  and  the  subsequent 
holder  has  been  allowed  to  maintain  an  action  thereon  in  his 
own  name.  4  Indeed,  it  has  been  asserted,  and  there  are 
cases  to  that  effect,  that  a  person  may  stand  in  the  double  re- 
lation of  an  express  guarantor  and  an  implied  indorser; 
being  treated  as  the  former  by  his  immediate  guarantee,  and 
as  the  latter  by  a  remote  transferee.  5  But  it  is  settled  in  this 
state  that  one  who  signs  a  guaranty  indorsed  upon  the  back 
of  a  note,  cannot  be  rendered  liable  as  an  indorser,  and  is  not 
entitled  to  set  up  the  want  of  demand  and  notice.  6  The  con- 
tract, such  as  the  parties  have  made  it,  must  be  enforced;  it 
cannot  be  made  by  construction  something  different  from 
what  its  language  plainly  imports.  7 

In  several  of  the  states  it  is  held  that  in  order  to  charge 
the  guarantor  of  a  note  or  bill,  it  is  necessary  that  he  should 

1  Watson's  Executors  v.  McLaren,  19  Wend.,  557 ;  S.  C.,  26  Wend.,  425. 
s  Tyler  v.  Binney,  7  Mass.  R.,  479,  and  authorities  above  cited. 
8  Ketchell  v.  Burns,  24  Wend.  R.,  456 ;  Allen  v.  Rightmere,  20  John.  R., 
365. 

4  24  Wend.  R.,  456;  2  Hill  R.,  192     Per  Bronson,  J. 

*  Upham  v.  Prince,  12  Mass.  R.,  14;  Manrow  v.  Durham,  3  Hill  R.,584,  and 
cases  there  cited. 

"Brown  v.  Curtiss,  2  Comst.  R.,  225. 
7  Curtis  v.  Brown,  2  Barb.  R.,  61;  S.C.,  2  Comst.  R.}  225. 


GUARANTY    OF    NOTES    AND   BILLS.  221 

have  notice  of  its  dishonor,  i  But  the  same  promptness  is  not 
necessary  in  making  the  demand,  and  in  giving  notice  of  non- 
payment to  the  guarantor,  as  is  required  to  charge  an  indor- 
ser.  2  The  guaranty  being  a  collateral  contract,  the  strict 
rule  requiring  notice  as  between  the  parties  to  a  bill  or  note 
does  not  apply.  3  And  in  this  state  a  guaranty  of  payment 
is  not  regarded  as  a  conditional  engagement,  and  no  notice 
is  required  for  the  purpose  of  fixing  the  liability  of  the  guar- 
antor. » 

An  adjudged  case  may  illustrate  the  principle.  An  action 
is  brought  upon  a  special  guaranty  indorsed  on  a  note  in  these 
words :  "  For  value  received,  I  sell,  assign  and  guaranty  the 
payment  of  the  within  note  to  John  Allen,  or  bearer."  By 
the  court,  Spencer,  Ch.  J. :  "It  is  the  duty  of  the  debtor  to 
seek  the  creditor,  and  pay  his  debt  on  the  very  day  it  becomes 
due.  As  regards  the  maker  of  the  note,  and  to  render  him 
liable,  no  demand  is  necessary.  A  demand  of  payment  is 
necessary  only  to  fix  an  indorser  or  a  surety  whose  underta- 
king is  conditional.  An  indorser  does  not  absolutely  engage 
to  pay.  It  is  a  conditional  undertaking  to  pay,  if  the  maker 
of  the  note  does  not,  upon  being  required  to  do  so,  when  the 
note  falls  due,  and  upon  the  further  condition  that  the  indor- 
ser shall  be  notified  of  such  default.  The  defendant  insists 
that  he  stands  in  the  situation  of  an  indorser  merely;  but 
Mu-h  is  not  the  fact.  The  undertaking  here  is  not  conditional; 
it  is  absolute,  that  the  maker  shall  pay  the  note  when  due,  or 
that  the  defendant  will  himself  pay  it."  a 

In  legal  effect  this  form  of  guaranty  is  a  new  note  for  the 
payment  of  the  money;  and  it  has  been  so  treated  by  the 

1  Foot  T.  Brown,  2  M'Lean,  869;  Lewis  v.  Brcwstcr,  id.  21 ;  Oxford  Bank  r. 
Haynes,  8  Pick.,  428;  Talbot  v.  Gray,  18  id.  684;  Carnage  T.  Hutchins,  28 
Maine  K.,  565;  Gibbs  T.  Cannon,  9  Serg.  and  R.,  198;  Isett  v.  lloge,  2  Watts, 
128;  2Comst.  R.,  228. 

•18  Pick.  R.,  634;  24  id.  250. 

1  Rhett  v.  Poe,  2  How.  U.  S.,  457. 

4  20  John.  R.,  866;  2  Corast.  R.,  225. 

1  Allen  v.  Rightmere,  20  John.  R.,  865. 


222  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

decisions  in  this  state,  i  The  obligation  is  more  perfect  than 
that  which  is  created  by  an  iiidorsment,  because  it  is  an 
unconditional  contract.  2 

When  a  third  person  is  privy  to  the  original  consideration, 
and  at  the  time  the  note  is  given  indorses  an  absolute  under- 
taking on  the  back  to  pay  it  at  maturity,  he  may  be  treated 
as  a  joint  and  several  promisor  with  the  party  who  signs  on 
the  face  of  the  note.  3  This  is  upon  the  principle  that  two 
instruments  of  the  same  general  nature,  both  executed  at  the 
same  time  and  relating  to  the  same  subject  matter,  are  to  be 
construed  together  as  forming  but  one  agreement.  As  he  who 
signs  on  the  face  and  he  who  indorses  his  name  upon  the  back, 
both  promise  to  do  the  very  same  thing,  to  wit,  to  pay  the 
money  at  the  specified  time,  it  has  been  held  that  they  may, 
without  doing  any  violence  to  the  contract,  be  regarded  as 
joint  makers.  4 

Under  the  statute  of  frauds,  every  special  promise  to  answer 

for  the  debt,  default  or  miscarriage  of  another  person,  is  void; 

unless  such  agreement,  or  some  note  or  memorandum  thereof, 

expressing  the  consideration,  be  made  in  writing  and  subscribed 

by  the  party  to  be  charged  therewith.  5 

The  application  of  this  statute,  which  is  very  plain  in  its 
terms,  has  given  rise  to  a  great  variety  of  conflicting  opinions. 
In  an  early  case  decided  in  this  state,  Chief  Justice  Kent 
specifies  three  distinct  classes  of  cases  on  the  subject,  which 
require  to  be  discriminated.  "  1 .  Cases  in  which  the  guaranty 
or  promise  is  collateral  to  the  principal  contract,  but  is  made 
at  the  same  time,  and  becomes  an  essential  ground  of  the 

1  Ketchell  v.  Burns,  24  "Wend.,  456.  The  guaranty  in  this  case  was  in  this 
form:  "  For  and  in  consideration  of  thirty-one  dollars  and  fifty  cents  received 
of  B.  F.  Spencer,  I  hereby  guarantee  the  payment  and  collection  of  the  within 
note  to  him  or  bearer." 

*  2  Comst.,  225. 

1  Hough  v.  Gray,  19  Wend.,  202;  1  Hill  R.,  256;  4  id.  420;  query  as  to  the 
effect  of  the  subsequent  decisions,  4  Selden  R.,  207. 

4  Dean  v.  Hall,  17  Wend.  R.,  214;  19  Wend.  R.,  202;  3  Hill  R.,  584. 

'  2  R.  S.,  195,  3d  ed.  These  are  the  very  words  of  the  statute,  and  they 
are  a  transcript  from  the  English  statute,  which  has  been  generally  adopted  in 
this  country. 


GUARANTY    OF    NOTES    AND    BILLS. 


223 


credit  given  to  the  principal  or  direct  debtor.  Here,  as  we 
have  already  seen,  is  not,  nor  need  be,  any  other  consideration 
than  that  moving  between  the  creditor  and  original  debtor, 

2.  Cases  in  which  the  collateral  undertaking  is  subsequent  to 
the  creation  of  the  debt,  and  was  not  the  inducement  to  it, 
though  the  subsisting  liability  is  the  ground  of  the  promise, 
without  any   distinct  and  unconnected  inducement.     Here 
must  be  some  further  consideration  shewn,  having  an  immedi- 
ate respect  to  such  liability;  for  the   consideration  for  the 
original   debt  will  not  attach  to  this  subsequent  promise,  i 

3.  A  third  class  of  cases,  is  when  the  promise  to  pay  the  debt 
of  another  arises  out  of  some  new  and  original  consideration 
of  benefit  or  harm  moving  between  the  newly  contracting 
parties."  -2 

The  case  then  under  consideration  may  be  taken  as  a  sam- 
ple of  the  first  of  these  classes.  Johnson  applied  to  Leonard 
for  the  purchase  of  a  quantity  of  goods,  on  a  credit,  and  he 
declined  to  sell  without  previous  security  for  the  payment; 
upon  which  Johnson  made  and  signed  his  promissory  note  for 
the  amount,  for  value  received;  and  Vrendenburgh,  the 
defendant  in  the  action,  wrote  and  signed  under  the  note,  "  I 
guaranty  the  above,"  and  Johnson  thereupon  delivered  the 
note  and  received  the  goods,  and  the  contract  of  guaranty  was 
held  valid.  3 

The  common  case  of  a  third  person's  promising  to  pay  a 
debt,  in  consideration  of  a  valid  agreement  to  forbear  bringing 
an  action  thereon,  will  illustrate  the  second  class  of  cases.  4 
Being  clearly  within  the  statute,  the  contract  of  guaranty  must 
be  in  writing  and  a  consideration  must  appear  upon  the  face 
of  the  instrument.  5 

1  Fisk  v.  Hutchinson,  2  Wils.,  94;  Charter  v.  Beckett,  7  Term  R.,  201;  Wain 
v.  Waiters.  5  East,  10,  are  quoted  as  samples  of  this  class. 

*  Leonard  T.  Vrendenburgh,  8  John.  R.,  29;  decided  at  May  term,  1811. 

1  Same  case:  "  The  writing  imported,  upon  the  race  of  it,  one  original  and 
entire  transaction;  for  a  guaranty  of  a  contract  implies,  ex  vi  termini,  that  it 
was  a  concurrent  act,  and  part  of  the  original  agreement." 

4  Watson  v.  Randall,  20  Wend.,  201. 

•  Wain  v.  Walters,  6  East,  10;  8  John.  R.,  210;  8  id.  87;  King  v.  Wilson,  2 
Str.,  874;  Fish  v.  Ilutchinson,  2  Wend.,  94;  Kirkham  T.  Martyr,  2  Barn,  and 
Aid.,  618;  20  Wend.,  201. 


224  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

The  third  class  of  cases,  where  the  promise  to  pay  the  debt 
of  another  arises  out  of  some  new  and  original  consideration 
of  benefit  or  harm  moving  between  the  newly  contracting 
parties,  is  not  within  the  statute;  for  wherever  the  considera- 
tion of  the  promise  takes  its  root  in  a  transaction  distinct  from 
the  original  liability,  the  case  is  not  within  the  statute,  i  The 
true  distinction  is  between  an  original  and  a  collateral  promise. 

To  support  the  promise  as  an  original  undertaking,  it  is  not 
necessary  that  the  consideration  should  move  directly  from 
the  promisee  to  the  promisor;  2  nor  that  it  should  be  expen- 
sive to  the  promisee,  it  being  a  benefit  to  the  promisor.  3  If 
it  be  a  new  and  independent  contract  it  is  valid,  though  it 
operate  to  pay  the  debt  of  another  person.  4 

Whether  the  new  promise  by  a  third  person  is  to  be  regarded 
as  an  original  or  merely  a  collateral  undertaking,  does  not 
depend  upon  the  question  whether  the  debt  remains  a  sub- 
sisting demand  against  the  original  debtor.  5  The  controlling 
question  is,  did  the  engagement  of  the  third  person  arise  out 
of  a  new  and  original  transaction  ?  It  is  immaterial  whether 
the  new  consideration  move  to  the  promisor  from  the  original 
debtor  or  from  the  promisee;  it  is  enough  that  it  be  sufficient 
to  sustain  the  new  contract.  6  A  delivery  of  property  by  the 
original  debtor  to  the  promisor,  and  a  surrender  of  property 
taken  on  execution  in  favor  of  the  promisee,  are  respectively 
good  considerations  for  a  new  promise  of  payment.  7 

In  a  late  case,  Curtis  brought  an  action  against  Brown  upon 
a  guaranty  indorsed  upon  a  promissory  note  in  these  words : 

1  Tomlinson  v.  Gill,  Ambler,  330;  Read  v.  Nash,  1  Wilson,  305;  Chapin  v. 
Merrill,  4  Wend.,  657. 

*  Farley  v.  Cleveland,  4  Cowen  R.,  432;  S.  C.,  9  Cowen,  639. 

*  Gardiner  v.  Hopkins,  5  Wend.   R.,  23.     Plff.   had  printed  a  book  for 
Wiley,  and  Wiley  had  failed  just  before  the  last  pages  were   finished,  and 
assigned  the  book  to  the  deft ;  and  the  deft,  in  order  to  get  the  last  pages, 
promised  to  pay  plff.  his  demand  for  the  whole  work.    Held  a  valid  promise. 

4  Ellwood  v.  Monk,  5  Wend..  235. 

*  4  Cowen  R.,  432;  9  id.  639;  Watson  v.  Randall,  20  Wend.,  201. 

*  Gold  v.  Phillips,  10  John.  R.,  412;  Olmstead  v.  Greenly,  18  John.  R.,  12; 
and  the  authorities  reviewed  by  Ch.  J.  Savage,  in  Farley  v.  Cleveland,  4  Cowen 
B.,  432. 

'  18  John.  R.,  12;  Mercein  v.  Andrews,  10  Wend.,  461;  5  id.  235. 


GUARANTY    OF    NOTES    AND    BILLS.  225 

"  I  guaranty  the  payment  of  the  within;"  the  plaintiff  proved 
that  the  note  was  transferee!  to  him  by  the  defendant,  in 
exchange  for  a  note  which  he  held  against  the  defendant  for 
borrowed  money,  and  that  the  transfer  and  guaranty  were 
made  a  day  or  two  after  the  note  had  been  given  by  the  maker; 
and  it  was  held  that  the  guaranty  was  valid,  being  a  distinct 
and  independent  agreement  founded  upon  a  new  considera- 
tion, i  Although  in  form  this  is  a  promise  to  answer  for  the 
debt  or  default  of  another,  in  substance  it  is  an  engagement 
to  pay  the  guarantor's  own  debt,  in  a  particular  way.  He 
does  not  undertake  as  a  mere  surety  for  the  maker,  but  on  his 
own  account,  and  for  a  consideration  which  has  its  root  in  a 
transaction  entirely  distinct  from  the  liability  of  the  maker. 
The  defendant  was  a  debtor  to  the  plaintiff,  and  gave  the  note, 
with  the  guaranty,  to  satisfy  that  debt.  This,  therefore, 
belongs  to  the  third  class  of  cases  mentioned  by  Chief  Justice 
Kent;  there  was  a  new  and  distinct  consideration  independent 
of  the  debt  of  the  maker,  and  one  moving  between  the  parties 
to  the  new  promise.  In  such  cases,  where  the  party  under- 
takes, for  his  own  benefit,  and  upon  a  full  consideration 
received  by  himself,  the  promise  is  not  within  the  statute.  J 

A  still  later  case  overrules  many  of  the  previous  decisions 
of  our  courts.  The  reporter  states  the  effect  of  the  decision  in 
these  words  :  "  A  contract  to  guaranty  the  debt  of  a  third 
person  must  be  in  writing  and  express  the  consideration  upon 
which  it  is  made,  or  it  will  be  void.  The  consideration  cannot 
be  supplied  by  parol  proof."  3  The  opinion  recognizes  the 

1  Curtis  T.  Brown,  2  Barb.  R.,  61;  S.  C.  in  the  Court  of  Appeals,  2  Corn- 
stock  R.,  226. 

*  Per  Bronson,  J..  2  Cotnst.,  229.     Mr.  Justice  Harris,  in  delivering  the 
opinion  of  the  Supreme  Court,  yields  to  the  authority  of  Manrow  v.  Durham, 
(3  Hill  R..  584,)  but  asserts  that  the  reasoning  of  the  court  is  not  entirely  sat- 
isfactory; and  in  the  Court  of  Appeals,  Justices  Jewett  and  Gardiner  were  of 
opinion  that  the  guaranty  was  within  the  statute  of  frauds,  and  therefore  void. 
But  the  decision  of  the  court  was  as  stated  in  the  text,  and  is  to  the  same 
effect  as  that  made  in  Johnson  T.  Gilbert,  4  Hill  R.,  178;  see  Durham  v.  Man- 
row,  in  2  Comst.  R.,  538. 

•  Brewster  against   Silence,  4  Selden  R.,  207.    The  action  was  upon  a 
guaranty  written  under  a  promissory  note.    The  note  and  guaranty  were  as 
follows : 


226  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

decision  in  Brown  v.  Curtis  as  good  law;  and  the  action  there 
was  on  the  guaranty,  the  consideration  was  proved  on  the  trial 
by  parol  testimony,  and  the  decision  of  the  Supreme  Court, 
which  was  sustained  on  appeal,  proceeds  upon  the  recognition 
of  cases  that  are  commented  upon  and  disapproved  in  the 
Court  of  Appeals,  i 

Under  these  decisions,  an  undertaking  to  pay  the  debt  of 
another  person,  whether  presently  contracted  on  the  faith  of 
the  guaranty  or  pre-existing,  must  be  made  in  writing,  and 
must  shew  on  its  face  a  consideration  sufficient  to  support  the 
contract.  2 

Many  of  the  earlier  cases  decided  in  this  state  were  adjudged 
under  a  statute  of  frauds  drawn  in  terms  somewhat  less  explicit 

1  Curtis  v.  Brown,  2  Barb.,  51 ;  4  Selden  R.,  210.  Mr.  Justice  Willard,  de- 
livering the  opinion  in  this  case,  says:  "  Various  efforts  have  been  made,  at 
different  times,  to  elude  the  effect  of  the  statute.  Thus,  in  Manrow  v.  Dur- 
ham, (3  Hill,  584,)  a  guaranty  was  turned  into  a  promissory  note.  In  Le- 
queer  v.  Prosser,  (1  Hill,  256,)  a  guarantor  was  converted  into  a  joint  maker 
of  a  note;  and  in  Oakley  v.  Boorman,  (21  Wend.,  588,)  a  contract  of  guaranty 
was  upheld  by  calling  it  an  indorsement,  thus  dispensing  with  the  necessity  of 
expressing  the  consideration.  Neither  of  these  grounds  can  be  taken  since 
the  cases  of  Brown  v.  Curtis,  2  Comstock,  225;  Spies  v.  Gilmore,  1  id.  321; 
and  Hall  v.  Newcomb,  7  Hill,  416."  In  Brown  v.  Curtis,  the  declaration  con- 
tained the  common  counts,  2  Comst.  R.,  553;  4  Selden,  213. 

4  20  Barb.,  298;  2  Duer  R.  497. 

$140.00.  By  the  first  of  November  next.  I  promise  to  pay  to  the  order  of 
John  Thompson,  at  the  Rochester  City  Bank,  one  hundred  and  forty  dollars, 
value  received  with  use.  Rochester.  April  18,  1848.  George  Silence. 

I  hereby  guarantee  the  payment  of  the  above  note.  F.  Silence. 

On  the  trial  the  jury  found  the  following  special  verdict  : 

1.  That  George  Silence  executed  the  note  on  the  day  it  bore  date. 

2.  That  the  defendant  signed  the  guaranty  at  the  same  time  the  note  was 
made. 

3.  That  the  consideration  of  the  note  was  a  pair  of  horses  sold  to  George 
Silence,  by  the  payee  of  the  note,  and  that  a  condition  of  the  sale  was  that  the 
note  should  be  guaranteed  by  the  defendant,  and  the  sale  was  not  consum- 
mated until  after  the   execution  of  the  guaranty. 

4  That  after  the  execution  of  the  note  and  guaranty  the  horses  were  deliv- 
ered by  the  payee,  Thompson,  to  George  Silence,  who  at  the  same  time 
delivered  the  note  and  guaranty  to  Thompson. 

6.  States  the  amount  due. 

G.  That  at  the  time  of  the  execution  of  the  guaranty,  the  defendant  declared 
that  the  horses  should  be  his  until  paid  for. 

Held  that  the  defendant,  Frederick  Silence,  was  not  liable  on  the  guaranty. 


GUARANTY    OF    NOTES    AND    BILLS.  227 

than  that  now  in  force;  i  and  the  Revised  Statutes  have  so  far 
altered  its  language  as  to  require  the  consideration  to  be 
expressed  in  the  agreement  to  answer  for  the  debt  of  another, 
and  that  it  be  subscribed  by  the  party  to  be  charged  there- 
with. 2  But  the  alteration  is  certainly  not  very  material, 
since  under  the  old  statute  the  agreement  was  required  to  be 
in  writing,  and  there  can  be  no  valid  agreement  without  a 
consideration.  3 

Our  statute,  as  it  stood  prior  to  the  adoption  of  the  Revised 
Statutes,  was  a  transcript  from  the  English  statute  of  frauds; 
and  it  declared  that  no  action  should  be  brought  to  charge  a 
defendant  on  a  special  promise  for  the  debt,  default  or  mis- 
carriage of  another,  unless  the  agreement,  or  some  memoran- 
dum or  note  thereof,  be  in  writing  and  signed  by  the  party, 
or  by  some  one  by  him  thereunto  duly  authorized.  4  From 
which  it  is  evident  that  the  change  made,  requiring  the  con- 
sideration to  be  expressed  in  the  writing,  though  not  in  sub- 
stance an  alteration  of  the  law,  was  clearly  not  intended  to 
render  it  any  the  less  strict.  5 

In  order  to  render  an  agreement  valid,  it  must  appear  to 
have  been  made  for  a  good  consideration;  for  the  considera- 
tion is  not  an  incident,  but  a  necessary  and  constituent  part 
of  every  legal  agreement.  And  therefore,  when  a  statute 
requires  that  agreements  of  a  particular  kind  shall  be  made 
in  writing,  it  must  be  intended  that  the  legislature  used  the 
terms  employed  by  them  in  their  ordinary  and  settled  mean- 
ing. Acting  upon  this  principle  of  construction,  the  English 
courts  did  not  hesitate  to  require  that  the  contract,  both  the 
consideration  and  the  promise,  should  be  in  writing.  6  There 
was  indeed,  for  a  time,  much  controversy  on  the  subject;  but 
it  became  at  length  a  recognized  and  settled  doctrine,  that  the 

'IB.L.,78,1 11. 

*2R.  S.,  195,§  2,8dcd. 

*  Seats  v.  Brink,  8  John.  R.,  210,  holds  that  the  consideration  must  be  in 
writing. 

4  De  Wolf  T.  Rabaud,  1  Peters'  S.  C.  R.,  476. 
•2R.  S.,  195,  3ded;  3  Kent's  Com.,  1^1. 

•  Wain  v.  Warltcrs.  6  East  R.,  10. 


228  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

consideration  must  appear  upon  the  face  of  the  instrument,  in 
such  a  manner  that  the  court  may  be  able  to  judge  of  its  suf- 
ficiency ;  i  and  parol  proof  is  not  admissible  to  supply  a 
defect  in  this  particular.  2 

The  American  authorities  shew  various  departures  from 
the  doctrine  held  in  England.  In  this  state  the  courts  have 
lately  shewn  a  disposition  to  give  the  statute  a  plain  and  strict 
Interpretation;  while  in  others  there  is  a  tendency  to  modify 
and  explain  it  away,  so  as  to  make  it  nearly  a  dead  letter.  3 
In  some  of  the  states  the  language  of  the  statute  requires 
simply  that  the  promise  or  agreement  should  be  in  writing; 
and  in  these  the  construction  has  been  with  good  reason  much 
less  strict.  4  In  truth,  the  main  difficulty  in  the  application 
of  the  statute,  is  one  of  construction;  and  the  import  of  the 
word  agreement,  as  used  in  the  law,  is  the  true  subject  of 
inquiry.  Understood  in  a  popular  sense,  as  not  necessarily 
including  all  the  requisites  of  a  binding  contract,  and  the 
original  statute  bears  the  interpretation  put  upon  it  by  Chief 
Justice  Parker;  and  there  is  some  force  in  his  suggestion  that 
the  legislature  probably  did  not  search  any  law  dictionaries 
to  ascertain  the  meaning  of  that  term,  as  has  been  done  since, 
in  order  to  complete  the  work  of  construing  the  act.  "  Some- 
times the  sense  of  an  instrument  or  statute  is  lost  by  looking 
too  deep  for  it;  as  men  have  been  known  to  impoverish  them- 
selves by  digging  into  the  bowels  of  the  earth  for  riches, 
which  they  would  have  obtained  with  less  labor  by  working 
upon  its  surface.  Not  that  I  am  disposed  to  treat  with  dis- 
respect the  labors  and  researches  of  patient  and  learned 
jurists,  in  ancient  or  modern  times.  Certainly  the  science  of 
the  law  requires  such  investigations,  but,  as  in  other  sciences, 
the  object  of  pursuit  has  been  sometimes  lost  by  reason  of  its 

I  Saiinders  v.  Wakefield,  4  Barn,  and  Aid.,  595;  Jenkins  v.   Reynolds,  3 
Brod.  and  Bing.,  14. 

II  Morley  v.  Boothby,  3  Bing.  R.,  107;  Newbury  v.   Armstrong,  6  Bing.  R., 
201;  Allnutt  v.  Ashhenden,  5  Mann,  and  Grang.,  392. 

3  Packard  v.  Richardson,  17  Ma&s.  R.,  122,  and  cases  there  cited. 

4  5  Cranch.  R.,  151,  152;  Taylor  v.  Ross,  3  Yerger,  330. 


GUARANTY    OF    NOTES    AND    BILLS.  229 

being  thought  at  a  distance,  when  all  the  time  it  has  been 
near."  i 

The  usual  guaranty  is  unquestionably  an  agreement,  not 
under  seal,  "  whereby  one  person  engages  to  be  answerable 
for  the  debt,  default  or  miscarriage  of  another."  It  is  not  a 
direct  engagement  to  pay  one's  own  debt,  or  to  perform  an 
obligation  resting  primarily  on  the  guarantor,  for  it  assumes 
the  liability  of  another  as  principal,  and  for  whom  the  guar- 
antor becomes  surety.  The  engagement  is  in  aid  of,  and  col- 
lateral to  the  original  liability  of  the  principal  debtor  or  party 
for  whom  the  guaranty  is  given.  2 

When  the  undertaking,  though  drawn  in  the  form  of  a 
guaranty,  is  in  substance  an  original  promise  for  a  valuable 
consideration  expressed  upon  the  face  of  the  instrument,  it 
has  been  repeatedly  held  that  a  recovery  may  be  had  on  it 
against  the  guarantor  as  in  legal  effect  a  maker  of  the  note.  3 
In  truth,  such  a  contract  is  not  that  of  a  maker  of  a  note,  nor 
that  of  a  guarantor;  it  is  an  undertaking  distinguishable  from 
either.  -i  And  it  is  conceded  that  where  the  undertaking  is 
not  within  the  statute  of  frauds,  as  where  the  holder  and 
payee  of  a  note  made  by  a  third  person  guarantees  its  payment 
and  delivers  it  to  his  creditor  in  discharge  of  his  own  previous 
debt,  a  recovery  may  be  had  upon  the  guaranty,  notwith- 
standing it  contains  no  words  importing  a  consideration  for  the 
promise;  and  in  this  case,  parol  evidence  may  be  given  of  the 
consideration.  5 

Peter  Farmer  made  a  promissory  note  for  two  hundred  and 
fifty  dollars,  payable  to  Samuel  Hall,  the  plaintiff,  or  his 

1 17  Mass.  R.,  137.  Is  it  not  quite  as  safe  and  reasonable  to  assume  that 
the  law  maker  had  a  competent  knowledge  of  the  law  that  he  undertook  to 
amend,  and  that  he  used  the  terms  of  the  science  in  the  sense  which  they  com- 
monly bear  ?  The  legal  meaning  of^the  word  agreement  is  well  ascertained 
and  flxcd;  but  what  is  the  popular  meaning  of  the  term  f 

*  Hall  v.  Farmer,  6  Denio  R.,  487. 

1  Hunt  v.  Adams.  6  Mass.  R.,  858;  White  v.  Howland,  9  Mass.  R.,814; 
Hough  v.  Gray,  19  Wend.,  202;  Dean  v.  Hall,  17  Wend.  R.,  214;  Lequeer  v. 
Prosser,  1  Hill  R.,  266;  S.  C  ,  4  Hill  R.,  420. 

4  2  Comst.,  225,  568;  4  Selden  R.,  207. 

•  Idem;  8  John.  R.,  28;  Durham  v.  Manrow,  2  Comst.,  533;  Hall  v.  Far- 
num,  id  ,  553. 


230  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

order,  on  demand,  with  interest;  on  the  back  of  which  note 
Newcomb,  the  defendant,  indorsed  his  name  in  blank,  at  the 
request  of  the  maker,  to  enable  him  to  get  the  money  on  the 
note.  And  the  question  arose  whether  Newcomb,  who  might 
have  been  charged  on  the  note  as  an  indorser,  could  be  ren- 
dered liable  thereon  as  a  maker  or  as  guarantor  of  its  payment, 
it  appearing  that  he  wrote  his  name  on  the  note  to  enable  the 
maker  to  obtain  the  money  on  it  from  the  payee  1  And  it  was 
adjudged  that  he  could  not  be  charged  as  a  guarantor  or 
maker,  but  only  as  an  indorser  of  the  note,  i 

A  different  rule  prevails  in  some  of  the  states;  and  it  is  a 
general  principle  that  every  contract  ought  to  be  carried  into 
effect  according  to  the  intention  of  the  parties.  2  There  is, 
however,  a  manifest  distinction  between  those  cases  in  which 
the  party  has  made  a  valid  and  explicit  contract,  as  where  a 
person  writes  his  name  on  the  back  of  a  negotiable  note,  and 
that  class  of  cases  where  the  contract  cannot  be  carried  into 
effect  as  an  indorsement,  according  to  mercantile  usage,  as 
where  a  person  indorses  his  name  on  the  back  of  a  note  that 
is  not  negotiable.  In  respect  to  the  former,  the  contract  is  to 
be  enforced  according  to  its  legal  effect,  under  principles  that 
are  well  established  and  presumed  to  be  within  the  knowledge 
of  the  parties;  while  in  respect  to  the  latter,  courts  endeavor 
to  prevent  the  utter  failure  of  the  contract,  by  giving  it  effect 
in  some  other  way,  as  by  allowing  the  holder  to  overwrite  the 
indorser's  name  with  the  real  contract  implied  by  law,  or 
recover  against  him  as  a  maker  or  guarantor  of  the  note.  3 
But  where  the  engagement  is  within  the  statute  of  frauds, 
being  an  undertaking  to  answer  for  the  debt  or  default  of  a 

'Hallv.  Newcomb,  3  Hill  R.,  233;  S.  C.,  7  Hill  R.,  416.  The  case  was 
twice  argued  in  the  Court  of  Errors.  See  also  Ellis  v.  Brown,  6  Barb.,  282; 
Spies  v.  Gilrnore,  1  Comst.  R.,  321;  Cottrell  v.  Conklin,  4  Duer,  45. 

2  Baker  v.  Briggs,  8  Pick.,  122;  4  id.  385;  24  id.  64;  Flint  v.  Day,  9  Verm. 
R.,  345;  12  id.  219;  Sandford  v.  Norton,  14  id   228;  Beckwith  v.  Angel,  6 
Conn.  R.,  816. 

3  Dean  v.  Hall,  17  Wend.,  214;  5.  Mass.,  358;  9  id.  315;  3  id.  274;  Griswold 
v.  Slocum,  10  Barb.  R.,  402;  Cottrell  v.  Conklin,  4  Duer.  45. 


GUARANTY    OF    NOTES    AND    BILLS.  231 

third  person,  it  is  not  clear  that  such  a  contract  of  guaranty 
can  be  supplied  by  law  or  enforced  in  this  state,  i 

When  a  note  is  made  payable  to  a  particular  person  or 
bearer,  and  indorsed  by  a  third  person,  and  then  delivered  to 
the  payee,  the  latter  may  recover  thereon  against  such  third 
person  as  an  indorser;  he  does  not  stand  in  the  position  of  a 
maker  of  the  note.  2  There  being  nothing  to  prevent  charg- 
ing him  as  an  indorser,  he  is  liable  in  that  capacity  and  no 
other. 

The  payee  of  a  negotiable  note  offers  it  in  payment  on  the 
purchase  of  a  horse,  and  the  vendor  refuses  to  take  it  unless 
the  payee  indorses  it  or  guaranties  the  payment;  and  he  there- 
upon signs  his  name  under  that  of  the  maker  and  delivers  it, 
and  it  is  adjudged  that  he  thereby  becomes  liable  as  a  joint 
maker  of  the  note.  3 

Where  the  owner  and  holder  of  a  promissory  note  sells  the 
same,  and  as  a  condition  of  the  sale  guarantees  its  payment, 
his  contract  of  guaranty  is  an  original  undertaking;  and 
would  be  valid  though  not  in  writing.  4  For  this  is  a  new 
contract  not  within  the  statute,  and  is  supported  by  a  con- 
sideration which  is  recognized  as  sufficient  at  common  law. 
It  is  as  much  an  original  undertaking  as  is  a  contract  of 
warranty  made  on  the  sale  of  a  horse,  or  any  other  chattel.  5 

The  statute  of  frauds  does  not  -apply  to  such  cases,  because 
the  contract  is  not  in  the  nature  of  an  ordinary  guaranty : 

1  7  Hill  R.,  416;  1  Comst.,  321;  2  id.  225;  4  Selden  R.,  207.  The  statute  of 
frauds  has  been  the  source  of  infinite  litigation,  and  the  decisions  of  the  highest 
court  are  not  always  perfectly  harmonious.  See  Brown  v.  Curtis,  2  Comst.. 
225;  Durham  v.  Manson,  id.  533;  Hall  v.  Farmer,  id.,  553;  Brewster  v. 
Silence,  4  Selden  R.,  207. 

'  Dean  v.  Hall,  supra;  Seabury  v.  Hungerford.  2  Hill  R.,  80.  In  this  case 
the  defendant  added  to  his  indorsement  the  word  "  backer,"  without  limiting 
or  qualifying  his  liability. 

»  Patridge  v.  Colby.  19  Barb.  R.,  248. 

4  Meech  v.  Smith,  7  Wend.  R..  815;  How  v.  Kemble,  2  M'Lean,  103;  8  Hill 
R.,  684. 

*  Per  Bronson,  2  Comst.,  225.  A  consideration,  to  be  sufficient  at  common 
law,  must  be  either  a  benefit  to  the  party  promising,  or  some  trouble  or  preju- 
dice to  the  party  to  whom  the  promise  is  made.  1  Comyn  on  Contr.,  18. 


232  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

nor  does  it  apply  to  the  case  of  a  covenant,  or  a  promise  under 
seal  to  pay  the  debt  of  a  third  person,  i 

In  order  to  bring  the  contract  within  the  statute  of  frauds, 
the  undertaking  must  be  collateral  to  and  in  aid  of  the  promise 
of  another.  2  If  the  original  debt  be  discharged  or  merged  in 
the  new  contract,  the  new  becomes  an  original  undertaking.  3 
So,  where  a  person  promises  to  pay  the  debt  of  another  in 
consideration  of  funds  placed  in  his  hands  for  that  purpose  by 
the  debtor,  the  undertaking  is  original  and  need  not  be  in 
writing.  4  And  in  general,  where  there  is  a  new  contract 
based  on  a  new  and  sufficient  consideration,  it  will  not  be 
defeated  or  rendered  invalid  merely  because  it  operates  inci- 
dentally to  secure  the  payment  of  another  person's  debt,  and 
is  not  in  writing.  5 

When  a  guaranty  or.  promise  to  pay  the  debt  of  a  third 
person  is  within  the  statute,  and  it  is  necessary  that  the  con- 

1  Livingston  v.  Tremper,  4  John.  R.,  16.  "  The  meaning  of  a  guaranty  is 
an  undertaking  to  pay  the  debt  of  another,  in  case  he  does  not."  Dole  v. 
Young,  24  Pick.,  250. 

a  Wainwright  v.  Straw,  15  Verm.,  215. 

3  Anderson  v.  Davis,  9  id.  136. 

4  Hilton  v.  Dinsmore,  8  Shep  ,  410. 

6  Allen  v.  Thompson,  ION.  Hamp.,  32.  This  case  holds  that  though  de- 
signed to  secure  the  debt  of  another,  the  contract  is  valid. 

The  English  statute  of  frauds  has  been,  as  we  have  seen,  generally  adopted 
in  this  country,  but  it  has  been  modified  more  or  less  in  its  terms  in  all  the 
states;  and  this  has  led  to  great  diversity  in  the  authorities.  In  many  of 
them,  as  in  this  state,  the  statute  remains  substantially  unchanged,  while  the 
decisions  under  it  have  not  always  followed  those  of  England;  in  others,  the 
terms  of  the  statute  have  been  changed,  and  there  is  no  propriety  in  consulting 
foreign  authorities  in  the  work  of  interpretation.  Under  these  circumstances 
it  is  not  deemed  important  to  collate  in  this  connection  the  decisions  of  the 
several  states  respecting  the  contract  of  guaranty.  The  following  relate  to 
promissory  notes  :  Hodgkins  v.  Bond,  1  N.  Hamp  ,  284;  Nelson  v.  Boynton, 
3  Met.,  396;  Peabody  v.  Harvey,  4  Conn.,  119.  124;  2  M'Cord  208;  Gunnels 
v.  Steward,  3  Brevard.  52;  Taylor  v.  Ross,  3  Yerger,  330;  Josselyn  v.  Ames, 
8  Mass.  R.,  274;  Ulen  v.  Kittredge,  7  Mass.  R.,  232;  Oxford  Bank  v.  Haynes, 
8  Pick.  R.,  423;  Beckwith  v.  Angell,  6  Conn.  R.,  315;  Douglass  v.  Howland, 
24  Wend.,  35;  Hunt  v.  Adams,  5  Mass.  R.,  358;  White  v.  Howland,  9  Mass. 
R.  314;  Allen  v.  Rightmere,  20  John.  R.,  365;  Palmer  v.  Grant,  4  Conn.  R., 
389;  Hunt  v.  Brown,  5  Hill  R.,  145;  Ringgold  v.  Newkirk,  3  Pike,  96;  Ware, 
v.  Adams,  11  Shep.  177;  Manrow  v.  Durham,  3  Hill  R.,  584;  Russell  v.  Birch, 
11  Verm.,  166,  265;  14  id.  147;  Coburn  v.  Tolles,  14  Conn.,  341;  M'Doal  v. 
Yeomans,  8  Watts,  861.  The  late  cases  in  this  state  have  been  cited  above. 


GUARANTY    OF    BILLS    AND    NOTES.  233 

sideration  of  the  undertaking  should  appear  upon  the  face  of 
the  instrument,  it  is  sufficient  if  a  consideration  may  be  fairly 
implied  from  the  terms  of  the  guaranty,  i  It  cannot  be  infer- 
red from  circumstances;  it  must  be  expressed  in  some  form.  2 
If  drawn  in  this  form,  "  for  value  received  I  guaranty  the 
payment  of  the  within  note,"  it  is  valid,  and  is  an  uncondi- 
tional engagement  for  the  payment  of  the  note.  3 

The  same  rule  applies  where  the  guaranty  is  written  upon 
a  separate  piece  of  paper,  describing  the  note;  for  the  char- 
acter of  the  contract  is  the  same,  whether  it  be  written  under 
the  note,  on  the  back  of  it,  or  in  a  separate  instrument.  4  If 
the  agreement  be  really  and  in  substance  one  of  guaranty,  it 
must  be  supported  by  a  sufficient  consideration.  5  If  it  be 
equivalent  to  a  new  note,  though  in  the  form  of  a  guaranty, 
it  needs  no  consideration  to  be  expressed  on  its  face  in  order  to 
render  it  obligatory;  that  is  to  say,  it  will  be  valid  where  the 
guarantor  undertakes  for  his  own  benefit,  and  upon  a  full 
consideration  received  by  himself,  his  undertaking  not  being 
within  the  statute.  6  Strictly  speaking,  such  a  contract  is 
neither  a  guaranty  nor  a  promissory  note,  but  a  distinct  and 
original  undertaking  for  the  payment  of  a  certain  sum  of 
money;  an  engagement  to  pay  his  own  debt. 

An  absolute  guaranty  of  payment  made  on  a  good  consid- 
eration, indorsed  on  the  back  of  a  note,  is  as  we  have  said,  an 
engagement  that  the  maker  shall  pay  it  at  maturity,  and  that 
if  it  is  not  so  paid  the  guarantor  will  himself  pay  it.  7  In 
effect  this  contract  does  not  differ  from  an  instrument  drawn 

1  Stadt  T.  Sill,  9  East,  348. 

•  Smith  v.  Ives,  15  Wend.,  182. 

»  20  John.  R..  365;  2  Hill  R.,  188. 

4  Watson's  Executors  v.  McLaren,  19  Wend.  R.,  657;  S.  C.,  26  id.  425 ; 
Wend.  v.Clark,  4  Sand.  R..  81. 

•  4  Selden  R.,  '207;  4  Sand.  R.,  81. 

•  Johnson  v.  Gilbert,  4  Hill  R.,  178;  2  Comst.,  229.    In  this  case  the  written 
guaranty  shewed  no  consideration  for  the  promise;  but  the  facts  proved 
shewed  an  original  undertaking,  and  the  court  denied  that  the  guaranty  could 
be  treated  as  a  note. 

1  20  John.  R.,  865. 

13 


234  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

in  this  form,  "  for  value  received  I  promise  to  pay  T.  M.,  fifty 
pounds,  if  my  brother  does  not  pay  it,  within  six  weeks;" 
which  is  not  a  promissory  note,  i  But  an  undertaking  in- 
dorsed on  a  promissory  note,  at  the  time  it  was  made,  in  these 
words,  "  for  value  received,  we  jointly  and  severally  under- 
take to  pay  the  money  within  mentioned  to  the  said  B,"  the 
payee,  has  been  held  to  render  the  guarantors  liable  as  joint 
and  several  promissors  with  the  maker  of  the  note.  2  Whether 
regarded  as  an  original  or  collateral  agreement,  the  underta- 
king here  is  to  pay  the  amount  of  the  note  to  the  payee,  and 
it  is  an  absolute  contract. 

A  guaranty  of  collection  is  a  very  different  contract  from  a 
guaranty  of  payment;  the  latter  being  a  contract  that  the 
money  shall  be  paid  at  maturity,  while  the  former  is  in  sub- 
stance a  warranty  that  it  is  collectable.  3  Thus,  where  the 
guarantor  in  consideration  of  a  sale  of  goods  to  the  maker  of 
the  note,  "  undertook  and  faithfully  promised  that  the  note  was 
good  and  collectable  after  due  course  of  law,"  it  was  held 
that  he  was  not  liable,  unless  the  note  turned  out  not  to  be 
good  or  collectable,  after  a  regular  prosecution  against  the 
maker  and  indorsers,  with  due  and  reasonable  diligence;  that 
the  use  of  diligence  in  attempting  to  collect  the  note  by  due 
course  of  law  was  a  condition  precedent,  to  be  performed  by 
the  plaintiff;  and  that  a  neglect  for  the  space  of  seventeen 
months  to  proceed  against  the  maker  of  the  note  operated  as 
a  discharge  of  the  guarantor.  4  So,  where  a  party  "  guaran- 
teed the  collection  of  the  note,"  it  was  adjudged  that  the  guar- 
anty was  equivalent  to  an  undertaking  that  the  note  was  col- 

1  Appleby  v.  Biddulph,  8  Mod..  363. 

•  White  v.  Howland,  9  Mass.  R.,  314;  5  id.  545;  8  Pick.,  122. 

8  Moakley  v.  Riggs,  19  John.  R.,  69;  20  id.  365;  Taylor  v.  Bullen,  6  Cowen, 
624;  Thomas  v.  Woods,  4  Cowen  R.,  173;  Cumston  v.  McNair,  1  Wend.,  457; 
White  v.  Case,  13  id.  543;  Curtis  v.  Smallman,  14  id.  231;  Eddy  v.  Stanton, 
21  id.  255;  Lovelandv.  Shepard,  2  Hill,  139j  Burt  v.  Homer,  5  Barb.  R., 
501 ;  6  id.  547. 

4  19  John.  R.,  69.  In  consequence  of  the  delay  in  this  case,  the  maker  had 
obtained  his  discharge  under  the  insolvent  law. 


GUARANTY    OF    BILLS    AND    NOTES.  235 

lectable  by  due  course  of  law,  and  that  the  plaintiff'  was 
bound  to  prosecute  all  the  parties  to  the  note  with  due  legal 
diligence,  before  he  could  resort  to  the  guarantor,  i 

Where  this  guaranty  was  written  on  the  back  of  an  indorsed 
note,  "  for  a  valuable  consideration  I  guaranty  the  collection 
of  the  within  note,"  it  was  decided  in  an  action  on  the  guar- 
anty that  the  plaintiff  must  shew  a  diligent  attempt  to  collect, 
both  as  against  the  indorser  and  maker,  or  he  could  not 
recover.  2  The  transfer  of  such  an  instrument  would  carry 
the  indorsement  as  an  incident,  and  a  release  of  the  maker 
would  discharge  the  indorser;  and  so  the  guaranty  of  the  col- 
Irrtion  of  the  instrument  has  reference  to  it  as  an  indorsed 
note.  3 

"  I  warrant  this  note  good,"  indorsed  by  the  payee  upon  a 
note,  means  that  it  is  collectable,  that  the  maker  is  responsible; 
it  is  not  an  engagement  that  the  note  will  be  promptly  paid 
at  maturity;  and  it  is,  therefore,  incumbent  upon  the  holder 
of  such  a  note  and  guaranty,  in  order  to  charge  the  guarantor, 
to  prove  by  legal  evidence  that  the  maker  was  not  responsible 
and  that  payment  of  the  note  could  not  be  enforced  from  him.  4 
And  the  proper  evidence  that  the  note  was  not  good  is  fur- 
nished by  shewing  the  failure  to  collect  on  a  diligent  prose- 
cution. 

The  terms  of  the  guaranty  must  be  complied  with  before 
the  guarantors  can  be  rendered  liable  on  the  contract.  The 
defendants  being  the  payees  and  holders  of  a  negotiable  note, 
sold  and  transfered  it  to  the  plaintiffs,  and  agreed  that  they 
would  repay  them  the  amount  thereof  with  interest  and  costs 
in  case  they  could  not  set  off  the  note  in  payment  of  a  balance 
due  from  them  to  the  maker  on  settlement,  or  collect  the  same 

1  Cumpston  T.  McNair,  1  Wend.  R.,  467. 
*  Loveland  v.  Shepard,  2  Hal  R.,  139. 

1  Moaklcy  T.  Riggs,  19  John.  R.,  69.  In  this  cose  the  indorser  alone  was 
sued;  in  Loveland  v.  Shepard,  the  maker  alone  was  sued.  Held  in  both  cases 
the  plaintiff  must  shew  a  diligent  prosecution  against  all  the  parties  to  the 
note. 

4  Curtis  v.  Smallman,  14  Wend.  R.,  281;  Cooke  v.  Nathan,  16  Barb.  R., 
342. 


236  BILLS  OF   EXCHANGE  AND    PROMISSORY   NOTES 

in  some  other  way  or  by  due  course  of  law ;  and  it  was  held 
that  the  defendants  could  not  be  made  liable  until  the  three 
conditions  precedent  were  shewn  to  have  been  fulfilled, 
namely;  that  they  could  not  use  the  note  as  a  set  off,  nor  col- 
lect it  in  some  other  way,  nor  by  due  course  of  law.  i  The 
insolvency  of  the  maker  of  the  note  is  no  excuse  for  a  neglect 
to  attempt  a  collection  in  the  usual  way. 

The  question  of  due  diligence  is  to  be  decided  in  view  of 
all  the  facts  and  circumstances.  The  defendant  assigned  to 
the  plaintiff  a  bond  and  mortgage  against  a  third  person;  and 
covenanted  that  in  case  the  plaintiff  should  not  be  able  to 
procure  or  enforce  payment,  at  the  time  and  in  the  manner 
therein  specified,  by  due  process  of  law,  the  defendant  would 
be  accountable  to  him  for  such  sum  or  sums  of  money  as 
should  remain  due;  and  it  was  decided  in  an  action  on  the 
covenant  that  the  plaintiff  was  bound  to  proceed  with  dili- 
gence, such  as  a  prudent  man  would  use  in  conducting  his 
affairs  with  skill  and  judgment,  to  enforce  the  payments  as 
they  became  payable,  by  due  process  of  law;  but  that  a  brief 
delay,  such  as  suffering  a  term  to  elapse  before  suit  after  a 
payment  became  due,  was  not  of  itself  evidence  of  neglect  or 
want  of  due  diligence.  2 

In  construing  a  guaranty  of  collection,  reference  must  be 
had  to  the  subject  matter  of  the  contract,  and  the  situation  or 
condition  of  the  maker  of  the  note.  Thus,  where  the 
guaranty  was  in  these  words,  "  value  received,  I  hereby  guar- 
antee the  collection  of  the  within  note,"  and  it  was  shewn 
that  the  maker  of  it  left  or  removed  from  the  state  before  the 
note  became  due,  it  was  thought  that  by  a  true  construction, 
the  contract  implied  not  only  that  the  note  was  collectable 
against  the  maker,  but  that  he  would  be  in  a  situation  to  be 
sued  within  the  jurisdiction  of  the  state  within  which  the 
contract  was  made;  so  that  where  legal  proceedings  by  attach- 

1  Eddy  v.  Stanton,  21  Wend.  R.,  225;  Taylor  v.  Otis  &  Brown.  6  Cowen  R., 
624. 

"  Thomas  v.  "Woods,  4  Cowen  R.,  173;  Kies  v.  Tift,  1  Cowen  R.,  98.  No 
delay  will  be  tolerated  detrimental  to  the  guarrantor.  1  Caines.  427. 


GUARANTY   OF   BILLS   AND   NOTES.  237 

ment  or  otherwise  cannot  be  taken  in  consequence  of  such 
removal,  a  recovery  may  still  be  had  on  the  guaranty,  i 

But  if  the  maker  of  the  note  resides  in  a  foreign  state  or 
country  at  the  time  the  contract  of  guaranty  is  entered  into, 
hi*  non-residence  will  not  vary  the  construction  of  the  agree- 
ment, nor  excuse  the  neglect  to  institute  legal  proceedings 
against  the  maker  for  the  collection  of  the  note.  Thus, 
where  one  guarantees  the  collection  of  a  note  made  by  a  person 
residing  in  Canada,  the  presumption  is  that  the  parties  contract 
with  reference  to  the  circumstances  as  they  exist;  and  it 
would  be  doing  violence  to  the  terms  of  the  guaranty  to  hold 
it  to  imply  that  the  maker  of  the  note  should  change  his 
place  of  residence  and  remove  to  that  of  the  guarantee.  2 
There  is  a  perfect  analogy  between  the  principle  here  laid 
down  and  that  applicable  to  the  contract  of  indorsement :  if 
the  maker  of  a  note  not  payable  at  a  particular  place,  removes 
from  the  state  after  it  is  made  and  before  it  matures,  the  holder 
is  not  bound,  for  the  purpose  of  charging  the  indorser,  to  demand 
payment  of  the  maker  personally;  it  is  sufficient  if  a  demand 
is  made  at  his  last  place  of  residence  in  this  state.  3  But 
where  the  maker  resides  out  of  the  state  when  the  note  is 
made,  the  demand  must  be  made  at  his  residence.  4 

A  guaranty  that  a  note  is  collectable  is  a  conditional  prom- 
ise, binding  upon  the  guarantor  only  in  case  of  diligence.  In 
order  to  perfect  the  obligation  so  as  to  render  him  liable 
thereon,  the  guarantee  must  use  diligence  in  the  endeavor  to 
collect  the  note;  for  this  is  a  conditioned  precedent.  5  In 
other  words,  the  obligation  which  is  imperfect  and  inchoate, 
does  not  become  absolute  until  the  guarantee  has  performed 
the  condition  of  the  contract  on  his  part;  and  it  seems  that  if 
he  fails  to  perform  the  condition  precedent,  so  that  in  fact  no 
obligation  ever  accrues  and  becomes  perfect  against  the  guar- 

1  White  T.  Case,  13  Wend.,  543.  The  same  baa  been  more  distinctly  held 
in  Cooke  v.  Nathan,  16  Barb.  R.,  342. 

•  Burt  v.  Homer,  6  Barb.  S.  C.  R.,  501. 

•  Gumming  v.  Fisher,  Anthon's  N.  P.,  1  j  14  John.  R.,  117. 

4  Gilmore  v.  Spies,  1  Barb.  R.,  158;  S.  C.,  1  Comst.  R.,  821. 

•  2  Hill  R.,  139;  13  Wend.  R.,  543;  14  id.  281;  19  John.  R.,  69. 


238  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

antor,  even  a  subsequent  and  express  promise  to  pay  will  not 
render  him  liable  thereon,  i  Such  a  promise  is  not  like  a 
waiver  of  a  forfeiture  or  of  laches;  it  is  a  new  undertaking, 
and  being  without  any  consideration,  it  is  void  under  the  rule 
laid  down  by  Lord  Denman;  "that  an  express  promise  can 
only  revive  a  preceding  good  consideration  which  might  have 
been  enforced  at  law  through  the  medium  of  an  implied 
promise,  had  it  not  been  suspended  by  some  positive  rule  of 
law;  but  can  give  no  original  cause  of  action  if  the  obligation 
on  which  it  is  founded  never  could  have  been  enforced  at  law, 
though  not  barred  by  any  legal  maxim  or  statute  provision."  2 

Where  the  undertaking  of  the  guarantor  is  to  pay  a  certain 
sum  in  a  certain  event,  on  request,  the  request  is  parcel  of  the 
contract  and  must  be  specially  alleged  and  proved.  3  So,  if 
a  bond  be  conditioned  that  another  shall  pay  on  demand,  the 
demand  is  thereby  made  an  essential  part  of  the  covenant.  4 

The  terms  of  a  guaranty  must  be  strictly  complied  with, 
or  the  guarantor  will  not  be  bound.  If  he  proposes  a  credit, 
that  particular  credit  must  be  given  to  the  principal.  ft  But 
where  the  guarantor  proposes  a  credit  of  three  months, 
the  taking  of  a  note  at  three  months  from  the  purchaser, 
which  gives  three  additional  days  of  grace,  is  a  substantial 
compliance  with  the  terms  of  the  guaranty.  Like  other  com- 
mercial contracts,  guaranties  are  to  be  construed  with  refer- 
ence to  the  usages  of  trade.  6 

An  authority  to  draw  at  ninety  days  from  time  to  time,  is 
limited  to  bills  payable  ninety  days  after  sight,  and  does  not 
authorize  one  drawn  payable  ninety  days  after  date.  7  Such 
an  authority  is  a  promise  to  accept,  and  under  our  statute  "  an 

1  Vanderveer  v.  Wright,  6  Barb.  R.,  647. 

1  Eastwood  v.  Kenyon,  11  A.  and  E.,  438;  Wennall  v.  Adney,  3  Bos.  and 
Pull.,  249. 

*  Nelson  v.  Bostwick.  5  Hill  R.,  39,  143,  and  cases  there  cited. 

4  Douglass  v.  Rathbone,  5  Hill  R..  143. 

5  Walrath  v.  Thompson,  6  Hill,  540.     The  credit  given  in  this  case  was  a 
week  less  than  that  proposed,  and  it  was  held  that  the  guarantor  was  not  liable. 

*  Smith  v.  Dann,  6  Hill  R.,  643. 

*  The  Ulster  County  Bank  v.  McFarlan,  3  Denio,  558. 


GUARANTY   OF    BILLS    AMD   NOTES.  239 

unconditional  promise  in  writing  to  accept  a  bill  before  it  is 
drawn,  is  deemed  an  actual  acceptance  in  favor  of  every  per- 
son who,  upon  the  faith  thereof  shall  have  received  the  bill 
for  a  valuable  consideration."  i  But  the  bill  or  bills  autho- 
rized to  be  drawn,  must  be  described  in  terms  not  to  be  mis- 
taken; and  the  bills  drawn  must  come  within  the  terms  of 
the  authority.  2 

Letters  of  credit  are  divided  into  two  classes,  general  and 
special.  They  are  general  when  addressed  to  any  and  all 
persons  without  naming  any  in  particular.  They  are  special, 
when  addressed  to  a  particular  individual  or  firm  by  name. 
When  addressed  to  all  persons,  a  letter  is  in  effect  a  request 
made  to  any  person  to  whom  it  may  be  presented,  and  any 
individual  may  accept  and  act  upon  the  proposition  contained 
in  it,  and  when  he  does  so,  that  which  before  was  indefinite 
and  at  large,  becomes  definite  and  fixed;  a  contract  imme- 
diately springs  up  between  the  person  making  the  advance 
and  the  writer  of  the  letter,  and  it  is  thenceforward  the  same 
thing  in  legal  effect,  as  though  the  name  of  the  former  had 
been  inserted  in  the  letter  from  the  beginning.  3 

Letters  of  credit  and  commercial  guaranties  are  not  nego- 
tiable ;  neither  is  the  party  for  whose  benefit  a  letter  is  drawn 
by  a  third  person,  privy  to  the  contract,  so  that  he  can  sue 
upon  it.  The  person  writing  such  a  letter  stands  in  the  rela- 
tion of  guarantor  or  surety  to  the  person  to  whom  it  is  addres- 
sed; and  is  answerable  to  him  to  the  extent  of  his  undertaking. 
And  if  the  credit  opened  be  for  bills  to  be  drawn  at  sixty  days 
sight,  it  will  not  cover  those  drawn  for  any  other  length  of 
time.  4 

»2R.  S.,63,  3ded. 

•Coolidge  v.  Pay  son,  2  Wheat.,  66;  Boyce  v.  Edwards,  4  Pet.  R.,  Ill; 
Riggs  v.  Lindsay,  7  Cranch,  500;  3  Burr.,  1663. 

1  Per  Bronson,  Ch.  J.,  in  Brickheadv.  Brown,  6  Hill  R.,  641;  S.  C.,2  Denio 
R.,  375;  1  Sand.  S.  C.  R.,  663.  Where  the  first  letter  of  credit  waa  drawn  to 
cover  bills  drawn  at  sixty  days  sight,  and  afterwards  extended  by  two  other 
letters  without  mentioning  the  length  of  the  bills.  Held  that  they  did  not 
cover  bills  drawn  at  ninety  days.  See  Union  Bank  v.  Coster,  8  Comst.,  208. 

4  5  Hill  R.,  636. 


240  BILLS  OF   EXCHANGE  AND   PROMISSORY    NOTES. 

Where  a  firm  residing  in  the  city  of  New- York,  wrote  a 
general  letter  of  credit,  undertaking  to  accept  and  pay  at 
maturity  any  draft  or  drafts  on  them  at  sixty  days  sight,  issued 
by  a  particular  firm  in  New  Orleans,  to  the  extent  of  twenty- 
five  thousand  dollars;  and  the  defendant  wrote  underneath, 
"  I  hereby  guarantee  the  due  acceptance  and  payment  of  any 
draft  or  drafts  issued  in  virtue  of  the  above  credit,"  it  was 
held  that  the  letter  and  the  guaranty  were  to  be  construed 
together  as  forming  one  instrument,  and  that  they  expressed 
a  sufficient  consideration  to  uphold  the  guaranty,  i  The  letter 
is  an  open  proposition  to  accept  and  pay  drafts  drawn  in  a 
particular  manner,  and  the  guaranty  is  an  undertaking  that 
they  shall  be  accepted  and  paid;  and  as  soon  as  any  person 
accepts  and  acts  upon  the  proposition,  both  of  the  contracts 
become  perfect.  2 

A  collateral  undertaking  to  guarantee  the  payment  of  a 
bill  of  exchange,  being  an  agreement  to  answer  for  the  debt, 
default  or  miscarriage  of  a  third  person,  is  within  the  statute 
of  frauds,  and  must  be  in  writing,  and  must  either  expressly 
or  impliedly  state  on  its  face  an  adequate  consideration.  3 
But  this  rule  does  not  apply  in  those  states  in  which  the 
statute  is  satisfied  if  the  promise  be  in  writing.  4  The  con- 
tract stands  upon  the  same  footing  as  the  guaranty  of  a  prom- 

1  The  Union  Bank  of  Louisiana  v.  Executors  of  Coster,  1  Sandford's  Supe- 
rior Court  Rep.,  563;  S.  C.  3  Comstock's  Rep.,  203. 

It  is  not  necessary  that  the  party  acting  upon  such  a  guaranty  should  give 
to  the  guarantor  notice  to  that  effect,  in  order  to  fix  his  liability.  Smith  v. 
Dann,  6  Hill  R.,  643.  The  rule  is  that  when  one  guarantees  the  act  of  another, 
his  liability  is  equal  to  that  of  his  principal,  and  he  is  not  entitled  to  notice  of 
the  principal's  default,  as  a  condition  precedent  to  the  bringing  of  an  action 
against  him,  unless  the  contract  expressly  provides  for  such  notice.  Douglass 
v.  Howland,  24  Wend.  R.,  49. 

a  But  an  agreement  to  guarantee  the  payment  of  another  person's  note,  des- 
cribing it,  but  expressing  no  consideration,  is  void;  and  parol  testimony  is  not 
admissable  to  prove  that  there  was  in  fact  a  good  consideration.  Weed  v. 
Clark,  4  Sand.  R.,  31. 

»  Morley  v.  Boothby,  3  Bing.  R.,  107;  3  John.  R.,  210. 

4  17  Mass.,  122;  Sage  v.  Wilcox,  6  Conn.,  81 ;  6  Cranch,  151. 


GUARANTY    OF    BILLS    AND    NOTES.  241 

issory  note.  1  It  is  not  a  negotiable  instrument^  and  in  an 
action  upon  it,  the  plaintiff  is  bound  to  declare  specially.  3 

In  France,  the  payment  of  a  bill  of  exchange,  independently 
of  the  acceptance  and  indorsement,  may  be  secured  by  a 
guaranty,  par  un  aval.  This  guaranty  is  given  by  a  third 
person,  either  on  the  bill  itself  or  by  a  separate  writing.  4 
The  person  thus  guaranteeing  is  bound  in  the  same  manner 
as  the  drawer  and  indorser;  and  the  contract  of  guaranty  is 
negotiable  in  the  same  manner  as  the  bill  itself.  5  The  same 
rule  prevails  very  generally  on  the  continent,  and  is  the  law 
of  Scotland.  6 

Notice  of  non-payment  is  not  necessary  in  order  to  charge 
the  guarantor;  but  it  is  advisable  to  give  him  notice  inasmuch 
as  it  frequently  becomes  important  to  prove  notice  as  a  means 
of  rebutting  the  presumption  of  laches  in  the  party  guaran- 
teed. 7  Mr.  Chitty  states  the  rule  thus:  "in  general,  if  the 
bill  or  note  be  given  as  a  collateral  security,  and  the  party 
delivering  it  were  no  party  to  it,  either  by  indorsing  or  trans- 
fering  it  by  delivery  when  payable  to  bearer,  but  merely 
caused  it  to  be  drawn  or  indorsed,  or  indorsed  over  by  a  third 
person  as  security,  or  has  merely  guaranteed  the  payment,  it 
has  been  considered  that  he  is  not  within  the  custom  of  mer- 
chants an  indorser  or  party  to  it,  so  as  to  be  absolutely  entitled 
to  a  strict  regular  notice,  nor  discharged  from  his  liability  by 
the  neglect  of  the  holder  to  give  him  such  notice,  unless  he 
can  shew  by  express  evidence  or  by  inference,  that  he  has 
actually  sustained  loss  or  damage  by  the  omission  ;*  for  if  a 

1  Hawcs  T.  Armstrong,  1  Bing.  N.  C.,  761 ;  1  Scott,  661;  Eramott  v.  Kearna, 
6  Bing.  N.C.,  669. 

•  Ex  parte  Harrison,  2  Cox,  172;  2  Bro.  C.  C.,  614;  26  Wend.,  425. 
1  6  Wend.  R.,  807. 

•  Code  de  Commerce,  liv.  1,  tit.  8,  §  141,  142. 
•26  Wend.  R.,  443.  449. 

•  1  Bell  Comm.,  876 ;  our  law  is  different ;  Breed  v.  Hillhouse,  7  Conn.  R.,528. 
1  Story  on  Bills,  §  805. 

•Warrington  v.  Furbor,  8  East,  242;  Phillips  v.  Astling,  2  Taunt.,  206; 
Swingard  v.  Bowes,  5  Maule  and  S.,  62;  Hollrow  v.  Wilkins,  1  Bar.  and  Crew., 
10;  Van  Wart  T.  Woolley, 3  Bar.  and  Cress.,  489;  Camidge  v.  Allenby,  6  Bar. 
and  Cres.,  378;  True  T.  Harding,  8  Fairf.,  193;  Reynolds  T.  Douglass,  12 
Peters,  497. 


242  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

person  deliver  over  a  bill  to  another,  without  indorsing  it,  he 
does  not  subject  himself  to  the  obligations  of  the  law  merchant, 
and  cannot  be  sued  upon  the  bill,  and  as  he  does  not  subject 
himself  to  the  obligation  he  is  not  entitled  to  the  advantages; 
and  if  he  can  prove  that  he  has  sustained  damage,  then  he  is 
only  discharged  to  the  extent  of  such  actual  damage.  If  the 
parties  who  ought  primarily  to  have  paid  the  bill  or  note  were 
solvent  at  the  time  when  the  same  became  due,  and  for  some 
time  afterwards,  and  only  subsequently  became  insolvent, 
before  notice,  an  inference  of  actual  damage  from  the  want  of 
notice  to  the  party  guaranteeing  or  otherwise  collaterally 
liable,  will  prevail,  until  rebutted  by  actual  proof,  that  if 
notice  had  been  given,  payment  would  not  have  been  obtained,  i 
But  if  the  parties  became  bankrupt,  or  wholly  insolvent 
before  the  bill  or  note  fell  due,  then  the  inference  will  be  that 
no  injury  arose  from  the  want  of  notice;  though  that  inference 
may  also  be  rebutted."  2 

It  is  plain  from  the  cases  cited  by  him  as  well  as  from  the 
American  authorities,  that  notice  to  the  guarantor  is  not  a 
term  or  condition  of  the  contract;  3  but  only  a  mode  of  shew- 
ing that  the  party  guaranteed  has  taken  the  proper  steps  to 
enforce  or  secure  payment  of  the  principal  debt :  that  the 
person  holding  a  guaranty  for  the  payment  of  a  bill,  is  never- 
theless bound  in  duty  to  the  guarantor  to  make  a  proper  pre- 
sentment of  it  for  payment,  and  give  due  notice  of  its  dishonor 
so  as  to  charge  the  parties  liable  thereon :  4  that  where  an 
indorsed  note,  not  yet  due,  is  deposited  as  collateral  security, 
the  pawnee  is  bound  to  have  it  duly  protested,  and  to  do 
those  acts  which  will  preserve  the  liability  of  the  indorser :  5 
and  that  the  guarantor  of  a  bill  is  no  party  to  the  instrument, 
and  is  not  by  the  custom  of  merchants  entitled  to  notice  of 

1 2  Taunt.,  206;  5  Maule  and  S.,  62. 

9  8  East,  242. 

*  See  authorities  above  cited,  and  Gibbs  v.  Cannon,  9  Serg.  and  Rawle,198; 
Erwin  v.  Lamborn,  1  Harr.,  (Del.)  125;  Prentice  v.  Danielson,  6  Conn.,  175; 
2  Amer.  Lead.  Cases,  by  Hare  and  Wallace,  33-98. 

4  2  Taunt.,  206. 

§  Russell  v.  Hester,  10  Ala.  R.,  635;  Edwards  on  Bailm.,  238. 


GUARANTY    OF    BILLS    AND    NOTES.  243 

the  dishonor;  but  that  if  he  can  shew  that  for  want  of  regu- 
lar notice  he  has  sustained  actual  damage,  he  will  have  a 
defence,  at  least  pro  tanto.  \ 

Mr.  Justice  Bayley  in  his  work  on  bills  and  notes  states  the 
rule  as  follows :  "  A  surety,  though  not  a  party  to  a  bill  or 
note,  may  be  discharged  by  want  of  notice  and  neglect  to 
present,  if  it  is  probable  he  would  otherwise  have  been  safe.  2 
As  if  the  parties  who  ought  to  have  paid  were  solvent  when 
the  bill  or  note  became  due,  and  have  failed  since.  3  But  a 
person  not  a  party  to  a  bill  or  note,  (being  a  guarantor  of  its 
payment,)  cannot  complain  of  laches  or  want  of  notice,  unless 
he  can  shew  that  it  has  done  him  prejudice.  4  Therefore  he 
cannot  complain  if  the  person  who  ought  to  have  paid  the 
bill  or  note  were  insolvent  when  it  should  have  been  paid."  5 

When  by  the  terms  of  the  guaranty  it  is  the  duty  of  the 
party  guaranteed  to  take  any  measures  or  steps  to  insure  pay- 
ment, notice  of  non-payment  becomes  material  ;tf  but  if  the 
undertaking  of  the  guarantor  be  absolute  and  unconditional 
that  the  bill  or  note  shall  be  paid  at  maturity,  it  is  his  duty 
to  see  that  it  is  done. 

The  obligation  of  the  guarantor  is  that  which  the  fair  im- 
port of  the  language  used  imposes  upon  him;  if  he  engages 
for  the  payment  of  a  given  sum  of  money,  when  the  same 
falls  due,  he  is  not  entitled  to  insist  upon  any  condition.  7  A 
general  guaranty  of  the  note,  or  a  guaranty  of  its  collection, 
implies  a  right  on  his  part  to  insist  that  the  party  guaranteed 
shall  use  diligence  in  collecting  the  debt  of  the  principal 
debtor,  and  give  to  him,  (the  guarantor,)  every  opportunity  to 

1  Chitty  on  Bills,  441-444.  The  edition  cited  is  the  eleventh  American  from 
the  ninth  London  edition. 

•  Eickerdikc  v.  Bollman,  1  Term  R.,  405;  Rogers  T.   Stephens,  2  Term  R., 
718. 

1  Philips  v.  Astling,  2  Taunt.,  206. 

4  Warrington  v.  Fenbor,  8  East  R.,  'JU. 

•  Bayley  on  Bills  and  Notes,  184;  American  from  the  fourth  London  edition, 

1826. 

•  Camidge  v.  Allenby,  B  Bar.  and  Cres.,  878. 

1  Breed  v.  Hillhouse,  7  Conn.  R.,  523;  Williams  v.  Granger,  4  Day,  444; 
Read  v.  Cutts,  7  Greenl.,  186. 


244  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

protect  himself  against  his  principal.  The  usual  and  proper 
means  of  putting  him  upon  his  guard,  is  to  give  him  prompt 
notice  of  non-payment;  and  hence  if  he  be  prejudiced  by  the 
want  of  such  notice,  he  is  held  discharged  to  the  extent  of  the 
damage  sustained  by  him.  i  On  the  other  hand,  where  he  is 
not  injured  by  the  want  of  notice,  he  is  liable  just  the  same  as 
if  duly  notified;  2  and  the  absence  or  want  of  notice  does  not 
imply  such  an  injury  to  the  guarantor  as  will  discharge  him 
from  his  liability.  3  To  have  that  effect,  it  must  appear  affir- 
matively that  he  has  been  injured  by  the  omission. 

The  terms  of  the  contract  of  guaranty  are  construed  strictly;  4 
and  the  law  does  not  supply  any  condition  which  is  not  incor- 
porated into  the  agreement,  or  fairly  implied  from  the  language 
used.  5 

1  Reynolds  v.  Douglass,  12  Peters,  497. 

*  Gibbs  v.  Cannon,  9  Serg.  and  R.,  198;  Babpock  v.  Bryant,  12  Pick.,  133, 
416. 

3  Rhett  v.  Poe,  2  How.  U.  S.,  457;  Woodson  v.  Moody.  4  Humph.,  303;  9 
Shep.,  164;  Mathews  v.  Chrisman,  12  S.  and  M.,  595. 

*  Bigelow  v.  Benton,  14  Barb.  R.,  123. 

*  Wright  v.  Johnson,  8  Wend.,  612;  Hunt  v.  Smith,  17  Wend.,  179;  Dobbin 
v.  Brandley,  17  Wend.,  422;  Walrath  v.  Thompson,  6  Hill  R.,  540;  2  Comst. 
R.,  185. 


CHAPTER    V. 
INDORSEMENT  AND  TRANSFER. 

Notes  and  bills  payable  to  order,  or  to  bearer,  or  containing 
any  words  to  make  them  assignable,  may  be  transfered  so  as 
to  give  the  indorsee  a  right  of  action  upon  the  bill  or  note 
against  all  the  antecedent  parties;  and  bills  or  notes  contain- 
ing no  express  words  making  them  assignable  may,  in  general, 
be  assigned  so  as  to  give  the  assignee  a  right  of  action  upon 
them  against  the  assignor,  i 

Bills  of  exchange  are  assignable  at  common  law;  and 
promissory  notes  are  by  statute  placed  upon  the  same  footing. 
The  former  were  held  assignable  at  first  under  the  custom  of 
merchants,  which  at  length  ripened  into  a  general  custom  and 
became  a  part  of  the  common  law :  and  the  latter  were  by 
statute  made  assignable  or  indorsable  over  in  the  same  manner 
as  inland  bills  of  exchange.  2 

The  transferable  quality  of  bills  and  notes  is  that  which 
principally  distinguishes  them  from  other  contracts ;  for  it  was 
the  general  rule  of  the  common  law,  that  choses  in  action  are 
not  assignable.  3  Of  late  years,  indeed,  this  rule  has  been 
subjected  to  a  variety  of  modifications  :  4  relaxed  by  degrees, 
it  has  finally  been  reversed  in  several  of  the  states,  so  that  an 
action  at  law  may  now  be  maintained  by  the  assignee  of  a 
chose  in  action  in  his  own  name ;  5  though  the  same  defence 

1  Baylcy  on  Bills,  65.  In  this  state  the  assignee  has  a  right  of  action  in  his 
own  name  in  eiitu  r  case.  0  Barb.  R..  214;  16  id.  620. 

*  3  and  4  Anne,  c.  9.,  §  1,  made  porp  'Uial  by  7  Anne,  ch.  25.    This  statute 
took  effect  from  and  after  May  1,  1705,  and  the  preamble  recitos  the  rules 
then  held  in  relation  to  n  >u-s  in  writing  for  the  payment  of  money. 

*  2  Black.  Com.,  468. 

4  2  Caines,  369;  19  John.  R.,  498;  4  Cowen,73;  6  Cowen,  151;  11  John.,  47; 
11  Barb.,  620. 

*  Code  of  Procedure,  §  111,  112;  2  Hill,  496;  6  Pr.  R.,  99;  3  Sme.  and  M., 
647;  Hall  v.  Robinson,  2  Comst.,  298. 


246  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

may  be  interposed  as  if  no  assignment  had  been  made,  i  But, 
as  we  have  before  observed,  this  latter  qualification  of  the 
rule  does  not  apply  to  a  negotiable  promissory  note  or  bill  of 
exchange,  transfered  in  good  faith,  and  for  value,  before  due; 
thus,  to  a  great  degree  preserving  the  line  of  distinction 
between  negotiable  paper  and  other  choses  in  action. 

The  transfer  of  notes  and  bills  being  a  contract,  it  is  of 
course  necessary  that  the  payee  or  holder  of  the  instrument 
should  in  the  first  place  have  a  legal  capacity  to  do  the  act; 
that  he  should  be  competent  to  bind  himself  by  the  indorse- 
ment or  delivery  of  the  paper.  What  constitutes  such  legal 
capacity  we  have  already  considered  at  length;  and  shall 
therefore  in  this  connection  only  mention  the  subject  as  it  bears 
upon  the  right  to  convey  the  title  to  bills  and  notes. 

An  infant  may  indorse  a  negotiable  promissory  note  or  bill 
of  exchange,  made  payable  to  him,  so  as  to  transfer  the  prop- 
erty to  an  indorsee  for  a  valuable  consideration;  though  he 
cannot  so  bind  himself  by  the  act  of  indorsement  as  to  sur- 
render his  right  to  interpose  a  plea  of  infancy,  in  avoidance 
of  his  liability  as  an  indorser.  2  His  indorsement,  like  the 
making  of  a  note,  is  voidable,  and  not  void.  3  And  where  he 
receives  a  full  consideration  for  the  transfer  of  property,  such 
as  a  negotiable  note  or  bill  of  exchange,  and  makes  a  manual 
delivery  of  it,  his  right  to  rescind  or  avoid  the  contract  is,  it 
seems,  suspended  until  he  comes  of  age.  4  And  on  coming  of 
age,  he  is  not  allowed  to  disaffirm  the  contract  unless  he 
returns  the  consideration  received  by  him;  that  is  to  say,  he 
cannot  disaffirm  it  in  part  and  ratify  it  as  to  the  residue.  5 
And  so  where  he  purchases  a  quantity  of  goods  and  pays  for 
them  during  his  infancy,  he  is  not  permitted  to  retain  the 

'3  Barb.  R.,  40;  1  Sand.  R.,  23;  4  Sand..  610;  11  Barb.,  260. 

"Nightingale  v.  Withington,  15  Mass.  R.,  272.  His  contract  is  good,  until 
he  himself  repudiates  it.  Oliver  v.  Houldlet,  13  Mass.  R.,  237. 

"Goodsell  v.  Myers,  3  Wend.,  479;  17  Wend.,  419;  2  Hill.  R.,  120;  11 
Wend.,  85;  Contra  see  10  John.  R.,  33. 

4  Roof  v.  Stafford.  7  Cowen  R.,  179;  S.  C.,  9  id.  626;  15  Wend.,  636. 

•Medbury  v.  Watrons,  7  Hill  R.,  110  and  cases  cited  there.  Kitchen  v. 
Lee,  11  Paige,  107. 


INDORSEMENT    AND   TRANSFER.  247 

property,  or  to  misuse  and  depreciate  it  in  value,  and  then 
repudiate  the  contract  of  purchase,  i 

The  common  law  rule  is  that  the  husband  is  entitled  to  all 
the  personal  property  belonging  to  his  wife  at  the  time  of 
marriage,  or  acquired  by  her  during  coverture;  and  where 
that  property  consists  of  negotiable  paper,  payable  to  her  or 
to  her  order,  it  is  in  legal  effect  payable  to  her  husband,  so 
that  as  a  general  rule  an  effectual  transfer  can  only  be  made 
in  his  name.  2  But  a  married  woman  may  make  a  valid 
indorsement  of  a  note  payable  to  her,  by  a  name  different 
from  that  of  her  husband,  where  the  circumstances  are  such 
as  to  justify  the  presumption  that  he  assented  to  the  indorse- 
ment. 3  She  may  act  as  the  agent  of  her  husband,  and  by 
indorsing  it  in  his  name  transfer  the  title.  4  And  where  the 
husband  permits  her  to  carry  on  business  in  a  name  different 
from  his  own,  it  is  to  be  presumed  that  he  has  authorized  her 
to  indorse  notes  in  the  name  used  by  her  in  the  transaction  of 
business.  5 

On  the  death  of  the  holder  or  payee  of  negotiable  notes  or 
bills,  his  executor  or  administrator  becomes  vested  with  the 
title  and  has  the  right  to  transfer  the  same  by  indorsement  or 
delivery.  6  And  it  has  been  held  in  this  state,  in  the  case  of 
a  note  payable  to  bearer,  that  an  administrator  appointed  in 
Pennsylvania  may  maintain  a  suit  here  in  his  own  name  as 
bearer;  there  being  nothing  to  impeach  his  character  as  a 
bona  fide  holder,  and  no  pretence  of  a  set  off.  7  But  where 

I  2  Paige  Ch.  R.,  191;  1  Dana  R.,  45;  Bartholomew  v.  Finemoro,  17  Barb., 
428. 

I 1  Strange,  516;  8  Wils.  5;  10  Mod.,  245;  2  Black.  R.,  1081;  4  Term  R., 
861;  8  Burr,  1776;  2  Maule  and  Sel.,  893;  12  Pick..  178;  1  B.  and  Aid.,  218. 
The  wife's  note  or  contract  is  void,  15  Barb.  R.,  81. 

1  Miller  v.  Delamater,  12  Wend.  R.,  488. 

4  Hiirlow  v.  Bishop,  1  East.,  482;  10  Wend.,  792. 

*  Coles  v.  Davis.  1  Campb.,  486;  1  Taunt.,  867. 

•  Rawlinson  v.  Stone,  8  Wils.,  1;  2  Stra.,  1260;  Harper  v.  Butler,  2  Peters, 
289. 

7  Robinson  v.  Crandall,  9  Wend.,  425.  As  an  administrator  appointed 
abroad,  he  could  not  sue  here.  1  John.  Ch.  R.,  156;  6  id.  853;  7  Cowen,  68. 


248  BILLS    OF    EXCHANGE  AND    PROMISSORY  NOTES. 

letters  of  administration  have  been  granted  in  this  state,  and 
a  suit  has  been  commenced  here  by  the  administrator  against 
the  maker  of  a  note,  a  foreign  administrator  has  no  power  to 
control  the  suit  or  to  release  the  demand;  debts  of  this  char- 
acter are  bona  notabilia  in  the  state  where  the  debtor  resides.  1 

Executors  and  administrators  are  considered  as  holding 
notes,  bills  and  other  securities  belonging  to  the  testator  or 
intestate,  in  their  representative  character;  and  consequently 
each  of  them  represents  the  deceased,  and  the  act  of  each 
transfering  such  securities,  is  binding  upon  the  estate.  2  In 
other  words,  if  a  man  appoint  several  executors,  they  are 
esteemed  in  law  but  as  one  person  representing  the  testator; 
and  acts  done  by  one  of  them  which  relate  to  the  sale  and 
delivery  of  the  testator's  goods  or  the  assignment  of  his  choses 
in  action,  are  deemed  the  acts  of  all.  3  And  there  is  in  this 
respect  no  distinction  between  notes  and  other  securities 
payable  to  the  testator,  and  those  that  are  subsequently  taken 
payable  to  his  executors; 4  and  none  between  the  powers  of 
executors  and  administrators.  5 

The  right  of  a  representative  to  transfer  securities  belong- 
ing to  the  testator  or  intestate,  does  not  include  the  right  to 
bind  the  estate  by  the  usual  contract  of  indorsement :  if  the 
executor  or  administrator  indorse  a  note  or  bill  without  quali- 
fication,  he  is  personally  liable  in  case  the  bill  is  dishonored.  6 
Merely  describing  himself  as  executor  or  administrator  will 
not  relieve  him  from  personal  responsibility :  7  unless  he 
makes  his  undertaking  substantially  a  promise  to  pay  out  of 
the  estate,  he  is  liable  personally  as  an  indorser.  8  But  it  has 

I  Chapman  v.  Fish,  6  Hill,  554;  Thompson  v.  Wilson,  2  N.  Hamp.  R.,  291; 
Vaughn  v.  Barret,  3  Verm.  R.,  333. 

II  Hertel  v.  Bogert,  9  Paige  R.,  62;  S.  C.,  4  Hill,  492;  Contra,  Smith  v. 
Whiting,  9  Mass.  R.,  334,  where  it  was  held  that  a  note  payable  to  two  execu- 
tors could  not  be  transfered  by  the  indorsement  of  one  of  them. 

8  Wheeler  v.  Wheeler,  9  Cowen  R.,  34.     In  this  case  the  assignment  of  a 
note  by  one  of  two  executors  was  held  good. 
4  4  Hill  R.,  492.  and  cases  there  cited. 
6  Murray  v.  Blatchford,  1  Wend.  R.,  583. 
6  Foster  v.  Fuller,  6  Mass.  R.,  58;  7  Taunt.,  580. 
T  Childs  v.  Monins,  2  Brod.  and  Bing.,  460. 
•  King  v.  Thorn,  1  Term  R.,  480;  8  Cowen  R.,  81  j  9  John.  R.,  834. 


INDORSEMENT    AND  TRANSFER.  249 

been  adjudged  in  this  State  that,  an  indorsement  of  a  note  to 
the  cashier  of  a  moneyed  corporation,  by  adding  the  word 
cashier  to  his  name  in  the  indorsement,  is  a  transfer  to  the 
corporation,  where  that  is  the  design  of  the  transaction  ;  i  that 
where  the  payee  of  a  note  is  known  in  the  negotiation  as  the 
agent  of  a  corporation,  and  indorses  the  note,  adding  to  his 
name  the  word  agent,  the  indorsement  operates  as  a  transfer, 
but  not  as  a  collateral  contract  ;  2  and  that  a  note  payable  to 
the  order  of  an  officer  of  a  corporation  may  be  transfered  by 
him  in  his  official  character  by  simply  adding  to  his  name  in 
the  indorsement  a  word  indicating  his  office,  without  incur- 
ring personal  responsibility  as  an  indorser.  3  These  cases  pro- 
ceed upon  the  principle  that  the  indorsement  of  a  promissory 
note  or  bill  of  exchange  effects  two  different  and  distinct  pur- 
poses j  that  it  is  a  present  transfer  and  assignment  of  the 
paper  to  the  indorsee,  and  an  executory  contract  by  which  the 
indorser  agrees,  upon  certain  conditions,  to  pay  the  amount 
of  the  note  or  bill  himself.  And  although  there  can  be  no 
regular  indorsement  which  does  not  ipso  facto  transfer  the 
paper,  it  is  not  essential  that  it  should  also  contain  the  colla- 
teral contract.  For  the  same  reason,  where  the  drawer  of  a 
bill  adds  to  his  name  the  word  "  agent"  and  discloses  his 
principal,  the  payee  cannot  hold  him  personally  liable  on  the 
draft.  4 

1  The  Watervliet  Bank  v.  White.  1  Denio,  608.  An  indorsement  '*  pay  E. 
O.,  Cashier,  or  order,"  made  by  the  holder  of  a  note  to  the  bank  of  which  E. 
O.  is  cashier,  U  a  legal  transfer  to  the  bank. 

*  Mott  T.  Hicks,  1  Cowen  R.,  513.    In  this  case  the  note  was  payable  to 
Houseman  by  name,  without  any  addition,  and  he  indorsed  it,  adding  the  word 
agent  to  his  name,  to  a  person  who  knew  that  the  indorsement  was  made  by 
him  as  agent  of  a  corporation. 

*  Babcock  T.  Beman,  1  Kernan  R.,  200.    The  note  and  indorsement  were  as 
follows  :  "  Four  months  after  date  we  promise  to  pay  to  the  order  of  R. 
Bcman,  Treat.,  five  hundred  dollars,  value  received.     Indorsed,  R.  Beman, 
Treasurer.    Adam  Smith  &.  Co."     And  the  answer  alleged  that  the  indorse- 
ment was  made  at  Treasurer,  and  not  otherwise. 

4  Hicks  v.  Hinde,  9  Barb.  R.,  628.  Like  an  indorser,  the  drawer  may  add 
to  his  signature  restrictive  or  quali  ying  words,  limiting  his  liability.  See 
MOM  v.  Livingston,  4  Couist.  R.,  208;  6  Seld.,  671. 

14 


250  BILLS  OF  EXCHANGE  AND   PROMISSORY  NOTES. 

The  person  to  whose  order  a  bill  or  note  is  made  payable, 
is  generally  vested  with  the  right  to  transfer  the  same  by 
indorsement;  and  it  does  not  lie  with  the  maker  or  acceptor 
to  dispute  the  power  of  the  payee  to  indorse  and  transfer  the 
instrument,  i  By  making  the  note  or  accepting  the  bill,  and 
issuing  it,  the  maker  and  acceptor  assert  to  the  world  the 
competency  of  the  payee  to  negotiate  and  assign  the  paper; 
and  they  are  not  afterwards  permitted  to  gainsay  the  assertion 
so  made. 

Where  the  doctrine  of  estoppel  does  not  apply,  the  rule  in 
regard  to  the  transfer  of  bills  and  notes  is,  that  no  one  but 
the  payee  or  the  person  legally  interested  in  the  instrument 
can  convey  the  title  by  indorsement.  2  For  this  reason,  in  an 
action  against  the  drawee  of  a  bill,  it  is  not  enough  for  the 
holder  to  prove  that  it  has  been  accepted,  without  also  estab- 
lishing his  title  to  the  bill :  and  if  the  acceptor,  under  a  mis- 
take as  to  the  fact  of  ownership,  has  paid  the  bill  to  one  who 
had  no  title,  the  money  may  be  recovered  back,  although  it 
was  paid  to  a  bona  fide  holder.  3  And  so  where  a  bill  falls 
into  the  hands  of  a  man  bearing  the  same  name  as  the  payee, 
and  he  indorses  it  over  to  another  person,  no  title  passes.  4 
For  the  indorsee  of  a  note  cannot  recover  on  it  against  the 
maker  without  deducing  his  title  through  the  payee;  5  nor 
can  the  indorsee  of  a  bill  of  exchange  recover  in  an  action 
against  the  drawer  or  acceptor,  without  proving  an  assign- 
ment of  the  bill  by  the  payee. 

1  Taylor  v.  Croker,  4  Esp.,  187.  The  bill  in  this  case  was  drawn  by  two 
infants,  accepted  by  the  defts,  and  indorsed  over  by  the  drawers;  and  it  was 
held  that  the  defts,  by  accepting,  admitted  that  the  infants  were  competent 
to  indorse,  and  that  they  could  not  afterwards  deny  their  competency.  The 
same  rule  was  applied  in  Drayton  v.  Dale.  2  Barn,  and  Cress.,  293,  where  the 
payee  became  bankrupt,  and  then  indorsed  over  the  note  before  his  assignees 
had  taken  possession  of  his  assets. 

9  Canal  Bank  v.  Bank  of  Albany,  1  Hill  R.,  287.  See  observations  on  this 
case  by  Bronson  J.,  in  Coggill  v.  The  American  Exchange  Bank,  1  Comst.  R.,  116. 

*  1  Hill,  287. 

4  Gibson  v.  Minet,  1  H.  Bla.,  607;  Mead  v.  Young,  4  Term  R.,  28.  Such 
an  indorsement  is  a  forgery,  and  the  holder  though  he  took  the  bill  in  good 
faith,  cannot  deduce  his  title  through  a  forged  signature. 

*  Blakely  v.  Grant,  6  Mass  R.,  388. 


INDORSEMENT  AND  TRANSFER.  251 

In  order  to  give  currency  to  a  bill  or  note,  care  should  be 
taken  to  write  the  name  of  the  payee  correctly;  and  where 
there  are  two  or  many  persons  of  the  same  name,  the  instru- 
ment should  contain  a  proper  description  of  the  person  named 
as  payee.  This,  however,  is  only  a  matter  of  convenience; 
for  though  a  note  or  bill  be  drawn  payable  to  a  person  in  a 
wrong  name,  the  error  will  not  affect  his  title  nor  destroy  his 
right  to  transfer  the  paper,  i  The  initials  of  his  name  are 
sufficient  if  accompanied  with  an  accurate  description  of  the 
person  intended.  2  And  where  the  payee's  name  is  written  in 
full  in  the  body  of  the  instrument,  it  is  held  that  he  may 
transfer  it  by  making  his  mark  or  writing  his  initials  on  the 
back,  provided  it  is  shewn  that  they  were  used  as  a  substitute 
for  his  name.  3  So,  where  a  note  was  made  payable  to  the 
order  of  the  person  who  should  thereafter  indorse  it,  it  was 
held  to  pass  by  the  indorsement  of  the  person  to  whom  it  was 
delivered.  4 

Under  the  code  of  procedure  which  requires  that  actions 
shall  be  prosecuted  in  the  name  of  the  real  party  in  interest, 
the  mere  holder  of  a  negotiable  promissory  note  who  has  no 
interest  in  it,  cannot  now,  as  he  could  formerly,  maintain  an 
action  upon  it;  5  for  if  the  plaintiff's  name  do  not  appear 
upon  the  instrument,  it  is  essential  for  him  to  shew  in  some 
way  the  connexion  between  himself  and  the  note;  as  that  it 
has  been  indorsed  or  transfered  to  him,  or  that  he  is  the  holder 
or  owner  of  the  note.  6 

1  1  Cowen's  Trea..  186. 

•  Rex  v.  Box,  6  Taunt.,  825. 

*  Merchants'  Bank  v.  Spicer,  6  Wend.  R.,  443;  Brown  T.  The  Butchers'  and 
Drovers'  Bank,  6  Hill,  443;  6  Barn,  and  Cress.,  284;  George  v.   Surrey,  1 
Mood,  and  Malk.,  516;  8  Adol.  and  Ellis,  94. 

4  The  U.  States  v.  White,  2  Hill  R.,  69.  The  makers  promised  to  pay  to 
"  the  order  of  the  indorsees  name  at  the  Utica  Bank,  $800,"  and  delivered  it 
to  Adams,  and  be  indorsed  it  to  the  Nary  Commissioners. 

*  Parker  v.  Totten,  10  Howard  Pr.  R..  283;  See  also  Code,  §  111,  118, 162. 

•  Lord  v.  Chesebrough,  4  Sand.  S.  C.  R.,  696.     The  plffs  in  this  case  gave  a 
copy  of  the  note,  and  added  below  it  "  indorsed  C.  S.  and  Co,"  but  the  com- 
plaint contained  no  allegation  that  the  note  was  indorsed  or  transfered  to 
plffs;  held  defective.    See  also,  9  Barb.  R.,  214;  11  id.  620,  as  to  the  proper 
mode  of  transfer. 


252  BILLS  OF  EXCHANGE  AND   PROMISSORY  NOTES. 

A  trustee  of  an  express  trust  with  whom  or  in  whose  name 
a  contract  is  made  for  the  benefit  of  another,  such  as  mer- 
cantile agents  and  factors  doing  business  according  to  the 
usage  and  custom  of  merchants  in  their  own  names  for  other 
parties,  may  sue  without  joining  with  him  the  party  for  whose 
benefit  the  action  is  prosecuted,  i  Under  this  rule  the  factor 
who  may  take  a  note  payable  to  himself  on  a  sale  of  his  prin- 
cipal's goods,  may  doubtless  maintain  an  action  upon  it  in  his 
own  name;  2  and  it  is  certain  that  he  may  transfer  negotiable 
paper  so  taken  to  a  bonafide  purchaser  for  a  fair  and  valuable 
consideration  so  as  to  vest  the  title  in  him.  3  In  respect  to  his 
principal  he  acts  as  an  agent,  and  where  he  holds  negotiable 
paper  in  that  capacity  and  transfers  it  fraudulently  to  a  person 
who  takes  it  without  notice  of  the  fraud,  the  policy  of  the 
law  will  not  allow  the  real  owner  to  assert  the  fraud  of  his 
agent  to  defeat  the  title  of  an  innocent  purchaser  for  value.  4 

Where  the  person  to  whom  an  agent  transfers  negotiable 
paper  is  acquainted  with  the  fact  of  his  agency,  it  is  his  duty 
to  ascertain  the  extent  of  his  authority;  5  and  it  is  but 
reasonable  that  he  should  be  deemed  to  acquire  only  such  an 
interest  as  the  agent  is  authorized  to  convey.  The  same  rule 
applies  to  the  making  as  well  as  the  indorsement  of  notes  and 
bills  :  if  the  act  purports  to  be  done  by  one  person  for  another, 
the  principal  will  not  be  bound  beyond  the  authority  given.  6 
But  where  an  agent  is  intrusted  with  blank  indorsements  or 
strips  of  paper  having  the  signature  of  his  principal  written 

1  Code,  §  113;  Grinnell  v.  Schmidt,  2  Sand.  R.,  706 ;  3  Code  R.,  19. 

2  Edwards  on  Bailm.,  280-283;  4  Cowen,  250;  Fenly  v.  Stewart,  5  Sand..  101. 

3  Bay  v.  Coddington,  6  John.  Ch.  R.,  54,  56;  6  Hill  R.,  93. 

4  6  Hill  R.,  93.     By  allowing  the  factor  to  sell  and  take  notes  in  his  own 
name,  or  permitting  him  to  retain  them  after  they  are  taken,  the  principal 
clothes  his  agent  with  the  power  to  put  them  into  circulation;  and  if  he  does 
so  in  violation  of  his  trust,  it  is  just  that  the  principal  should  suffer  the  conse- 
quent loss,  rather  than  an  innocent  purchaser  who  has  not  even  been  guilty  of 
negligence. 

*  Chitty  on  Bills,  200,  llth  American  from  9th  London  ed. 

6  Rossiter  v.  Rossiter,  8  Wend.,  494;  Webber  v.  Williams  College,  23  Pick., 
302;  Taber  v.  Cannon,  8  Metcalf,  456;  Smith  v.  Gibson,  6  Blackf.,  370;  4 
McCord,  89,  438;  Grant  v.  Seitsinger,  2  Penn.,  526. 


INDORSEMENT    AND   TRANSFER.  253 

thereon,  to  be  filled  up  in  the  form  of  promissory  notes,  he 
has  an  implied  authority  to  fill  up  and  deliver  the  instrument; 
and  though  he  acts  fraudulently  or  carelessly  in  the  execution 
of  his  trust,  the  paper  will  be  valid  in  the  hands  of  a  subse- 
quent holder,  who  receives  it  in  good  faith  and  for  value,  i 
In  itself  a  blank  indorsement  is  a  letter  of  credit  for  an 
indefinite  sum;  and  the  maker  by  delivering  it  to  his  agent, 
or  to  any  person,  authorizes  it  to  be  filled  up  in  proper  form.  2 
When  negotiable  paper  is  transfered  to  an  agent  for  a 
special  purpose,  and  that  purpose  is  plainly  expiessed  in  the 
indorsement,  it  is  no  longer  transferable  so  as  to  prejudice  the 
rights  of  the  real  owner.  3  Thus  an  indorsement  in  these 
words  "  pay  to  A.  B.  for  my  use,"  or  "  pay  to  A.  or  order  for 
my  use,"  checks  the  currency  of  the  bill  or  note,  because  it  is 
equivalent  to  a  notice  given  to  every  person  to  whom  it  is 
afterwards  presented,  that  the  indorser  is  not  the  owner  of  the 
paper.  4  And  it  is  the  general  principle  that  none  but  the 
owner,  that  is,  the  payee  or  the  person  to  whom  he  has  trans- 
fered the  title  can  convey  it  by  indorsement.  Lord  Tenter- 
den,  C.  J. :  "  The  use  of  indorsements  of  this  kind  is  not 
small,  nor  are  they,  as  it  seems  to  me,  inconsistent  with  the 
interests  and  convenience  of  commerce.  Such  an  indorse- 
ment will  not  prevent  the  indorsee  from  receiving  the  money 
from  the  acceptor  when  the  bill  becomes  due.  If  he  pay  it 
to  his  principal  all  will  be  well,  but  the  indorser  must  look 
to  him  for  the  application  of  it.  It  will  have  the  effect  of 
preventing  a  failing  man  from  disposing  of  the  bill  before  it 
becomes  due,  and  from  pledging  it  to  relieve  himself  from  his 
own  debts  at  the  expense  of  his  correspondent.  I  cannot  see 
that  the  interests  of  commerce  will  be  prejudiced  by  our 
holding  that  such  an  indorsement  is  restrictive.  On  the  con- 
trary, I  think  the  interests  of  commerce  will  be  thereby 
advanced.  It  is  said,  that  it  cannot  be  expected  that  bankers 

1  4  Mass.  R.,  46;  5  Cranch.  142;  1  Ala.  N.  S.,  18;  5  Monroe,  25;  2  Dana, 
142;  Johnson  v.  Blasdale,  1  Sraedcs  and  Marsh.,  17,  20. 
*  Russell  v.  Langstaffe,  Doug!.,  514;  7  Cowen  R.,  883. 
•Burr,  1227;  1  Atk.,  249. 
4  Bayley  on  Bills,  69,  70,  76;  Atwood  r.  Munnings,  7  Barn,  and  Cress.,  278. 


254  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

or  others,  when  requested  to  discount  such  bills  as  this, 
should  look  into  the  accounts  between  the  principal  and  his 
agent.  I  agree,  it  cannot  be  expected  they  should;  but  still, 
if  they  take  the  bill  so  indorsed,  they  take  it  at  their  peril, 
and  must  be  bound  by  the  state  of  the  accounts  between  those 
parties."  i 

When  a  note  or  bill  is  made  payable  or  is  indorsed  to  several 
persons,  who  are  not  partners,  all  of  them  must  unite  in  trans- 
fering  the  instrument :  2  when  made  payable  or  indorsed  to  a 
firm,  either  of  the  partners  has  the  right  to  convey  the  title  by 
indorsement ;  3  this  right  is  said  to  cease  as  soon  as  the  part- 
nership has  been  dissolved.  4  As  partners,  the  members  of  a 
firm  are  joint  owners  of  the  partnership  property,  and  each 
of  them  acts  as  the  authorized  agent  of  the  concern  in  the 
making  and  negotiation  of  commercial  paper.  5  The  form  of 
the  instrument  generally  shews  whether  it  is  payable  to  or 
held  by,  the  payees  or  indorsees  jointly  or  severally  :  if  two 
persons  not  being  partners,  draw  a  bill  on  a  third  person  paya- 
ble to  their  order,  and  sign  it  separately,  it  shews  on  its  face 
that  it  is  not  a  partnership  transaction :  6  and  on  the  other 
hand,  if  a  note  or  bill  is  drawn  payable  to  them,  or  indorsed 

1  Sigourney  v.  Lloyd,  8  Barn,  and  Cress.,  622.  The  payees  indorsed  the  bill 
to  Atwood,  and  he  indorsed  it  as  follows,  "  pay  to  Samuel  Williams,  Esq.,  of 
London,  or  his  order  for  my  use,"  and  it  was  held  that  this  indorsement  was 
restrictive,  and  did  not  authorize  Williams  to  get  the  bill  discounted  and  have 
the  proceeds  credited  to  himself;  that  the  qualifying  words  so  used  have  the 
effect  of  restraining  the  negotiability  of  the  bill,  or  at  least  of  making  the  first 
indorsee  (if  he  takes  the  bill  with  those  words  on  it,  as  Williams  did  in  this 
case,)  a  trustee  for  the  original  indorser.  The  same  doctrine  was  held  in  Snee 
v.  Prescott,  1  Atk.,  247;  Edie  v.  The  East  India  Co.,  2  Burr,  1216;  Ancher 
v.  The  Bank  of  England,  Doug.,  637. 

a  Godda-d  v.  Lyman,  14  Pick.,  268.  A  note  given  to  three  payees  was  in- 
dorsed by  two  of  them  to  the  third  and  a  stranger,  and  afterwards  the  third 
also  indorsed  to  the  stranger;  held  a  good  transfer  to  him.  Wood  v.  Wood, 
1  Harr.,  428;  Rogers  v.  Reed,  6  Shep.,  257,  Dwight  v.  Pease,  3  McLean,  94. 

'  Cumston  v.  McNair,  1  Wend.,  457;  Everit  v.  Strong,  5  Hill,  163. 

4  Sandford  v.  Mickles  and  Forman,  4  John.  R.,  224;  1  Hill  R.,  572;  3  Kent 
Com.,  63. 

5  2  Barb.  Supreme  Court  Rep.,  625. 

•  Carwick  v.  Vickery,  Doug.,  663;  10  Serg.  and  Rawle,  75;  2  Selden  R.,  19, 
124. 


INDORSEMENT  AND  TRANSFER.  255 

to  them,  in  a  firm  name,  and  one  of  them  indorses  it  over  in 
that  name  with  the  consent  of  the  other  the  title  will  pass,  i 
The  maker  of  the  instrument  cannot  dispute  that  it  is  payable 
to  them  as  partners;  and  though  they  are  not  so  in  fact,  the 
assent  of  the  party  in  interest  to  the  indorsement  will  render 
it  binding  upon  both  of  the  indorsers.  2 

Although  a  dissolution  of  a  partnership  terminates  the  right 
of  each  partner  to  bind  the  firm  as  between  themselves,  it  is 
a  well  settled  rule  that  the  acts  of  each  will  continue  to  bind 
the  firm  until  a  notice  of  dissolution  has  been  given  j  and  con- 
sequently, when  that  has  not  been  done,  and  until  it  is  done, 
the  acts  of  each  in  the  making  and  transfer  of  negotiable 
paper,  to  parties  receiving  it  in  good  faith,  will  be  valid 
against  the  firm.  3 

On  the  dissolution  of  a  partnership,  the  presumed  agency 
of  each  to  act  for  and  bind  the  firm  is  at  an  end;  and  neither 
of  them  can  from  that  time  forward  make  any  new  contract 
or  engagement  in  the  name  of  the  firm,  so  as  to  bind  the  con- 
cern, inconsistent  with  the  primary  duty,  incumbent  upon 
him,  of  winding  up  the  business  of  the  copartnership.  4  When 
the  partnership  is  dissolved  by  mutual  consent,  or  by  the 
expiration  of  the  term  for  which  it  was  formed,  and  there  is 
no  agreement  to  the  contrary,  it  is  presumed  that  each  part- 
ner still  has  authority  to  dispose  of  the  partnership  property, 
to  collect,  adjust  and  pay  debts  and  give  proper  acquittances; 
but  he  cannot  renew  a  note,  or  bind  the  firm  by  indorsement.  5 

1  Chitty  on  Bills,  67  j  Snelling  v.  Boyd,  6  Monr.,  172.  One  of  several  joint 
holders  of  a  bill  may  transfer  the  whole  interest  therein  by  his  indorsement. 
In  Hopkins  v.  Smith,  it  was  held  that  the  fact  that  two  persons  signed  a  joint 
note  was  no  evidence  of  a  partnership  between  them.  11  John  R.,  161,  ^71 , 
see  1  Denio,  472;  4Cowen,  168. 

•  12  Wend.,  483. 

1  Bristol  v.  Sprague,  8  Wend.,  428.  Aa  to  what  is  good  notice  of  dissolu- 
tion, see  Wardell  v.  Haight,  2  Barb.,  649,  and  cases  there  citedj  6  Barb.,  244; 
8  Corast.,  168. 

4  2  Comst.  R.,  628.  The  right  of  a  partner  to  bind  his  firm  is  based  on  a 
principle  of  agency;  and  death  always  revokes  the  authority  of  an  agi-nt. 

*  1  Hill  R..  676.    "  During  the  continuance  of  the  partnership  each  partner 
is  entitled  to  act  for  all,  as  their  general  agent.    On  dissolution,  he  ceases  to 
hold  that  character,  and  must  be  considered  as  a  mere  joint  debtor — his 
authority  is  revoked." 


256  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

On  a  dissolution  of  the  partnership,  by  death,  a  new  principle 
applies  to  the  rights  of  the  surviving  partner  :  as  survivor  he 
is  entitled  to  all  the  choses  in  action  and  other  evidences  of 
debt  belonging  to  the  firm;  and  there  can  be  little  doubt  of 
his  right  to  sell  and  transfer  the  title  to  bills  and  negotiable 
notes  held  by  him  in  that  capacity,  i 

Where  a  note  or  bill  is  made  payable  or  indorsed  to  A.  for 
the  use  of  B.,  the  title  and  right  of  transfer  is  in  the  trustee;  2 
and  so  where  the  payee  of  a  promissory  note  is  described  in  it 
as  the  assignee  of  another  person,  and  he  endorses  it  without 
any  addition  to  his  name,  the  indorsement  is  sufficient  to  pass 
the  payee's  interest  in  the  note,  whether  he  holds  it  in  hh  own 
right,  or  as  assignee  for  the  benefit  of  some  one  else.  3  But 
where  a  note  is  drawn  payable  to  one  person  to  the  order  of 
another,  the  latter  is  payee  of  the  note,  and  the  title  passes 
under  his  indorsement.  4 

In  cases  of  bankruptcy,  the  property  and  choses  in  action 
belonging  to  the  bankrupt  or  in  which  he  is  beneficially  inte- 
rested, are  by  the  assignment  vested  in  assignees  :  in  England 
the  statute  protects  all  contracts,  dealings  and  transactions  by 
and  with  any  bankrupt,  bona  fide  made  and  entered  into 
before  the  filing  of  a  petition  for  adjudication  of  bankruptcy, 
notwithstanding  any  prior  act  of  bankruptcy,  provided  the 
party  so  dealing  had  no  notice  of  such  act.  o  Under  this  pro- 
vision an  indorsement  or  transfer  of  a  bill  or  note  made  after 
an  act  of  bankruptcy  and  before  the  filing  of  petition,  in  good 
faith,  is  valid  ;  6  though  the  general  rule  is  that  the  assignment 

1  6  Cowen  R.,  441.  It  is  not  pretended  that  a  surviving  partner  can  bind 
the  joint  property  by  the  collateral  contract  of  indorsement ;  but  as  he  holds 
the  title  he  can  transfer  it ;  see  2  Barb.,  625;  and  Sage  v.  Chollar,  21  Barb.  S. 
C.  R.,  596. 

a  Evans  v.  Cramlington,  Garth.  5;  2  Vent.,  307. 

3  Bay  v.  Gunn,  1  Denio  R.,  108. 

*  Willis  v.  Green,  10  Wend.,  516.    Phinney  made  his  note,  by  which  he 
promised  to  pay  John  R.  "Willis,  to  the  order  of  Smith   Johnson  and  Lester 
Green,  a  certain  sum  of  money,  and  it  was  held  that  the  title  passed  under 
the  indorsement  of  Johnson  and  Green  to  Willis. 

*  2  and  3  Viet.,  c..  29;  and  12  and  13  Viet. 

*  Chitty  on  Bills,  208. 


INDORSEMENT    AND  TRANSFER.  257 

in  bankruptcy,  relates  back  and  operates  as  a  transfer  of  the 
j»r.>|»crty  and  things  in  action  belonging  to  the  bankrupt, 
including  bills  of  exchange  and  promissory  notes,  i  The  gene- 
ral rule,  of  course,  does  not  apply  to  negotiable  paper  held  by 
him  in  trust  for  another  person.  2 

The  objects  of  a  bankrupt  law  are  the  summary  and  imme- 
diate seizure  of  all  the  debtor's  property,  the  distribution  of 
it  among  the  creditors  in  general,  and  the  discharge  of  the 
debtor  from  future  liability  for  existing  debts.  3  On  the  other 
hand  insolvent  laws  are  designed  mainly  for  the  relief  of  the 
debtor.  4  But  it  is  sufficient  in  this  connexion  to  say  that  an 
assignment,  whether  made  by  the  party  himself,  or  by  judicial 
and  legislative  authority,  is  a  transfer  of  his  property  and 
choses  in  action;  and  that  a  statutory  assignment  has  no 
binding  force  beyond  the  territorial  jurisdiction  of  the  country 
in  which  it  is  made.  5  It  does  not  convey  personal  property 
situated  in  a  foreign  state.  6 

The  assignment  under  our  insolvent  laws  passes  the  entire 
estate  of  the  debtor;  7  but  does  not  carry  with  it  property 
in  money,  notes  or  other  choses  in  action  held  by  the  assignor 
in  trust :  •<  and  the  title  does  not  pass  until  an  actual  assign- 
ment is  made.  9 

Receivers  of  banking  institutions  and  other  companies, 
appointed  under  the  statutes  of  the  State,  are  also  vested  with 
the  property  and  choses  in  action  belonging  to  such  compa- 

'Bell  v.  Hunt,  3  Barb.  Ch.  R.,391;  Berthelon  T.  Belts,  4  Hill  R.,  677; 
Smith  v.  Bi  inkerhoff,  2  Selden  R.,  305. 

*  Wilson  v.  Codmaa.  3  Cranch  R.,    193.    It  is  not  deemed  worth  while  to 
enter  here  at  length  into  the  investigation  of  the  decisions  under   the  English 
bankrupt  laws. 

1  2  Burr.  829. 

4  Sackett  v.  Andross,  5  Hill,  327.    The  bankrupt  act  of  1841,  blended  and 
combined  the  theory  of  insolvent  and  bankrupt  laws  in  one  statute. 
*<Abraham  v.  Plestoro,  3  Wend.  R.,  639. 

•  3  Barb.  Ch.  R.,  891,  and  cases  there  cited;  1  Selden  R.,  320. 
T  Roseboom  v.  Mosher,  2  Denio,  61. 

"  Kennedy  v.  Strong.  10  John.  R.,  - 

•Bailey  v.  Burton,  8  Wend.,  339;  Wilson  v.  Allen,  6  Barb.,  645.  By 
statute  in  this  state,  receivers  and  committees  of  lunatics  and  habitual  drun- 
kards duly  appointed,  may  sue  in  their  own  names  for  debts  tranafered  to 
them,  or  entrusted  to  their  control. 


958  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

nies,  on  compliance  with  the  requirements  of  the  law  and  the 
rule  appointing  them,  i  But  in  order  to  establish  a  right  of 
recovery  on  bills  and  notes,  they  must  allege  an  appointment 
such  as  the  law  makes  to  operate  as  a  transfer  of  the  title  to 
them.  2 

The  time  when  a  transfer  of  bills  of  exchange  and  negotia- 
ble notes  may  be  made  is  not  limited  by  any  positive  rule  of 
law;  though  the  time  is  often  important  in  its  effect  upon  the 
rights  of  the  indorsee.  3  The  party  taking  notes  or  bills  already 
due,  takes  them  as  we  have  seen  subject  to  every  defence 
existing  against  them  in  the  hands  of  the  holder  when  they 
became  due.  4  With  this  qualification,  negotiable  notes  may 
be  transfered  as  well  after  as  before  they  have  been  dishonored  :3 
and  when  paper  over  due  is  transfered,  it  is  deemed  payable 
within  a  reasonable  time,  upon  demand;  6  and  the  purchaser 
takes  it  with  the  usual  remedy  against  such  indorsers  thereon 
as  have  been  properly  charged  with  notice.  7 

A  transfer  as  well  as  an  acceptance  of  a  bill  of  exchange, 
supposes  the  existence  of  the  bill  accepted  or  transfered;  but 
a  blank  indorsement  will  operate  as  a  transfer  of  a  bill  not 
yet  drawn,  and  it  is  no  objection  to  the  validity  of  a  bill  that 
the  acceptance  was  written  before  it  was  filled  up.  8  Nothing 
appearing  to  the  contrary,  the  presumption  of  law  is,  that  the 
indorsement  is  cotemporaneous  with  the  making  of  a  note,  or 
at  all  events  antecedent  to  its  becoming  due.  9 

1  Gillet  v.  Fairchild,  4  Denio,  80;  2  Selden  R.,  236;  1  Kern.  R.,  114. 

a  White  v.  Low,  7  Barb.  R.,  204;  6  Barb.,  542;  2  R.  S.,  559,  564,  3d  ed.  A 
cashier  of  a  banking  institution  has  no  right  to  make  an  assignment  of  pro- 
missory notes  exceeding  in  value  $1,000;  Gillet  v.  Phillips,  3  Kernan,  114. 

8  1  John.  Gas.,  51,  331;  5  Wend.,  600;  24  Wend.,  97. 

«  3  Cowen,  252. 

*  1  Cowen  R.,  387;  9  John.  R.,  121;  James  v.  Chalmers,  2  Selden.  209. 

«  Leavitt  v.  Putnam,  3  Comst.  R.,  494. 

7  Williams  v.  Matthews,  3  Cowen,  252. 

8  4  Mass.  R.,  46;  7  Cowen,  336;  3  Mass.,  275;  Schultz  v.  Astley,  2  Bing.  N. 
C.,  644. 

9  Pinkerton  v.  Bailey,  8  Wend.,  600.     The  holder  is  also  presumed,  in  the 
first  instance,  to  have  paid  value  for  the  bill,  Case  v.  The  Merch.  Banking 
Association,  4  Comst.  R.,  166;  and  this  presumption  is  not  overcome  by  shew- 
ing that  the  plffs  acquired  the  paper  after  it  was  due ;  James  v.  Chalmers,  supra. 


INDORSEMENT    AND  TRANSFER.  259 

When  a  bill  payable  a  certain  time  after  date,  has  been 
presented  for  acceptance  and  refused,  and  the  holder  has  neg- 
lected to  give  notice  of  such  dishonor  to  the  drawer  or  indor- 
sers,  they  are  discharged  from  liability  to  such  holder;  but  if 
he  transfer  the  bill  to  a  bona  fide  purchaser  for  a  valuable 
consideration,  before  the  specified  time  of  payment,  and  the 
latter  takes  it  ignorant  of  the  laches,  it  is  held  that  he  may 
recover  thereon  against  the  drawer  and  indorsers.  i  This 
decision  is  placed  on  the  ground  that,  as  the  holder  is  not 
bound  to  present  the  bill  for  acceptance,  there  is  nothing  on 
the  face  of  the  unaccepted  bill  to  awaken  suspicion  that  it  has 
been  presented  and  dishonored;  and  that  therefore  the  pur- 
chaser of  the  bill  is  entitled  to  the  usual  protection  extended 
to  a  bona  fide  holder.  2  Taking  the  paper  with  notice  of 
the  dishonor,  or  after  it  is  due,  it  is  incumbent  upon  the 
purchaser  to  satisfy  himself  that  it  is  good;  and  if  he  neglects 
to  do  so,  he  is  presumed  to  have  taken  it  on  the  credit  of  his 
indorser.  3 

The  English  rule  is  that  the  indorser  of  an  over  due  bill  or 
note  is  liable  to  such  equities  only  as  attach  on  the  bill  or  note 
itx-lf,  and  not  to  claims  arising  out  of  collateral  matters.  4 
Mr.  Justice  Story  states  the  rule  with  a  similar  qualification; 
the  holder  is  affected  only  "  by  such  equities  as  attach  to  the 
particular  note,  and  would,  as  between  these  (prior)  parties, 
be  available  to  control,  qualify,  or  extinguish  any  rights 
arising  thereon."  5  Unquestionably  the  rule  depends  upon 
the  terms  of  the  statute  authorizing  a  set-off.  tf  In  this  state 
a  general  set-off  is  expressly  allowed:  "If  the  action  be 
upon  a  negotiable  promissory  note,  or  bill  of  exchange,  which 

1  O'Keefe  r.  Dunn,  1  Marsh.,  613;  5  Maule  and  S.,  282. 

•  Brown  v.  Davis,  8  Term  R.,  80. 

•  Rothschild  v.  Corney,  9  B.  and  C..  391;  4  Mctcalf,  69;  11   Verm.,  70;  7 
Porter,  541;  8  Misa.,  107,  145;  5  Watts  and  Serg.,  164;  18  Maine,  179;  8 
John.  R.,  454;  2  Bailey,  298;  see  Brown  v.  Mott,  7  John.  R.,  861. 

4  Burrough  v.  Moss,  10  B.  and  C.,  558;  Quids  v.  Harrison, 28  Eng.  Law  and 
Eq.  R..  524. 

•  Story  on  Notes,  §  178;  Whitehead  v.  Walker,  10  Mees.  and  Wels,  698. 

•  O'Callaghan  v.  Sawyer,  5  John.  R.,  118;  Johnson  v.  Bridge,  6  Cowen,  698; 
5  Wend.,  842;  Miner  v.  Hoyt.  4  Hill  R.,  498. 


260  BILLS  OF    EXCHANGE   AND  PROMISSORY  NOTES. 

has  been  assigned  to  the  plaintiff  after  it  became  due,  a  set-off 
to  the  amount  of  the  plaintiff's  debt  may  be  made  of  a 
demand  existing  against  any  person  or  persons  who  shall  have 
assigned  or  transfered  such  note,  or  bill,  after  it  became  due, 
if  the  demand  be  such  as  might  have  been  set  off  against  the 
assignor  while  the  note  or  bill  belonged  to  him."  i  Under 
this  provision,  where  the  maker  of  two  notes  holds  a  demand 
against  the  payee  at  the  time  of  their  maturity  sufficient  to 
satisfy  one  of  them,  and  the  two  notes  are  afterwards  suc- 
cessively transfered,  it  is  held  that  his  demand  is  a  set-off 
against  the  note  last  transfered :  this  is  on  the  ground  that 
after  the  first  transfer  the  assignor  still  holds  demands  against 
the  maker  sufficient  to  exhaust  his  set-off,  thus  giving  him 
the  benefit  of  the  statute  and  protecting  the  purchaser  for 
value  2 

Without  entering  minutely  into  the  subject,  it  is  safe  to  say, 
that  the  English  rule  subjecting  the  indorsee  of  an  over-due 
bill  or  note  to  such  equities  only  as  attach  to  the  note  or  bill 
itself  and  not  to  a  set-off  arising  out  of  collateral  matters, 
does  not  prevail  very  generally  in  this  country.  It  has  not 
been  adopted  in  the  commercial,  as  distinguished  from  our 
more  agricultural  states;  3  nor  is  it  founded  upon  the  policy 
of  favoring  and  facilitating  the  circulation  of  business  paper.  4 
This  is  evident  from  the  fact  that  no  distinction  in  this  re- 

'2R.  S.,  450,  451,  |3d  ed.  The  statute  also  allows  a  set-off,  where  the 
plaintiff  sues  as  trustee  for  others,  of  a  demand  existing  "against  those  whom 
the  plaintiff  represents  or  for  whose  benefit  the  action  is  brought,  if  the  same 
might  have  been  set  off  in  an  action  brought  by  those  beneficially  interested. 
For  an  exception  to  this  rule,  see  2  R.  S.,  102. 

a  Collins  v.  Allen,  12  Wend.,  356.  Prior  to  the  R.  S.,  the  rule  in  regard  to 
a  set-off  in  such  cases  was  not  very  definitely  settled  in  this  state;  but  it  seems 
to  have  been  substantially  that  adopted  by  the  legislature  and  stated  in  the 
text.  Driggs  v.  Rockwell,  11  Wend.  R.,  504. 

1  Sargent  v.  Southgate.  5  Pick.,  312;  M'Duffie  v.  Dame,  11  N.  Hamp.,  244; 
4  Hill  R.,  193;  Nixon  v.  English,  3  M'Cord,  549;  Perry  v.  Mays,  2  Bailey, 
254. 

4  Notes  and  bills  arc  uniformly  treated  as  business  paper  only  when  nego- 
tiated before  they  become  due;  overdue  they  are  treated  as  dishonored  paper, 
6  Paige,  650. 


INDORSEMENT   AND  TRANSFER.  261 

spect  is  made  between  negotiable  notes  and  notes  not  nego- 
tiable, i 

Although  a  note  remains  negotiable  after  it  has  been  dis- 
honored, still  in  one  sense  the  indorsement  and  transfer  of  a 
note  over  due  is  a  renewal  of  the  instrument,  which  is  then 
declared  by  law  payable  within  a  reasonable  time,  upon 
demand ;  and  the  indorser  is  bound  only  upon  the  same  condi- 
tion of  demand  upon  the  drawer  and  notice  of  non-payment, 
as  any  other  indorser.  2  Here,  as  in  other  cases,  the  right  of 
set-oft'  between  the  parties  to  the  new  contract  depends  upon 
the  terms  of  the  statute;  for  at  common  law  a  set-off  is  not 
allowed.  3  In  Massachusetts  it  is  held  that,  when  a  negotiable 
note  is  indorsed  and  transfered  after  it  is  due,  and  the  defen- 
dant, (the  maker,)  relies  upon  matter  of  set-off  which  he  may 
have  against  the  promisee,  he  can  avail  himself  only  of  such 
matter  of  defence  as  existed  between  himself  and  the  promisee, 
at  the  time  of  the  actual  indorsement  and  transfer  of  the  note 
to  the  holder;  and  that  the  rule  is  the  same  when  the  action 
is  brought  against  the  indorser  who  indorsed  and  transfered 
the  note  after  it  became  due.  In  other  words,  the  defendant 
in  such  a  case  cannot  interpose  as  a  set-off  a  demand  acquired 
after  the  transfer  and  before  he  had  notice  of  it.  4 


MODES  OF  INDORSEMENT  AND  TRANSFER. 

The  contract  of  indorsement  is  governed  by  the  law  of 
the  place  where  it  is  niade.  If  made  in  New-York  the  rights 
and  duties  of  the  parties  under  it  are  to  be  ascertained  and 

1  Sanborn  v.  Little,  8  N.  Hamp.,  539;  6  id.  277;  4  id.  69;  Gould  v.  Chase, 
16  John.  R.,  226;  6  Hill  R.,  10.  In  Virginia  an  offset  is  allowed  even  where 
a  negotiable  note  is  assigned  before  it  becomes  due,  Stewart  v.  Anderson,  6 
Cranch,  208 ;  but  see  Code  of  Virginia,  of  1849.  Not  so  inNew-York,  Smith  v. 
Van  Loan,  16  Wend.,  659.  Formerly  the  action  on  notes  not  negotiable  was 
necessarily  brought  in  the  name  of  the  payee;  while  the  action  on  a  negotiable 
note  was  generally  brought  in  the  name  of  the  indorsee.  Under  the  Code,  the 
action  must  now  be  brought  in  the  name  of  the  real  party  in  interest. 

1  Leavitt  v.  Putnam,  3  Comst.  R.,  494;  8  Wend.,  76. 

•Byles  on  Bills,  287-291. 

4  Baxter  v.  Little,  and  the  same  v.  Harrison,  6  Met.,  7;  see  The  Bank  of 
Niagara  v.  McCracken,  18  John.  R.,  498;  Jefferson  Co.  Bank  v.  Chapman,  19 
John.  R.,  822;  Haxtunv.  Bishop,  8  Wend.  R.,  13. 


262  BILLS    OF    EXCHANGE  AND  PROMISSORY    NOTES. 

fixed  by  the  laws  of  this  state,  i  If  made  in  Illinois,  no 
matter  where  its  enforcement  is  sought,  it  is  to  be  carried  into 
effect  according  to  the  law  of  that  state.  2  The  rule  is  a  part 
of  the  public  law,  and  the  reason  on  which  it  is  founded  is 
obviously  this :  the  parties  contract  with  reference  to  the  law 
of  the  state  in  which  the  agreement  is  made;  and  that  law 
gives  a  particular  force  and  effect  to  the  contract,  and  imposes 
certain  restrictions  and  modifications  upon  it,  so  that  the  same 
contract  made  in  different  countries  creates  different  obliga- 
tions and  rights.  3  In  one  state,  for  instance,  the  indorser  of  a 
negotiable  note  is  liable  as  a  surety;  4  in  another,  he  is  liable 
on  condition  that  the  maker  refuses  to  pay  it  on  presentment 
when  it  becomes  due,  and  he  is  duly  notified  of  the  non-pay- 
ment; 5  while  in  another,  he  is  not  liable  until  the  holder  has 
exhausted  his  remedy  thereon  against  the  maker.  6 

The  form  in  which  bills  of  exchange  and  promissory  notes 
are  drawn,  suggests  the  particular  mode  or  manner  in  which 

1  Aymar  v.  Sheldon,  12  Wend.  R.,  439. 

*  Williams  v.  Wade,  1  Metcalf  R.,  82. 

In  Aymar  v.  Sheldon,  Nelson  J.,  says  :  "  The  contract  of  indorsement  was 
made  in  this  case,  and  the  execution  of  it  contemplated  by  the  parties  in  this 
state;  and  it  is  therefore  to  be  construed  according  to  the  laws  of  New-York. 
The  defendants  below,  by  it,  here  engage  that  the  drawees  will  accept  and  pay 
the  bill  on  due  presentment,  or  in  case  of  their  default  and  notice,  that  they 
will  pay  it.  All  the  cases  which  determine  that  the  nature  and  extent  of  the 
obligation  of  the  drawer  are  to  be  ascertained  and  settled  according  to  the  law 
of  the  place  where  the  bill  is  drawn,  are  equally  applicable  to  the  indorser; 
for.  in  respect  to  the  holder,  he  is  a  drawer." 

In  Williams  v.  Wade,  the  note  declared  on  was  made  and  indorsed  in  Illi- 
nois, and  the  court,  by  Ch.  J.  Shaw,  held  the  contract  of  indorsement 
governed  by  the  law  of  that  state.  "  By  the  law  of  Illinois,  the  indorser  is 
liable  only  after  a  judgment  obtained  against  the  maker;  and  as  no  such  judg- 
ment appears  to  have  been  obtained  on  this  note,  the  condition  upon  which 
alone  the  plaintiff  may  sue  is  not  complied  with,  and  therefore  the  action  can- 
not be  maintained." 

1  Story's  Conflict  of  Laws,  222,  261,  263,  282.  284,  288,  298. 

4  The  North  Carolina  act  of  1827,  makes  the  indorsers  of  negotiable  notes 
liable  as  sureties,  where  the  note  is  made  and  indorsed  in  that  state.  Ingersol 
v.  Long,  4  Dev.  and  Batt.,  293. 

4  Cayuga  Co.  Bank  v.  Warden,  1  Comst.  R.,  413. 

8  Howell  v.  Wilson,  2  Blackf.,  418.  This  is  the  rule  in  Virginia,  Clark  v. 
Young,  1  Cranch,  181;  Violett  v.  Patton,  5  id.  142;  Roberts  v.  Kilpatrick, 
6  Stew,  and  Port.,  96. 


INDORSEMENT  AND  TRANSFER.  263 

they  are  transferable :  if  made  payable  to  bearer,  they  are 
transferable  by  delivery;  if  made  payable  to  the  order  of  a 
person  named  in  them,  they  are  transferable  by  indorsement 
and  delivery;  that  is  to  say,  by  his  order  indorsed  on  the 
instrument,  i 

The  indorsement  of  a  promissory  note  or  bill  of  exchange 
is,  as  we  have  shewn,  in  substance  and  legal  effect  a  new  con- 
tract; and,  since  it  is  to  be  enforced  every  where  according  to 
the  lex  loci  contractus,  the  nature  and  extent  of  the  indorser's 
liability  must  be  ascertained  from  a  knowledge  of  the  law  of 
the  place  where  his  engagement  was  made.  2  The  same  may 
be  said  in  regard  to  the  undertaking  entered  into  by  the 
drawer  and  acceptor  of  bills.  Accordingly,  where  a  bill  is 
drawn  in  one  state  and  indorsed  in  another,  and  accepted  and 

1  Mr.  Chitty  gives  the  following  table  of  forms  used  in  the  indorsement  of 
negotiable  paper  : 

1.  Indorsement  by  drawer  or  payee  in  Hank.    "  James  Atkins." 

2.  The  like  by  a  partner.     "  Atkins  &  Co,"  or  "  For  self  and  Thompson. 
James  Atkins." 

3.  The  like  by  an  agent.    "  Per  procuration  James  Atkins.    John  Adams;" 
or  "As  agent  for  James  Atkins.     John  Adams." 

4.  Qualified  indorsement  to  avoid  personal  liability.     "  James  Atkins,  sans 
recourse,"  or  "  James  Atkins,  with  intent  only  to  transfer  my  interest,  and 
not  to  be  subject  to  any  liability  in  case  of  non-acceptance  or  non-payment." 

5.  Indorsement  in  full  or  special.    "  Pay  John  JJalloway,  or  order.    James 
Atkins." 

6.  Restrictive  indorsement  in  favor  of  indorser.    "  Pay  John  Halloway,  for 
my  use.    James  Atkins;''  or  "  Pay  John  Halloway,  for  my  account.    James 
Atkins." 

7.  Restrictive  indorsement  in  favor  of  indorsee  or  a  particular  person  only. 
"  Pay  G.  S.  only.    James  Atkins;"  or  "  The  within  must  be  credited  to  A.  B. 
James  Atkins." 

8.  Indorsement  of  a  foreign  bill,  dated,  stating  name  of  indorsee,  and  valid, 
and  an  besoin,  and  sans  protet.    "  Payee  La  Fayette  freres,  ou  ordre,  valour 
recue  en  argent,  or  en  merchandises,  or  en  compto.    James  Atkins." 

A  Londre,  18  Juin,  A.  D.,  1831. 

Au  besoin  chez  Messrs. ,  Rue  ,  Paris.  Retour  sans 

Protet." 

1  12  Wend.  R.,  439.  As  the  law  merchant  prevails  in  the  more  commercial 
portions  of  the  country,  while  in  several  of  the  states  the  liability  of  the 
indorser  is  very  much  restricted  by  statutory  enactments,  our  plan  is  to  state 
the  general  principle  in  the  text,  and  mention  the  departures  from  it  in  tho 
form  of  notes. 


264  BILLS   OF    EXCHANGE  AND    PROMISSORY  NOTES. 

dishonored  in  a  third,  the  rights  of  the  holder  can  only  be 
secured  by  a  compliance  with  the  law  of  three  different,  and, 
as  to  each  other,  foreign  and  independent  states,  i  If  fortu- 
nately the  law  merchant  prevails  in  each,  it  is  easy  for  him  to 
learn  what  steps  are  necessary  to  be  taken  to  protect  his  right 
of  property  in  the  bill  and  insure  its  collection.  On  the  other 
hand,  where  the  law  is  modified  by  statute,  and  framed  in  one 
state  with  the  primary  design  of  accommodating  a  strictly 
agricultural  community,  and  in  another  so  as  to  advance  the 
interests  of  commerce,  the  holder  of  such  paper  is  often  under 
the  necessity  of  investigating  the  laws  of  conflicting  jurisdic- 
tions, in  order  to  adjust  his  conduct  to  the  requirements  of 
this  or  that  state  polity.  2 

1  Slacum  v.  Pomery,  6  Cranch  R.,  221;  Powers  v.  Lynch,  3  Mass.  R.,  77; 
12  Wend.,  439;  1  Metcalf  R..  82. 

8  It  may  be  useful  to  state  here  the  law  of  the  different  states,  affecting  the 
contract  of  indorsement,  and  give  a  brief  abstract  of  the  statutes  defining  the 
rights  of  parties  to  bills  of  exchange  and  promissory  notes. 

In  MAINE  the  effect  of  an  indorsement  in  blank,  is  to  transfer  the  note, 
and  to  impose  a  conditional  liability  upon  the  indorser,  McDonald  v. 
Bailey,  14  Maine  R.,  101,  and  the  condition  is  fulfilled  by  making  a  de- 
mand of  payment  on  the  maker,  and  giving  the  indorser  due  notice  of  non- 
payment. McDonald  v.  Smith,  id.  99.  "  The  drawer  of  an  inland  bill  of 
exchange  and  the  indorser  of  a  promissory  note,  as  well  as  the  acceptor 
and  maker,  are  entitled  to  three  days  of  grace,  by  the  statute  of  1824, 
ch.  272,  when  the  bill,  or  note,  has  been  discounted  by  a  bank,  or  left 
there  for  collection."  Packard  v.  Valentine,  13  Maine  R.,  412. 

In  NEW  HAMPSHIRE,  in  order  to  charge  the  indorser  of  a  promissory 
note,  it  must  appear  that  a  demand  of  payment  has  been  duly  made  upon 
the  maker;  and  that  notice  thereof  and  of  its  non-payment,  and  that  the 
holder  relies  upon  the  indorser  for  payment,  has  been  seasonably  given  to 
the  indorser;  or  that  demand  and  notice  has  been  waived  by  him,  or  the 
want  thereof  excused.  Lawrence  v.  Langley,  14  N.  Hamp.,  70;  vol.  2, 
second  series.  The  demand  should  be  made  on  the  last  day  of  grace;  an 
earlier  demand  is  insufficient  to  charge  the  indorser.  Leavitt  v.  Simes,  3 
N.  II.  Rep.,  14. 

In  VERMONT,  the  obligation  of  the  indorser  is  conditioned  that  the 
holder  will  present  the  bill,  at  maturity,  to  the  acceptor  for  payment,  and 
in  case  of  non-payment  give  notice  to  the  indorser;  but  the  notice  may 
be  sent  by  mail,  addressed  to  him  at  the  town  post  office,  in  the  town 
where  he  resides,  and  it  will  be  sufficient,  even  though  he  resides  nearer 
to  another  post  office  than  he  does  to  that.  Bank  of  Manchester  v.  Slason, 
13  Verm.  R.,  334.  And  a  waiver  of  notice  is  not  a  waiver  of  demand 


INDORSEMENT    AND   TRANSFER.  265 

Where  the  law-merchant  prevails,  the  indorsement  of  a  bill 
or  note  in  blank,  or  in  full  without  restriction  or  qualification, 
passes  the  interest  and  property  therein  to  the  indorsee,  and 
is  an  undertaking  that  the  bill  or  note  shall  be  duly  honored, 
and  that  if  it  is  not,  and  the  indorser  has  due  notice  of  the 
dishonor,  he  will  pay  the  amount  to  the  indorsee,  i  And  a 
right  of  recovery  accrues  against  the  indorser  as  soon  as  the 
bill  or  note  becomes  due,  on  compliance,  with  the  conditions 

1  Chitty  on  Bills,  241 ;  Story  on  Promissory  Notes,  §  135,  and  on  Bills,  $  224, 
225.  Mr.  Justice  Story  says:  "  The  indorsement  of  a  note,  in  contemplation 
of  law,  amounts  to  a  contract  on  the  part  of  the  indorser  with  and  in  favor  of 
the  indorsee  and  every  subsequent  holder,  to  whom  the  note  is  transfered; 
1.  That  the  instrument  itself,  and  the  antecedent  signatures  thereon,  are  gen- 
uine; 2  That  he,  the  indorser,  has  a  good  title  to  the  instrument;  8.  That 
he  is  competent  to  bind  himself  by  the  indorsement,  as  indorser;  4.  That  the 
maker  is  competent  to  bind  himself  to  the  payment,  and  will,  upon  due  pre- 
sentment of  the  note,  pay  it  at  maturity,  or  when  it  is  due;  5.  That  if,  when 
duly  presented,  it  is  not  paid  by  the  maker,  he,  the  indorser,  will  upon  due  and 
reasonable  notice  given  him  of  the  dishonor,  pay  the  same  to  the  indorsee  or 
other  holder." 

The  engagement  of  the  indorser  may  in  a  general  sense  be  said  to  include 
these  several  undertakings;  but  it  is  evident  that  they  are  all  resolvable  into 
one,  namely,  that  he  will  pay  the  note  if  the  maker  does  not,  and  be  is  pro- 
perly notified  of  the  non-payment.  A  stipulation  that  he  is  competent  to  bind 
himself  as  an  indorser,  would  be  of  little  avail,  if  he  were  in  fact  neither  com- 
petent to  stipulate  nor  to  indorse.  By  his  indorsement,  he  asserts  the  note  to 
be  genuine,  and  that  he  has  the  title  to  it;  but  suppose  a  previous  indorse- 
ment has  been  forged,  so  that  the  title  fails,  what  in  that  case  is  his  liability  ? 
Clearly  he  is  answerable  as  an  indorser  to  his  indorsee  and  to  every  subsequent 
holder,  the  same  as  if  the  note  had  been  genuine ;  unless  it  can  be  shewn  that 
he  was  guilty  of  a  fraud  in  the  transfer,  and  then  he  would  be  answerable  on 
the  contract,  and  also  in  an  action  of  tort.  Chitty  on  Bills,  242. 


upon  the  maker;  so  held  where  the  defendant  indorsed  and  transfered  a 
promissory  note,  "  waiting  notice."  Buchanan  v.  Marshall,  '2.  Vi-rm., 
561;  1  McCord,  339;  6  Mass.,  524.  In  this  state,  where  a  person  who  is 
not  otherwise  a  party  to  a  note  indorses  his  name  upon  the  back  of  it,  he 
assumes  the  same  obligation  as  if  he  wrote  his  name  upon  the  face  of  the 
instrument,  and  may  be  sued  as  a  maker  of  the  note;  but  the  signature 
being  blank,  he  may  shew  by  parol  evidence  the  obligation  assumed  by 
him  at  the  time  of  signing;  so  held  in  the  case  of  a  negotiable  note  in- 
dorsed by  the  defendant  sometime  after  the  making  of  the  note,  and  after 
it  had  been  indorsed  by  the  payees.  Sylyester  T.  Downer,  20  Venn.  R., 
355;  6  id.  642;  9  id.  345;  14  id.  228;  16  id.  554. 

15 


266  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

precedent  to  his  liability;  namely,  making  due  presentment 
for  payment  and  giving  to  the  indorser  due  notice  of  non- 
payment;! or  in  the  case  of  a  foreign  bill,  having  it  duly 
protested  and  notice  thereof  given  to  the  antecedent  parties.  2 
We  shall  better  understand  the  contract  of  indorsement  by 
considering  more  particularly  the  modes  in  which  it  may  be 
executed.  And  first  let  us  observe,  that  what  is  true  in 
respect  to  the  body  of  the  instrument,  is  true  also  in  respect 
to  the  indorsement;  namely,  that  no  set  form  of  words  is 
essential  to  be  used.  3  The  mere  signature  of  the  party 
making  it,  is  in  general  sufficient;  and  it  is  certainly  the  most 

1  Cuyler  v.  Stevens,  4  Wend.  R.,  566;  1  Comst.  R.,  413. 

5  Story  on  Bills,  §  273. 

*  Hill  v.  Lewis,  Holt,  117;  Pinckney  v.  Hall,  Lord  Raym.,  176. 


In  MASSACHUSETTS  also,  the  law-merchant  prevails,  and  the  indorser  is 
liable  only  on  the  usual  condition  that  the  note  is  presented  for  payment, 
and  due  notice  of  non-payment  given  to  him.  The  Boston  Bank  v. 
Hodges,  9  Pick.  R.,  420.  A  notice  of  non-payment  given  before  demand, 
though  made  on  the  same  day,  is  insufficient.  But  it  is  sufficient,  if  given 
the  day  after  a  demand,  notwithstanding  it  is  later  by  one  day  than  it  is 
the  custom  of  the  bank  having  the  note  for  collection  to  give  the  notice, 
according  to  its  usual  course  of  doing  business.  Grand  Bank  v.  Blan- 
chard,  23  Pick.  R.,  305. 

CONNECTICUT.  Promissory  notes  for  the  amount  of  thirty-five  dollars 
or  more,  payable  to  any  person  or  his  order  or  to  the  bearer,  are  assign- 
able and  negotiable  as  inland  bills.  R.  S.,  693,  compiled  in  1854.  It  is  a 
principle  received  everywhere,  that  it  is  incumbent  on  the  holder  of  a  note 
or  bill  to  shew  affirmatively,  that  notice  of  non-payment  was  given  in  due 
time:  it  is  a  condition  precedent  to  a  right  to  recover,  in  ordinary  cases, 
against  an  indorser;  and  the  onus  of  proving  it  lies  upon  the  plaintiff. 
Lockwood  v.  Crawford,  18  Conn.  R.,  362.  The  indorsement  is  a  transfer 
of  the  title,  and  imports  a  future  liability  on  the  part  of  the  indorser  to 
pay  the  note  or  bill,  in  case  it  is  dishonored  and  he  is  properly  notified. 
A  delivery  of  the  instrument  is  necessary  to  complete  the  transfer.  Clark 
v.  Sigourney,  17  Conn.  R.,  511.  In  the  case  of  a  note  not  negotiable  pay- 
able on  demand  or  on  time,  a  blank  indorsement  imports  an  engagement 
by  the  indorser,  that  the  note  is  due  and  payable  according  to  its  tenor; 
that  the  maker  shall  be  of  ability  to  pay  it,  when  due;  and  that  it  is  col- 
lectable by  the  use  of  due  diligence.  Castle  v.  Candee,  16  Conn.  R.,  224; 
4  Conn.  R.,  527;  5  id.  175.  So,  also  an  indorsement  in  blank  on  a  nego- 
tiable promissory  note,  made  by  a  stranger  to  the  instrument,  for  the 


INDORSEMENT    AND  TRANSFER.  267 

concise  mode  of  transfering  an  interest,  or  creating  a  contract, 
that  could  possibly  be  invented,  i  The  word  itself  imports 
a  writing  on  the  back  of  the  note  or  bill;  but  the  law  does 
not  allow  the  etymological  signification  of  words  to  prevail 
over  the  meaning  and  intention  of  the  persons  using  them. 
On  the  contrary,  it  holds  the  indorsement  good,  though  made 
on  the  face  of  the  bill  or  note,  or  on  a  separate  piece  of  paper 
annexed  to  it,  called  an  allonge.  2  The  paper  so  attached 
becomes  in  fact  a  part  of  the  instrument. 

When  the  indorser  simply  writes  his  name  on  the  back  of 
negotiable  paper,  it  is  called  an  indorsement  in  blank,  or  a 
blank  indorsement :  and  when  the  indorsement  mentions  the 

'Chitty  on  Bills,  227;  Story  on  Notes,  §  121. 
1  Folger  v.  Chase,  18  Pick.  R.,  63. 


better  security  of  the  payee,  imports  the  same  contract  as  the  blank 
indorsement  of  a  note  not  negotiable.  Perkins  v.  Catlin,  11  Conn.  R., 
213.  Prior  to  1811,  promissory  notes  were  not  negotiable  in  Connecticut; 
in  that  year  a  statute  was  passed,  making  notes,  properly  executed,  given 
for  the  sum  of  thirty -fire  dollars,  or  more,  negotiable  and  assignable  as 
inland  bills  of  exchange.  11  Conn.  R.,  213.  A  note  not  negotiable,  and 
not  purporting  on  its  face  to  be  for  value  received,  does  not  imply  a  con- 
sideration, but  the  same  must  be  alleged  and  proved;  it  is  otherwise  in 
respect  to  negotiable  notes.  Bristol  v.  Warner,  19  Conn.  R.,  7;  see 
statutes  of  Conn.,  compilation  of  1854,  page  693;  R.  S.  of  1849,  p.  515. 

RHODE  ISLAND.  Notes  for  the  payment  of  money  only,  made  payable 
to  order  or  be«rer,  are  assignable  or  indorsable  over  in  the  same  manner 
as  bills  of  exchange  are  or  may  be,  according  to  the  custom  of  merchants; 
and  the  assignee  or  indorsee  of  such  negotiable  note  may  maintain  an 
action  against  the  maker  or  any  prior  indorser  for  the  recovery  of  the 
amount  due  thereon.  Public  Laws  of  R.  I.,  revised  and  adopted  in  1844, 
p.  287. 

NKW-YOBK.  "All  notes  in  writing,  made  and  signed  by  any  person, 
whereby  he  shall  promise  to  pay  to  any  other  person,  or  his  order,  or  to 
the  order  of  any  other  person,  or  unto  the  bearer,  any  sum  of  money 
therein  mentioned,  shall  be  due  and  payable  as  therein  expressed;  and 
shall  have  the  same  effect,  and  be  negotiable  in  like  manner,  as  inland  bills 
of  exchange,  according  to  the  custom  of  merchants."  Every  such  note 
may  be  signed  by  an  agent;  and  the  word  "  person  "  includes  every  cor- 
poration capable  of  making  contracts.  The  payees  and  endorsees  of  every 
such  note  payable  to  them  or  their  order,  and  the  holders  of  every  such 
note  payable  to  bearer,  may  bring  actions  thereon  against  the  makers  and 


268  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

name  of  the  person  in  whose  favor  it  is  made,  it  is  called  an 
indorsement  in  full,  or  a  full  indorsement,  i 

Each  of  these  modes  of  indorsement  has  its  advantages. 
After  an  indorsement  in  full,  none  but  the  indorsee  or  person 
to  whom  it  is  ordered  paid  can  demand  its  payment;  and 
moreover,  he  himself  can  only  transfer  the  bill  or  note  as  nego- 
tiable paper  by  adding  his  own  indorsement  in  writing.  2  This 
mode  of  indorsement  is  therefore  very  generally  adopted 
among  business  men  to  insure  safety  in  the  transmission  of 
negotiable  paper.  3  Thus  where  a  bill  is  drawn  in  Chicago, 
on  the  city  of  New- York,  and  it  is  necessary  for  the  payee  to 

1  Bayley  on  Bills,  67,  edition  of  1826. 

^Burdick  v.  Green,  15  John.  R  ,  247.  This  is  the  general  rule;  but  a  nego- 
tiable note  or  bill  may  be  assigned  without  indorsement,  subject  to  all  the 
equities.  Hedges  v.  Sealy,  9  Barb.,  214;  Billings  v.  Jane,  11  id.  620. 

1  Bank  of  Utica  v.  Smith.  18  John.  R.,  231 . 


indorsers  respectively  in  like  manner  as  in  cases  of  inland  bills  of  exchange, 
and  not  otherwise.  Such  notes  when  made  payable  to  the  order  of  the 
maker  or  of  a  fictitious  person,  are  of  the  same  force  as  when  payable  to 
bearer.  Acceptances  are  to  be  in  writing  on  the  bill :  when  written  on 
another  piece  of  paper,  they  bind  only  in  favor  of  the  person  to  whom 
shown.  An  unconditional  promise  in  writing  to  accept,  is  a  good  accep- 
tance in  favor  of  a  person  acting  on  the  faith  thereof  for  value. 

The  drawee  must  accept  on  the  bill;  a  refusal  subjects  the  bill  to  protest 
for  non-acceptance. 

The  statute  does  not  take  from  any  one  his  right  of  action  on  a  valid 
promise  to  accept. 

If  the  drawee  destroys  or  refuses  to  return  a  bill  delivered  to  him  for 
acceptance,  he  is  deemed  to  have  accepted  the  same. 

2  R.  S.,  51,  52,  53,  54,  3d  ed.  The  liability  of  the  indorser  is  the  same 
as  under  the  law  merchant. 

NEW  JERSEY.  At  an  early  day  this  State  re-enacted  substantially  the 
English  statute  making  promissory  notes  assignable  and  indorsable  over 
in  the  same  manner  as  inland  bills  of  exchange;  with  a  proviso  that  just 
set-offs  should  be  allowed  against  the  assignor  until  notice  of  the  assign- 
ment should  be  given,  unless  the  note  should  be  expressly  drawn  "with- 
out defalcation  or  discount."  The  same  act  makes  an  inland  bill  of  ex- 
change received  in  payment  of  a  former  debt,  an  extinguishment  of  it  in 
case  the  holder  should  neglect  to  obtain  and  insure  its  payment.  Laws 
of  New  Jersey,  revised  and  published  in  1821.  The  act  above  referred  to 
was  passed  in  1799. 


INDORSEMENT    AND  TRANSFER.  269 

send  it  forward  by  mail  for  collection,  he  can  do  so  without 
incurring  any  danger  of  its  being  lost  or  stolen  on  the  way, 
by  indorsing  it  specially  to  the  order  of  his  correspondent  in 
the  city  where  it  is  payable,  i 

On  the  other  hand,  where  the  payee  of  a  bill  of  exchange 
or  negotiable  note  indorses  it  in  blank,  the  instrument  is  trans- 
ferable by  delivery;  for  there  is  no  difference  between  a  note 
indorsed  in  blank,  and  one  payable  to  bearer.  2  When,  there- 
fore, a  bill  so  indorsed  is  transmitted  from  one  place  to 
another,  the  holder  incurs  the  risk  of  its  being  stolen  or  lost 
on  the  route,  and  afterwards  negotiated  to  a  bona  fide  pur- 
chaser for  value;  so  held  where  a  bill  was  drawn  by  the 
defendant  payable  to  Ingham  or  order,  and  Ingham  indorsed 

1  Davis  draws  a  bill  at  Brockport  on  New- York,  payable  to  the  order  of 
Patcliin,  and  Patchin  indorses  it,  "  pay  Richard  Yates,  or  order."  and  though 
it  should  be  stolen  on  the  way  to  New-York,  no  one  but  Yates  himself,  or  the 
person  to  whom  he  indorses  it,  can  demand  the  money  on  it.  Chautauque  Co. 
Bank  v.  Davis,  21  Wend.  R.,  584. 

*  Bayley  on  Bills,  67.  "A  blank  indorsement,  so  long  as  it  continues  blank, 
makes  a  bill  or  note  payable  to  the  bearer." 


DELAWARE.  In  this  State,  all  bonds,  specialties,  and  notes  in  writing, 
payable  to  any  person,  or  order,  or  assigns,  may  be  assigned  or  indorsed, 
and  the  assignee  or  indorsee,  his  executor,  administrators  or  assigns,  may 
again  assign  or  indorse  the  same,  and  so  on,  as  often  as  may  be  desired; 
and  the  assignees,  or  indorsees,  or  their  executors,  or  administrators,  may 
in  their  own  name  sue  for  and  recover  the  money  thereon ;  but  the  assign- 
ment of  specialties  must  be  made  under  seal  and  before  at  least  two  wit- 
nesses. Assignors  and  indorscrs  cannot  release  or  discharge  demand  after 
assignment.  Checks,  notes,  drafts  and  bills  payable  without  time,  or  at 
sight,  are  due  and  payable  on  presentment,  without  grace.  LAWS  of  Del- 
aware, revised  Code  of  1852,  p.  183,  184. 

PENNSYLVANIA.  In  Bulloch  v.  Wilcoz,  it  was  decided  in  1838,  that  a 
note  payable  to  a  certain  person  or  bearer  was  to  be  treated  as  a  negotia- 
ble note;  and  that  the  person  taking  it  in  good  faith  for  value,  was  entitled 
to  recover  on  it  against  the  maker,  free  from  all  subsisting  equities  bet  ween 
the  original  parties.  7  Watts,  328.  In  1849,  a  statute  was  passed  provi- 
ding: 1.  That  in  actions  brought  upon  or  for  the  recovery  of  the  amount 
due  on  any  promissory  note,  post  note,  note  of  hand,  due  bill,  bill  of  ex- 
change, draft,  order,  check,  or  other  instrument  in  writing  in  the  nature 
thereof,  no  defence  shall  be  allowed  for  want  of  proper  and  timely  demand 
of  payment  or  acceptance,  or  protest  and  notice  of  non-acceptance  or  non- 


270  BILLS    OF  EXCHANGE  AND    PROMISSORY    NOTES. 

it  in  blank,  after  which  it  was  stolen  and  transferee!  to  the 
plaintiff,  who  took  it  in  good  faith  and  for  a  valuable  conside- 
ration, i  But  where  the  payee  of  a  note  or  bill  transfers  it 
by  an  indorsement  in  blank,  the  indorsee  is  thereby  authorized 
to  fill  it  up  with  what  name  he  pleases,  thus  converting  it  into 
a  full  or  special  indorsement.  2  A  full  or  special  indorse- 
ment is  generally  written  in  this  manner :  "  Pay  A.  B.  or 
order."  But  it  is  held  that  an  indorsement  in  these  words, 
"  Pay  the  within  to  A.  Thatcher,  value  received,"  does  not 
restrict  the  negotiability  of  the  instrument,  though  made  after 
it  has  been  dishonored.  3  The  indorsement  follows  the  nature 
of  the  original  note,  which  being  itself  negotiable,  a  direction 
by  the  payee  to  pay  it  to  any  person  named,  is  a  direction  to 

'Peacock  v.  Rhodes,  Doug.,  633. 

*  Lovell  v.  Evertson,  11  John.  R.,  62;  "Williams  v.  Matthews,  3  Cowen  R., 
252. 

*  Leavitt  v.  Putnam,  1  Sand.  R.,  199;  S.  C.,  3  Comst.  R.,  494. 


payment,  unless  the  place  where  the  demand  is  to  be  made  or  notice  serv- 
ed or  given,  or  the  names  and  residences  or  places  of  business  of  the  par- 
ties thereto  are  legibly  set  forth  therein.  2.  That  when  such  instruments 
do  not  specify  the  place  of  demand  and  notice,  or  the  residences  or  places 
of  business  as  above  mentioned,  the  demand  may  be  made  and  notice  given 
either  before  or  after  the  same  become  due.  3.  That  such  omissions  shall 
operate  to  make  such  notes,  due  bills,  &c.,  payable  and  protestable  where 
they  are  dated,  or  if  not  dated,  then  where  they  are  held  for  collection; 
and  shall  operate  to  make  bills  of  exchange,  drafts,  orders,  and  checks 
acceptable,  payable  and  protestable  at  the  place  where  they  are  addressed. 
4.  That  a  party  receiving  forged  paper  may  recover  back  the  amount  paid 
thereon.  5.  That  bills  of  exchange,  drafts,  orders,  checks,  promissory 
notes,  &c.,  made,  drawn  or  indorsed  to  order  within  the  commonwealth, 
are  declared  negotiable  by  indorsement,  and  recoverable  by  the  indorsee 
in  his  own  name,  in  the  same  manner,  and  to  all  intents  and  purposes,  as 
bills  of  exchange  and  promissory  notes  formerly  drawn  and  ordinarily  in 
use  and  negotiable  in  the  State,  are  by  law  recoverable  therein.  Laws  of 
Pennsylvania,  Dunlop's  ed.,  p.  1156-7. 

MARYLAND.  The  bona  fide  holder  of  a  negotiable  note  for  a  valuable 
consideration  without  notice  of  facts  which  affect  its  validity  as  between 
antecedent  parties,  if  he  takes  it  by  indorsement  before  it  becomes  due, 
acquires  a  valid  title  and  may  recover  upon  it,  although  as  between  antece- 
dent parties  the  transaction  maybe  invalid.  Gwynn  &  Co.  v.  Lee,  9  Gill. 
R.,  138,  decided  in  1850. 


INDORSEMENT    AND    TRANSFER.  271 

pay  it  to  such  person  or  his  order,  according  to  the  tenor  of 
the  note  itself,  i  To  make  the  indorsement  restrictive,  it  is 
necessary  that  it  should  contain  express  words  of  restriction. 

When  a  bill  or  note  is  transfered  by  a  blank  indorsement, 
and  the  indorsee  fills  it  up,  making  it  payable  to  a  particular 
person,  for  the  purpose  of  collection,  and  the  bill  or  note  is 
returned  to  him  dishonored,  he  has  the  right  to  strike  out  of 
the  indorsement  all  but  the  name  of  the  indorser,  leaving  it 
an  indorsement  in  blank.  2  And  though  it  has  been  several 
times  successively  transfered  for  the  same  purpose,  the  owner 
has  the  right,  under  the  decisions,  to  erase  these  indorsements 
and  bring  an  action  on  the  instrument  in  his  own  name.  3 

1  Eddie  v.  The  East  India  Co.,  2  Burr.,  1216;  3  Comst.  R.,  494. 

•  Bank  of  Utica  v.  Smith,  18  John.  R.,  220;  21  Wend.,  684. 

'  Dugan  r.  The  United  States,  3  Wheat.,  172.  The  opinion  in  this  case  goes 
the  length  of  holding  that  if  any  person  indorse  to  another  a  bill  of  exchange, 
whether  for  value  or  collection,  and  shall  come  again  to  the  possession  of  it, 
he  is  to  be  regarded,  unless  the  contrary  appear,  as  a  bona  fide  holder,  and 
may  recover  without  re-indorsement.  18  John.  R.,  230;  and  21  Wend.,  684; 
see  also,  Mottram  v.  Mills,  1  Sand.  R.,  87. 


By  an  act  passed  in  1826,  no  judgment  is  to  be  set  aside  that  has  been 
recovered  on  bills  of  exchange,  promissory  notes  or  other  negotiable 
instruments,  on  account  of  having  been  indorsed  in  blank.  See  Session 
Laws  of  1825,  p.  23.  See  Bell  v.  Hagertown  Bank,  7  Gill.  R.,  216.  The 
rule  in  regard  to  giving  notice  of  non-payment  of  a  draft  is  that  of  the 
law-merchant. 

The  contract  of  the  indorser  cannot  be  changed  into  any  thing  different 
by  overwiting  his  signature  with  a  promissory  note;  as  where  the  defen- 
dant wrote  his  name  on  the  back  of  a  note  payable  to  another  person,  and 
the  payee  wrote  over  the  signature  a  note  payable  to  him.  Hoffman  & 
Riger  v.  Coombs,  9  Gill.,  284. 

A  protest  of  a  notary  public  of  a  promissory  note  for  non-payment, 
or  of  a  bill  of  exchange,  whether  foreign  or  inland,  for  non-accep- 
tance or  non-payment,  is  prima  facie  evidence  of  such  non-payment  or 
non-acceptance  and  of  presentment  in  the  manner  stated  in  the  protest, 
including  the  fact  that  proper  notice  has  been  delivered,  or  sent  to  the 
parties  to  be  charged  thereon.  Session  Law«  of  1838,  ch.  253.  See  Barry 
v.  Crowley,  4  Gill.,  194. 

VIRGINIA.  In  this  state,  promissory  notes,  or  checks  for  money,  pay- 
able at  a  particular  bank,  or  office  thereof,  for  discount  and  deposit,  or  at 
a  savings  institution,  and  inland  bills  of  exchange  payable  in  the  state  are 


272  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTfcS. 

It  is  sometimes  said  that  a  blank  indorsement  gives  to  the 
indorsee  authority  to  write  over  it  what  he  pleases;  that  by 
itself  it  is  not  a  transfer  of  the  property  in  the  bill,  but  only 
a  power  to  write  over  the  signature  a  contract  of  indorse- 
ment, i  But  it  is  well  settled  that  the  signature  of  the  indor- 
ser  written  on  the  back  of  a  negotiable  note  or  bill  of  exchange 
is  in  itself  a  complete  and  perfect  indorsement;  2  and  that  a 
blank  indorsement,  though  it  authorises  the  indorsee  to  fill  it 
up  so  as  to  make  it  payable  to  any  person  he  pleases,  does  not 
give  him  authority  to  write  over  the  signature  any  other 
species  of  contract,  such  as  a  guaranty.  3  He  has  the  right  to 
fill  up  the  blank;  "  but  in  doing  it  he  is  not  at  liberty  to 
write  just  what  he  pleases  over  the  name,  but  is  bound  by 
mercantile  usage;  which  on  this  point  has  the  force  and  cer- 

1  Bayley  on  Bills,  67;  Chitty  on  Bills,  225,  230;  Theed  v.  Lovell,  2  Stra., 
1103;  12  Mod.,  244;  Lord  Raym.,  443. 

8  Grifforn  v.  Jacobs,  2  Miller,  (Louis.,)  192;  Gillman  v.  State  Bank,  2 
Scam. ,245;  Chewning  v.  Gatewood,  5  Howard,  (Miss.,)  552;  McDonald  v. 
Bailey,  14  Maine,  102. 

s  Seabury  v.  Hungerford,  2  Hill  R.,  80;  Farmer  v.  Rand,  14  Maine,  225, 
284;  Central  Bank  v.  Davis,  19  Pick.  R.,  373. 


deemed  negotiable,  and  may,  upon  being  dishonored  for  non-acceptance  or 
non-payment,  be  protested;  and  the  protest  is  evidence  of  dishonor  as  in 
case  of  a  foreign  bill  of  exchange.  An'd  an  action  of  debt  may  be  brought 
against  all  the  parties,  drawers,  indorsers  or  acceptors.  As  to  other 
instruments,  such  as  bonds,  notes  or  writings  not  negotiable,  the  assignee 
may  recover  thereon  in  his  own  name,  subject  to  a  set-off  of  all  just 
demands  against  either  himself  or  his  assignor  before  notice  of  the  assign- 
ment. But  only  joint  assignors  are  to  be  joined  as  defendants  in  one 
action.  Code  of  Virginia  published  in  1849,  p.  581,  582,  583.  The 
assignee  of  a  note  not  negotiable  is  bound  to  use  due  diligence  to  recover 
against  the  maker,  before  he  can  recover  against  the  assignor.  Caton 
&  Veale  v.  Lenox,  5  Rand.,  31;  4  Call.,  492;  5  Munf.,  388;  6  Leigh,  135, 
230. 

NORTH  CAROLINA.  Promissory  notes  for  the  payment  of  money  are 
made  negotiable  as  inland  bills  of  exchange;  and  bonds,  notes  and  bills 
for  the  payment  of  money,  with  or  without  seal,  and  whether  expressly 
made  payable  to  order  and  for  value  received  or  not,  are  assignable  over  in 
like  manner  as  inland  bills  of  exchange  are  by  custom  of  merchants  in 
England :  and  the  indorsee  may  sue  the  maker  of  the  instrument  or  the 
indorser.  Orders  for  the  payment  of  money  are  to  be  presented  for  accep- 


INDORSEMENT   AND  TRANSFER.  273 

tainty  of  law,  and  clearly  does  not  extend  to  a  waiver  of  any 
of  the  legal  conditions  of  indorsement."  i 

Where  a  person  puts  his  name,  in  blank,  on  the  back  of  a 
promissory  note,  he  may  be  held  liable  as  maker  or  guarantor, 
Avlun  there  is  an  agreement  to  that  effect, and  when  he  cannot 
be  charged  as  an  indorser.  2  This  is  allowed  in  order  to  pre- 
vent an  entire  failure  of  the  contract,  on  the  principle  ut  res 
magis  valeat  quam  pereat.  But  this  maxim  allowing  a  blank 
indorsement  to  be  so  construed,  does  not  apply  in  any  case 
where  the  person  making  it  can  be  charged  as  an  indorser.  3 
For  instance,  where  a  note  is  made  payable  to  a  particular 
person  or  bearer,  and  a  stranger  writes  his  name  on  the  back 
of  it,  and  it  is  then  delivered  to  the  payee,  it  is  held  that  such 
indorser  cannot  be  charged  as  a  maker  of  the  note,  nor  in  any 

1  Per  Morton,  J.,  in  Central  Bank  v.  Davis.  19  Pick.,  376,  holding  that  the 
indorsee  has  no  right  to  insert  over  the  name  a  waiver  of  notice  of  non-pay- 
ment. 

*  Josselyn  v.  Ames,  3  Mass.  R.,  274;  Nelson  v.  Dubois,  13  John.  R.,  176j 
Griswold  v.  Slocum,  10  Barb.,  402;  see  4  Selden,  207. 

•  2  Hill  R.,  84;  3  Hill  R..  233;  7  Hill  R.,  416;  .Ellis  v.  Brown,  6  Barb.  R., 
282;4Duer.,  45. 


tance  and  payment;  and  maybe  protested  for  non-acceptance,  so  as  to 
give  the  payee  an  action  against  the  drawer;  or  if  accepted,  an  action  may 
be  brought  thereon  against  the  acceptor.  Bills  of  exchange  payable  within 
the  state,  at  sight,  or  at  a  future  day  certain,  are  entitled  to  days  of  grace; 
but  neither  bills  of  exchange,  promissory  notes,  nor  drafts  payable  on 
demand  are  entitled  to  days  of  grace.  Bonds,  bills,  notes,  bills  of 
exchange,  and  liquidated  accounts  bear  interest  from  the  time  they  become 
due;  and  when  payable  they  bear  interest  from  the  time  when  they  are 
demandablc.  The  protest  of  a  notary  public,  of  a  justice  of  the  peace, 
clerk  of  a  court  of  record,  or  clerk  and  master,  is  prima  facie  evidence  of 
demand  made,  or  notice  given  as  stated  in  the  protest. 

The  indorsement  of  any  bill,  or  negotiable  bond,  or  promissory  note, 
unless  otherwise  expressed,  renders  the  indorser  liable  as  surety  to  any 
holder  of  such  bill,  bond  or  promissory  note;  and  no  demand  on  the 
maker  is  necessary  previous  to  an  action  against  the  indorser;  but  this 
provision  does  not  apply  to  foreign  and  inland  bills  of  exchange. 

Revised  Code  of  North  Carolina,  enacted  at  the  session  of  1854,  p.  110, 
111,  112. 

SOUTH  CAROUNA.  In  this  state  the  English  statute  making  promissory 
notes  assignable  and  indorsable  over  in  the  same  manner  and  with  the  like 


274  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

other  character  but  that  of  an  indorser.  i  On  the  same  ground, 
where  a  stranger  or  third  person  writes  his  name  on  the  back 
of  a  promissory  note  made  payable  to  the  order  of  the  payee, 
to  whom  it  is  afterwards  delivered,  it  is  decided  that  there  is 
nothing  in  such  an  indorsement  to  indicate  that  the  person 
making  it  means  to  be  considered  liable  in  any  other  character 
than  that  of  a  strictly  commercial  indorser;  the  payee  by 
indorsing  it  himself,  may  charge  him  as  a  second  indorser. 
This,  therefore,  is  the  contract  which  he  has  made  and  by 
which  he  is  bound.  2 

1  Dean  v.  Hall,  17  Wend.,  214.  "  There  is  no  legal  difference  between  a 
note  payable  to  bearer  and  one  payable  to  a  particular  person  or  bearer; 
neither  need  be  indorsed  to  make  it  negotiable.  Notes  payable  to  bearer,  to 
a  particular  person  or  bearer,  or  to  a  particular  person  or  order,  and  indorsed 
in  blank,  all  pass  by  delivery,  and  neither  need  be  indorsed  to  transfer  it  accord- 
ing to  the  law  merchant." 

a  Hall  v.  Newcomb,  3  Hill  R.,  233.  When  a  contract  cannot  be  enforced  in 
the  particular  mode  contemplated  by  the  parties,  the  courts,  rather  than 
suffer  the  agreement  to  fail  altogether,  will,  if  possible,  give  effect  to  it  in  some 
other  way.  But  they  never  make  contracts  for  parties,  nor  substitute  one  con- 
tract for  another.  This  was,  in  legal  effect,  regular  mercantile  paper,  upon 
which  the  defendant  contracted  the  obligation  of  an  indorser  within  the  law 
merchant ;  and  by  that  obligation  and  no  other,  he  is  bound.  Per  Bronson,  J., 
in  Seabury  v.  Hungerford,  2  Hill  R.,  80;  6  Barb.,  282;  Cottrell  v.  Conklin,  4 
Duer  R.,  45. 


effect  as  inland  bills  of  exchange,  was  re-enacted  at  an  early  day.  2  Stat- 
utes of  South  Carolina,  544,  edited  by  Thomas  Cooper,  and  published  in 
1837.  To  charge  the  indorser  of  a  note,  there  must  be  a  regular  demand 
made  of  the  maker  for  payment  and  notice  given  to  the  indorser.  Allwood 
v.  Haseldon,  2  Bailey  R.,  457.  And  even  a  special  indorsement  of  a 
promissory  note  before  it  becomes  due,  as  thus,  "  I  guarantee  the  pay- 
ment of  the  within  to  B.  &  D.,  for  value  received,"  does  not  dispense  with 
the  necessity  of  a  regular  demand  upon  the  maker,  and  notice  to  the 
indorser,  in  order  to  charge  the  latter.  Barrett  v.  May,  2  Bailey  R.,  1. 
The  demand  and  notice  must  be  made  and  given  just  the  same  to  charge 
the  indorser,  though  he  knows  the  maker  to  be  insolvent.  Jervey  v. 
Wilbur,  1  Bailey  R.,  453.  A  set-off  is  not  permitted  against  a  bona  fide 
holder  of  a  negotiable  note,  of  a  demand  held  by  the  maker  against  an 
intermediate  holder,  not  the  original  payee,  although  the  note  came  to  the 
plaintiff  after  it  was  due.  Perry  v.  Mays,  2  id.  354. 

GEORGIA.     Bonds  and  other  specialties,  promissory  notes,  and  liquida- 
ted demands  for  the  payment  of  money  or  property,  are  negotiable  by  in- 


INDORSEMENT  AND  TRANSFER.  275 

Where  a  negotiable  note  is  indorsed  in  blank  by  the  payee, 
it  becomes  assignable  by  delivery,  and  a  subsequent  holder 
can  strike  out  all  the  indorsements  except  the  first,  and  make 
title  under  that;  i  and  this  he  may  do,  notwithstanding  the 
bill  or  note  may  have  upon  it  subsequent  indorsements  in 
full.  -2  In  the  actual  course  of  business,  bills  and  notes  are 
daily  transmitted  from  the  holders  to  prior  parties,  without 
striking  out  the  special  indorsements;  and  each  indorser 
receiving  a  dishonored  bill  or  note,  deems  himself  authorized 
to  cancel  his  own  and  the  subsequent  indorsements.  Such  at 
least  is  a  common  practice  among  merchants  and  bankers;  3 
and  the  rule  of  law  on  the  subject  has  been  stated  in  a  lead- 
ing case  in  these  words  :  "  the  court  is  of  opinion,  that  if  any 
person  who  indorses  a  bill  of  exchange  to  another,  whether 

1  The  Watervliet  Bank  v.  White.  1  Denio  R.,  608;  Pentz  v.  Winterbottom, 
6  Denio  R.,  61;  1  Cowen  R.,  387;  3  id.  252. 

1  Gordon  v.  Nelson,  16  Louis.,  321;  Hale  v.  Bailey,  id.  213;  12  id.  619; 
Chitty  on  Bills,  230;  12  Mod.,  345;  Dolfus  T.  Frosch,  1  Denio  R.,  367. 

1  1  Sand.  R.,  40. 


dorscmcnt ;  unless  the  maker  of  the  instrument  expresses  in  it  the  inten- 
tion that  it  shall  not  be  negotiable.  Cobb's  Digest  of  the  Laws  of  Geor- 
gia, 519,  published  in  1851.  The  indorser  of  such  instruments  are  held, 
taken  and  considered  as  securities;  and  are  liable  thereon  without  anj 
proof  of  demand  or  notice;  and  may  be  sued  in  the  same  manner  and  in 
the  same  action  with  the  principal  or  maker  of  such  notes  or  other  instru- 
ments: not  so,  where  promissory  notes  are  given  for  the  purpose  of  nego- 
tiation at  any  chartered  bank,  or  deposited  there  for  collection.  But  the 
indorser  may  define  his  liability  in  the  act  of  indorsement.  And  any 
"security  or  indorser"  may,  if  he  thinks  proper,  after  the  note  or  instru- 
ment becomes  due,  require  the  holder  to  proceed  and  collect  the  same;  and 
if,  being  so  required,  the  holder  neglects  to  do  so  for  the  space  of  three 
months,  the  indorser  or  security  is  discharged.  One  who  signs  his  name 
to  a  bond,  note,  or  obligation,  adding  to  it  the  word  "security,"  is  to  be 
so  considered  without  other  evidence.  Cobb's  Digest,  694,  595. 

FLORIDA.  Promissory  notes  and  other  instruments  in  writing  are  de- 
clared by  statute  to  have  the  same  force  and  effect  as  bonds  and  writings 
under  seal;  and  the  plaintiff  suing  on  them  need  not  prove  their  execution 
unless  the  defendant,  by  his  plea,  denies  the  execution,  and  verifies  the 
plea  by  his  oath.  Thompson's  Digest  of  the  Laws  of  Florida,  330,  331, 
348.  The  indorsement  of  notes  conveys  the  title  and  right  of  action  there- 
on to  the  indorsee,  id.,  348. 


276 


BILLS  OF    EXCHANGE  AND   PROMISSORY    NOTES. 


for  value  or  for  the  purpose  of  collection,  shall  come  to  the 
possession  thereof  again,  he  shall  be  regarded,  unless  the  con- 
trary appear  in  evidence,  as  the  bona  fide  holder  and  pro- 
prietor of  such  bill,  and  shall  be  entitled  to  recover,  notwith- 
standing there  may  be  on  it  one  or  more  indorsements  in  full, 
subsequent  to  the  one  to  him,  without  producing  any  receipt 
or  indorsement  back  from  either  of  such  indorsers,  whose 
names  he  may  strike  from  the  bill,  or  not,  as  he  may  think 
proper."  i 

1  Dugan  v.  The  United  States,  3  Wheat.,  173.  This  rule  was  approved  in 
Norris  v.  Badger,  6  Cowen  R.,  455,  and  in  Dolfus  v.  Frosch,  1  Denio,  367, 
and  in  Mottram  v.  Mills,  1  Sand.  R.,  37;  see  also  cases  there  cited. 


ALABAMA.  Bills  of  exchange  and  promissory  notes  payable  in  money 
at  a  bank  or  private  banking  house,  are  governed  by  the  commercial  law; 
except  as  otherwise  specially  provided  :  and  all  other  instruments  payable 
in  money,  at  a  bank  or  private  banking  house,  are  governed  by  the  com- 
mercial law,  as  to  days  of  grace,  protest  and  notice;  but  no  days  of  grace 
are  allowed  on  any  contracts  except  those  above  mentioned.  §  1525, 
1526,  1527,  Code  of  1852. 

Bonds,  contracts,  and  writings  for  the  payment  of  money,  or  other 
thing;  or  for  the  performance  of  any  act  or  duty,  are  assignable  by 
indorsement,  so  as  to  authorise  an  action  thereon  by  each  successive 
indorsee.  All  contracts,  except  bills  of  exchange,  promissory  notes 
payable  in  money  at  a  bank  or  private  banking  house,  or  paper  issued  to 
circulate  as  money,  are  subject  to  all  payments,  set-offs  and  discounts, 
had  or  possessed  against  the  same  previous  to  notice  of  the  assignment 
thereof.  §  1530,  1531.  A  sufficient  notice  of  protest  for  non-acceptance 
or  non-payment  is  made  (by  mail,)  by  sending  the  notice  to  the  place 
where  the  person  to  be  charged  resided  at  the  time  of  drawing,  making  or 
indorsing  the  note,  bill  or  negotiable  instrument,  unless  he  specifies  on  the 
paper  the  place  where  it  is  to  be  sent.  §  1542. 

On  all  contracts  assigned  by  writing,  except  those  payable  in  money  at 
a  bank,  as  first  above  mentioned,  when  the  amount  is  over  fifty  dollars, 
in  order  to  charge  the  indorser  or  assignor,  a  suit  must  be  brought  against 
the  maker  as  soon  as  it  can  be  done  in  the  county  where  he  resides;  and 
an  execution  must  be  issued  against  him  returnable  at  the  next  court,  and 
returned  "  no  property."  §  1543.  In  cases  where  the  sum  is  less  than 
fifty  dollars,  the  suit  must  be  brought  within  thirty  days,  and  prosecuted 
in  the  same  manner.  §  1544.  The  indorser  or  assignor  may  extend  or 
waive  the  time  for  bringing  suit.  §  1545.  And  the  holder  is  in  certain 
cases  excused  by  law  from  prosecuting  suit  to  judgment,  as  where  the 
maker  does  not  reside  in  the  state,  cannot  be  found,  dies,  or  defeats  a 
judgment  by  a  good  defence.  §  1546. 


INDORSEMENT  AND  TRANSFER. 


277 


The  payee  or  indorsee  having  the  absolute  property  in  a 
bill  or  note  and  the  right  of  disposing  thereof,  has  the  power 
to  make  what  is  called  a  restrictive  indorsement,  precluding 
the  person  in  whose  favor  it  is  made  from  making  a  transfer 
so  as  to  give  a  right  of  action  against  either  the  person  making 
it,  or  any  of  the  antecedent  parties,  i  But  in  order  to  make 
an  indorsement  restrictive,  it  is  necessary  that  it  should  be  so 
drawn  as  to  negative  the  right  of  transfer  in  the  indorsee,  or 
so  as  to  give  him  a  bare  authority  to  receive  the  money.  2 
Thus,  an  indorsement  in  these  words,  "  pay  the  contents  to 
John  Halloway  only,"  prevents  the  bill  from  being  agaiii 
transfered;  and  an  indorsement,  "  pay  J.  H.,  for  my  use,"  or 
"  for  my  account,"  shews  plainly  that  the  indorser  does  not 
mean  to  part  with  the  absolute  property  in  the  bill,  and  is 
therefore  barely  an  authority  to  receive  the  money  upon  it.  3 

1  Bayley  on  Bills.  69-71 ;  2  Burr.  1216. 
1  Leavitt  v.  Putnam.  8  Comst.  R.,  494. 
1  1  Atk.,  247;  2  Burr.  1227;  Doug.,  627. 

Code  of  Albania,  p.  316,  317,  318,  319.  This  code  was  prepared  under 
the  direction  of  the  legislature,  and  adopted  in  February,  1852. 

LOUISIANA.  Promissory  notes  are  governed  by  the  commercial  law; 
and  the  holder  is  not  required  to  prove,  in  a  suit  against  the  maker  and 
indorser,  the  circumstances  under  which  he  acquires  a  negotiable  note, 
except  where  the  want,  failure  or  illegality  of  the  original  consideration  is 
clearly  shown,  and  in  the  case  of  a  lost  or  stolen  instrument.  Judson  v. 
Holmes,  9  Louis.  An.  R.,  20,  22,  27,  132.  When  the  owner  sues  on  a 
note  that  has  been  destroyed,  it  is  not  necessary  to  allege  and  prove  that 
the  destruction  was  advertised ;  the  rule  is  different  in  the  case  of  a  lost 
note.  Beebe  v.  McNeil,  8  id.,  130.  The  accommodation  indorser  holds 
himself  out  to  the  public,  by  his  signature,  as  absolutely  bound  to  every 
person  who  shall  take  the  note  for  value,  to  the  same  extent  as  if  that 
value  had  been  advanced  to  him  personally,  or  at  his  request.  Matthews 
T.  Rutherford,  7  id.,  225.  Any  words  that  shew  the  parties  to  a  note 
intended  to  make  it  negotiable,  will  operate  to  give  it  that  character,  as 
where  it  was  made  "payable  and  negotiable  at  the  Planters'  Bank."  Ba- 
con v.  Dahlgreen,  id.,  599.  The  mode  of  making  protest  and  serving  notice 
on  the  parties  to  be  charged,  is  specially  pointed  out  by  statute.  1  Bui- 
lard  and  Curry's  Digest,  41 ,  42,  43.  To  bind  the  indorser,  demand  should 
be  made  of  the  maker  of  a  note,  either  in  person  or  at  the  place  of  his  dom- 
icil.  Bigelow  v.  Keller,  6  Louis.  An.  Rep.,  59,  98.  Notice  sent  to  the 
indorser  that  the  note  has  been  protested  is  sufficient.  Id.,  100.  See 
Revised  Statutes  of  1856,  p.  43-46. 


278  BILLS    OF  EXCHANGE    AND    PROMISSORY  NOTES. 

It  imports  that  the  indorsee  receives  the  bill  for  a  special  pur- 
pose, and  as  a  trustee  for  the  party  indorsing;  and  is  equiva- 
lent to  a  direct  notice  to  every  person  to  whom  it  may  after- 
wards be  presented,  that  he  has  not  a  right  to  dispose  of  it  as 
his  own  property,  i 

"  Pay  the  contents  to  A.  B.,  being  part  of  the  consideration 
in  a  certain  deed  of  assignment  executed  by  the  said  A.  B., 
to  the  indorser  and  others,"  is  not  a  restrictive  indorsement, 
because  it  only  specifies  the  consideration  of  the  transfer,  and 
is  at  most  barely  a  surplusage  that  does  not  affect  the  subse- 
quent negotiability  of  the  bill.  2 

1  Sigourney  v.  Lloyd,  8  Barn,  and  Cress.,  622;  3  M.  and  Ry.,  58;  3  Younge 
and  J.,  229;  5  Bing.,  525;  3  Moore  and  P.,  229.  An  indorsement  in  these 
words,  "the  within  must  be  credited  to  Captain  Moreton  L.  Dahl,  value  in 
account,1'  was  held  restrictive.  Doug.,  637. 

*  Potts  v.  Reed,  6  Esp.  R.,  57;  7  Term  R.,  733. 


MISSISSIPPI.  In  this  State,  bonds,  bills,  promissory  notes  and  all  other 
writings  for  the  payment  of  money  or  other  things,  may  be  assigned  by 
indorsement,  whether  drawn  payable  to  the  order  or  assigns  of  the  payee 
or  not;  the  assignee  or  indorsee  may  sue  thereon  in  his  own  name  in  the 
same  manner  as  the  payee  or  obligee  might  have  done;  and  a  set-off  is 
allowed  of  demands  accruing  at  any  time  before  notice  of  assignment. 
The  assignee  or  indorsee  may  recover  against  the  assignor  or  indorser  as 
in  cases  of  inland  bills  of  exchange,  provided  that  where  the  debt  shall  be 
lost  by  the  negligence  or  default  of  the  assignee,  the  assignor  shall  not  be 
liable.  Hutchinson's  Code,  640,  852. 

TEXAS.  It  is  not  necessary  in  this  state  for  the  owner  or  holder  of  a 
bill  of  exchange,  promissory  note,  check,  draft,  or  other  mercantile  nego- 
tiable instrument,  to  have  any  of  these  instruments  protested  for  non- 
acceptance  or  non-payment;  nor  is  it  necessary  to  give  notice  of  such 
dishonor,  to  any  drawer,  indorser  or  assignor  of  the  same;  and  every  such 
party,  is  without  any  protest  or  notice  whatever,  held  responsible  as 
security  for  the  final  payment  of  every  such  instrument.  Instead  of 
protest  and  notice  the  holder  is  to  use  due  diligence  to  collect  the  same; 
and  due  diligence  requires  the  holder  to  institute  a  suit  before  the  first 
term  of  the  District  Court,  after  the  right  of  action  accrues,  or  at  the  next 
term  where  he  cannot  do  so  before.  The  assignee  and  indorsee  may  bring 
the  action  thereon  in  his  own  name,  and  the  maker  or  obligor  is  entitled 
to  a  set-off  of  all  demands  existing  against  the  payee,  in  case  of  a  transfer 
by  him  after  the  note  or  other  instrument  became  due.  No  set-off  allowed 
that  accrues  after  the  notice  of  assignment.  Hartley's  Digest  of  the  laws 
of  Texas,  771,  2;  published  in  1850. 


INDORSEMENT    AND  TRANSFER.  279 

The  right  of  property  in  a  bill  or  note  implies  the  right  to 
sell  it,  or  make  such  a  disposition  of  it  as  the  owner  and 
holder  may  see  fit.  i  Accordingly  the  payee  or  indorsee  of 
the  instrument  may  indorse  it  over  to  another,  inserting  in  the 
indorsement  a  condition  making  it  payable  upon  the  happen- 
ing of  an  uncertain  event.  2  To  make  such  an  indorsement 
operate  as  a  perfect  transfer  of  the  title,  it  must  be  shewn  that 
the  condition  has  been  complied  with  or  fulfilled. 

But  the  payee  or  indorsee  of  a  note  cannot  assign  or  transfer 
part  of  the  sum  due  thereon,  so  as  to  enable  his  indorsee  to 
maintain  an  action  on  the  note  against  the  maker.  3  The 

'9  Barb.,  214;  11  id.  620. 

*  Robertson  v.  Kensington,  4  Tannt.,  30.    In  this  case  the  plaintiff  being 
the  payee  of  the  bill,  indorsed  it,  "  pay  the  within  sum  to  Messrs.  Clark  & 
Ross,  or  order,  upon  my  name  appearing  in  the  gazette  as  ensign  in  any  regi- 
ment of  the  line  between  the  1st  and  64th,  if  within  two  months  from  this 
date;"  and  the  transfer  was  held  subject  to  the  condition. 

*  Douglass  v.  Wilkeson,  6  Wend.,  637;  S.  C.,  17  Wend.,  431;  22  Wend., 
559.    The  note  in  this  case  was  made  for  $2,500,  and  the  payee  indorsed  it 
"  pay  on  the  within  $750." 


ARKANSAS.  In  this  state,  all  bonds,  bills,  notes,  agreements  and  con- 
tracts in  writing  for  the  payment  of  money  or  property,  or  for  both 
money  and  property,  are  assignable;  an(Tthe  assignee  has  a  right  of  action 
thereon  in  his  own  name.  Indorsers  or  assignors  of  any  instrument  in 
writing  assignable  by  law,  for  the  payment  of  money  alone,  on  receiving 
due  notice  of  the  non-payment  or  protest  of  any  such  indorsed  or  assigned 
instrument  in  writing,  are  equally  liable  with  the  original  maker,  obligor 
or  payee  of  the  instrument,  and  may  be  sued  thereon  with  the  maker,  or 
separately.  English's  Digest  of  the  statutes  of  Arkansas,  161,  162,  163. 
The  statute  only  confirms  the  law  merchant  in  relation  to  bills  of 
exchange,  and  extends  it  to  other  instruments.  Buckner  v.  K.  E.  Bank, 
5  Ark.  Rep.,  536. 

MISSOURI.  In  this  state  every  promissory  note  for  the  payment  of 
money,  expressed  on  the  face  thereof,  to  be  for  "  value  received,  negotiable 
and  payable  without  defalcation,"  are  payable  as  therein  expressed,  and 
have  the  same  effect,  and  are  negotiable  in  like  manner  as  inland  bills  of 
exchange.  The  holder  may  maintain  actions  thereon  against  the  makers 
and  indorsers  in  like  manner  as  in  cases  of  inland  bills  of  exchange  and 
not  otherwise.  When  such  notes  are  made  payable  to  the  maker,  or  to  a 
fictitious  person,  they  are  deemed  payable  to  bearer,  as  in  the  state  of 
New-York.  Revised  Statutes  of  Missouri,  174,  175.  Notes  drawn  in  the 


280  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

reason  is,  that  no  one  can  recover  on  a  note  or  bill  of  exchange 
unless  he  shews  a  title  to  the  instrument;  and  he  cannot 
deduce  his  title  through  an  indorsement,  which  is  not  made 
in  compliance  with  the  established  custom  of  merchants;  and 
this  custom  does  not  allow  the  contract  to  be  apportioned  so 
as  to  subject  the  parties  liable  thereon  to  separate  and  distinct 
actions,  i  The  custom  directs  that  the  indorsement  should 
be  made  in  writing  on  the  note  or  bill,  appointing  the  con- 
tents to  be  paid  to  some  third  person;  2  but  does  not  recognise 
a  partial  indorsement.  3  The  language  of  the  books  is,  that 

1  6  "Wend.,  639.  "  Indorsement  is  a  term  known  in  law,  which,  by  the  cus- 
tom of  merchants,  transfers  the  property  of  the  bill  or  note  to  the  indorsee, 
and  is  usually  made  on  the  back  of  the  bill,  and  must  be  in  writing."  Cunn. 
on  Exchange  Law,  43. 

a  Gibson  v.  Minet,  1  H.  Black.,  605. 

3  Hawkins  v.  Cardy,  Lord  Raym.,  360;  Carth.,  466;  12  Mod.,  213;  Salk., 
65. 


manner  above  specified,  are  placed  on  the  footing  of  inland  bills  of 
exchange :  other  notes  are  not  so  negotiable,  and  consequently  the  assignee 
of  them  takes  them  subject  to  any  defences  which  the  maker  may  have 
against  them. 

Austin  &  Haines  v.  Blue,  6  Missouri  Rep.,  265;  Muldrow  v.  Caldwell, 
7  id.  563;  8  id.  107,  336. 

TENNESSEE.  "All  bills,  bonds  or  notes  for  money,  as  well  those  with 
seal,  as  those  without  seal,  those  which  are  not  expressed  to  be  payable  to 
order  or  for  value  received,  as  those  which  are  expressed  to  be  payable  to 
order  and  for  value  received,  shall  be  held  and  deemed  to  be  negotiable; 
and  all  interest  and  property  therein  shall  be  transferable  by  indorsement, 
in  the  same  manner  and  under  the  same  rules,  regulations  and  restrictions 
as  notes  called  promissory  or  negotiable  notes  have  heretofore  been;  and 
the  indorsee  or  assignee  may  have  or  maintain  his  action  of  the  case  for 
the  recovery  of  the  moneys  due  him  upon  such  bill,  bond  or  note,  not- 
withstanding any  seal  thereunto  annexed,  and  in  his  the  said  indorsee's 
or  assignee's  own  proper  name,  as  suits  have  been  heretofore  had  and 
maintained  by  indorsees  or  assignees  of  notes  called  promissory  or  nego- 
tiable." Statute  Laws,  499,  COO. 

Negotiable  paper,  by  the  law  merchant,  and  by  the  statutes  of  this  State, 
includes  orders  or  bills  of  exchange,  checks  on  banks,  bank  notes,  and 
notes  of  hand,  with  or  without  seal,  but  all  for  money,  which  they  repre- 
sent for  the  convenience  of  commerce.  5  Yerger,  435. 

KENTUCKY.  All  bonds,  bills  or  notes,  for  money  or  property,  are 
assignable,  so  as  to  vest  the  right  of  action  in  the  assignee;  but  the  right 


INDORSEMENT    AND  TRANSFER.  281 

an  indorsement  transfers  the  property  of  the  bill  or  note  to 
the  indorsee;  what  does  less  than  that,  is  not  strictly  an 
indorsement;  and  hence,  says  Mr.  Justice  Bayley,  an  indorse- 
ment cannot  be  made  for  the  transfer  of  less  than  the  full  sum 
appearing  to  be  due  upon  the  bill  or  note,  i 

A  writing  indorsed  on  the  back  of  a  promissory  note  shew- 
ing the  purpose  for  which  it  is  executed,  or  making  its  pay- 
ment dependent  upon  a  contingency,  is  not  a  part  of  the  note 
so  as  to  affect  its  negotiability;  but  in  an  action  upon  it,  the 
holder  must  unquestionably  shew  a  right  of  recovery  upon 
the  whole  instrument.  In  other  words,  taking  it  with  express 
notice  of  the  condition  upon  which  it  is  to  become  due,  the 
indorsee  must  shew  that  that  condition  has  been  complied 
with.  -2 

1  Bayley  on  Bills,  72;  3  Kent's  Com.,  69. 

1  Sanders  v.  Bacon,  8  John.  R.,  485.  The  indorsement  stated  that  the  note 
was  delivered  as  a  consideration  for  a  certain  judgment  and  execution  to  be 
assigned  to  the  makers;  held  no  part  of  the  note.  Tappan  v.  Ely,  15  Wend., 
862.  The  indorsement  stated  that  the  note  was  made  as  a  security  for  certain 
acceptances,  and  that  in  case  the  acceptances  were  paid  by  the  party  accom- 
modated the  note  was  to  be  void;  held  no  part  of  the  note,  but  a  good  notice 
to  the  purchaser  of  the  condition  on  which  it  was  to  become  due  and  payable. 


to  any  defence,  discount  or  get-off  which  the  defendant  has  or  might  have 
used  against  the  original,  or  any  intermediate  assignor,  before  notice  of 
the  assignment  to  the  plaintiff,  is  not  impaired.  Bills,  drafts  or  checks, 
payable  in  bank  notes  or  currency  or  other  funds,  wheresoever  drawn  or 
payable,  are  deemed  negotiable,  and  treated  as  if  drawn  for  money.  Re- 
vised Statutes,  193-4;  adopted  and  published  in  1852. 

The  assignee  of  a  note  or  bond,  to  secure  a  right  of  recourse  upon  his 
assignor,  must,  if  there  is  time  after  the  assignment,  and  after  the  note  is 
due,  bring  suit  in  the  proper  court  soon  enough  to  get  a  judgment  at  the 
next  term.  McMurray  v.  Wood,  9  Dana  R.,  45. 

OHIO.  In  this  state,  bonds,  promissory  notes,  bills  of  exchange,  foreign 
and  inland,  drawn  in  a  negotiable  or  assignable  form,  are  negotiable  by 
indorsement,  so  as  to  transfer  and  vest  the  property  in  each  and  every 
indorsee  successively:  the  indorsee  may  sue  the  maker  of  the  same  in  his 
own  name,  and  recover  thereon;  or  he  may  sue  and  recover  against  the 
indorser,  having  first  used  due  diligence  to  obtain  the  money  of  the  drawer, 
•  maker  or  obligor.  When  such  instruments  are  transfered  after  due,  the 
maker,  drawer  or  obligor  is  entitled  to  the  same  defence  as  if  no  transfer 

16 


282  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

When  the  payee  or  indorsee  of  a  promissory  note  or  bill  of 
exchange  intends  simply  to  sell  or  transfer  the  instrument 
without  rendering  himself  liable  thereon  as  an  indorser,  he 
should  state  the  fact  in  his  indorsement ;  which  may  be  done  by 
adding  under  his  name  "  without  recourse  to  me,"  or  any 
other  words  shewing  that  he  does  not  intend  to  incur  any 
responsibility,  i  Such  an  indorsement  transfers  the  title  to 
and  property  in  the  bill,  while  it  rebuts  the  indorser's  liability 
to  the  indorsee  and  subsequent  holders.  2  A  qualified  indorse- 
ment of  this  kind  may  be  written  thus :  "  I  hereby  indorse 
and  transfer  my  right  and  interest  in  this  bill  to  C.  D.  or 
order,  but  with  this  express  condition,  that  I  shall  not  be 
liable  to  him  or  any  subsequent  holder  for  the  acceptance  or 

1  Goupy  v.  Harden,  7  Taunt.,  160;  2  Marsh.,  454. 

s  Richardson  v.  Lincoln,  5  Metcalf,  201.  In  this  case,  it  was  held  that  the 
defendant,  not  the  payee  of  the  note,  having  indorsed  it  at  the  time  it  was 
made,  was  liable  as  an  original  promisor  and  surety.  As  to  the  form  of  an 
indorsement  without  recourse,  see  Chitty  on  Bills,  224,  234,  note. 


had  been  made:  When  transfered  before  due,  the  defendant  may  set  up 
payments  actually  made  before  the  transfer,  on  proving  that  the  plaintiff 
had  notice  of  such  payments  before  the  indorsement  to  him  was  made. 
Such  instruments  are  entitled  to  three  days  of  grace  in  the  time  of  pay- 
ment. And  the  demand  of  payment  from  the  maker  on  the  third  day, 
and  notice  given  to  the  indorser  within  a  reasonable  time  thereafter,  is  due 
diligence  entitling  the  holder  to  recover  against  the  indorser,  where  no 
other  condition  is  expressed  in  the  indorsement.  Swan's  R.  S.  of  Ohio; 
Derby's  edition  of  1854,  p.  575,  576;  10  Ohio  K.,496;  14  id.,  490;  17  id., 
128,  572;  18  id.,  154. 

MICHIGAN.  The  Revised  Statutes  of  this  state  make  promissory  notes 
in  writing  for  the  payment  of  money  to  have  the  same  effect  and  be 
negotiable  in  like  manner  as  inland  bills  of  exchange,  according  to  the 
custom  of  merchants,  whether  signed  by  the  maker  or  his  authorized 
agent.  The  payees  and  indorsees  may  maintain  action  thereon  as  upon 
inland  bills.  Acceptances  must  be  in  writing;  and  days  of  grace  are 
allowed  upon  bills  payable  at  sight  or  at  a  future  day  certain  within  the 
state,  and  also  on  negotiable  notes,  orders  and  drafts  payable  in  like 
manner;  but  not  on  bills,  notes  or  drafts  payable  on  demand.  The 
statute  closely  resembles  that  of  New- York.  See  R.  S.  of  Michigan,  156. 
So  also  as  to  pleading,  and  bringing  suit  against  all  the  parties  in  one 
action,  439,  440, 1. 


INDORSEMENT  AND  TRANSFER. 


283 


payment  of  the  bill."  i  But  any  form  of  words  will  answer 
the  same  purpose,  by  which  the  party  indorsing  disclaims  the 
responsibility  of  an  indorser.  2  The  mere  addition  of  the 
word  agent  to  the  indorser's  name,  where  he  is  known  to  be 
acting  in  that  capacity;  3  or  the  word  treasurer,  where  the 
note  is  drawn  payable  to  him  as  such ;  4  or  the  word  cashier, 
where  he  is  known  to  be  acting  officially,  is  a  sufficient  indi- 
cation that  he  does  not  intend  to  assume  the  personal  respon- 
sibility of  an  indorser.  5  But  where  the  indorser  adds  to  his 

1  Chitty  on  Bills,  235;  Pike  r.  Street,  Mood,  and  M.,  266. 

*  Rice  v.  Stearns,  3  Mass.  R.,  226. 

*  Mott  v.  Hicks,  1  Cowen  R.,  513. 

4  Babcock  v.  Beman,  1  Kernan  R.,  200. 

*  Watervliet  Bank  v.  White,  1  Denio,  608;  Brockway  v.  Allen,  17  Wend., 
41;  Hicks  v.  Ilinde,  9  Barb.,  928.     So,  when  a  draft  is  drawn  requesting  the 
drwree  to  charge  to  the  account  of  a  bank,  and  signed  A.  B.,  Cashier;  the 
bank  and  not  A.  B.,  is  the  drawer  of  the  draft.    1  Hill  R..  11;  4  id.  442;  3 
Barb.,  523. 


ILLINOIS.  The  statute  of  this  state  makes  bonds,  bills,  notes  and  other 
instruments  in  writing  assignable  by  indorsement  thereon,  so  as  to  transfer 
and  vest  the  property  thereof  in  the  assignee;  gives  the  assignee  a  right  of 
action  thereon;  and  then  provides  that  the  assignor  shall  be  answerable 
to  the  assignee,  if  he  has  used  diligence  in  the  prosecution  of  a  suit  against 
the  maker  of  the  assigned  instrument  without  avail,  or  if  it  is  shewn  that 
such  a  suit  would  have  been  useless,  or  that  the  maker  had  absconded,  or 
left  the  state.  R.  S.  of  1845,  p.  384,  385.  The  assignee  is  not  bound  to 
give  the  assignor  any  notice  of  non-payment;  and  if  he  does,  it  will  not 
give  him  any  right  of  action  against  the  assignor.  Pierce  v.  Short,  14 
Illinois  R.,  144. 

INDIANA.  Notes  payable  to  order  or  bearer  in  a  bank  in  this  state,  are 
by  statute  negotiable  as  inland  bills  of  exchange,  and  the  payees  and 
indorsees  thereof  may  recover  as  in  case  of  such  bills.  But  in  general, 
notes,  bills,  bonds  and  other  instruments  in  writing,  payable  in  money  or 
specific  articles,  are  only  assignable  by  indorsement  so  as  to  vest  the 
property  in  the  indorsee;  the  assignment  not  being  governed  by  the  law 
merchant:  Bullitt  v.  Scribner,  1  Blackf.,  14.  The  indorser  in  such  a 
ease  warrants  two  things:  1.  That  the  note  is  valid,  and  the  maker 
liable  to  pay  it:  2.  That  the  maker  of  the  note  is  solvent,  and  able  to 
pay  it.  Howell  v.  Wilson,  2  Blackf.,  418.  As  to  notes  payable  at  a  bank, 
and  therefore  negotiable  by  statute,  the  indorser's  undertaking  is  different. 
Niles  v.  Porter,  6  Blackf.,  44;  id.,  314;  See  1  Revised  Statutes  of  that 
state,  1852,  p.  378. 


284  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

name  the  word  backer,  or  the  word  surety,  he  does  not  in  any 
respect  limit  his  responsibility  as  an  indorser;  although  he 
may  thereby  acquire,  or  shew  a  state  of  facts  entitling  him  to 
the  privileges  and  rights  of  a  surety  in  his  relation  to  the 
maker,  i  In  short,  whatever  words  are  used  in  the  writing  of 
indorsement  on  a  note  or  bill,  are  to  be  construed,  as  in  other 
contracts,  so  as  to  carry  into  effect  the  expressed  design  of  the 
parties.  2 

In  the  ordinary  course  of  business,  the  unqualified  indorse- 
ment of  a  note  or  bill  is  a  double  contract :  it  is  a  present 
transfer  and  assignment  of  the  paper  to  the  indorsee,  and  an 
executory  contract  by  which  the  indorser  agrees,  upon  certain 
conditions,  to  pay  the  amount  of  the  note  or  bill  himself.  As 
a  regular  indorsement  it  must  operate  as  a  transfer  of  the 
paper;  and  it  will  operate  as  a  collateral  contract,  unless 

1  Seabury  v.  Hungerford,  2  Hill  R.,  80.  By  adding  the  word  backer  the 
indorser  only  declares  still  more  explicitly  his  character  as  an  indorser.  Brad- 
ford v.  Corey,  5  Barb.  R.,  461;  adding  the  word  turety  to  his  signature,  gives 
him  the  privileges  of  that  relation,  without  affecting  his  rights  or  liability  as 
an  indorser. 

»  8  Mass.  R.,  226. 


WISCONSIN.  Promissory  notes  have  the  same  effect  and  are  declared 
negotiable  in  like  manner  as  inland  bills  of  exchange,  (as  in  New-York), 
and  the  provisions  of  the  statutes,  in  other  respects,  relating  to  negotiable 
paper  are  similar  to  ours.  Revised  Statutes  of  1849,  p.  262,  263,  503, 
504. 

IOWA.  Notes  in  writing  for  the  payment  of  money,  drawn  in  a  nego- 
tiable form,  are  negotiable  by  indorsement  or  delivery  in  the  same  manner 
as  inland  bills  of  exchange,  according  to  the  custom  of  merchants.  Other 
instruments  for  the  payment  of  money  or  property  are  also  negotiable. 
In  order  to  charge  an  indorser  of  a  promissory  note  for  the  payment  of 
money,  a  sufficient  demand  may  be  made  on  either  of  the  three  days  of 
grace;  and  the  indorser  of  a  negotiable  instrument  is  liable  without  notice 
if  the  indorsee  or  assignee  has  used  diligence  in  the  commencement  and 
prosecution  of  a  suit  against  the  maker.  A  blank  indorsement  of  an 
instrument  for  the  payment  of  money ,  property  or  labor  by  a  stranger  to  the 
instrument,  is  construed  as  a  guaranty;  and  the  guarantor  is  entitled  to 
reasonable  notice,  but  is  liable  though  he  have  no  notice,  where  he  has  not 
been  injured  in  consequence.  Code  of  Iowa,  approved  in  1851,  p.  149, 
150. 


INDORSEMENT  AND  TRANSFER.  285 

a  contrary  intent  is  expressed  in  the  writing  of  indorse- 
ment, i 

The  actual  delivery  of  the  bill  or  note  transfered,  should 
properly  accompany  the  assignment  in  all  cases;  for  the  pos- 
session of  negotiable  paper  raises  many  important  presump- 
tions in  favor  of  the  holder.  2  In  the  case  of  bills  and  notes 
drawn  payable  to  order,  the  assignment  is  ordinarily  made  by 
indorsement  and  delivery;  while  bills  and  notes  drawn  payable 
to  bearer,  or  originally  payable  to  order  and  indorsed  in  blank, 
may  be  assigned  either  by  delivery  only,  or  by  indorsement 
and  delivery.  3  On  a  transfer  by  delivery  only,  without 
indorsement,  the  person  making  it  ceases  to  be  a  party  to  the 
bill  or  note;  on  a  transfer  by  indorsement,  he  is  according  to 
the  legal  operation  of  his  act,  a  new  drawer.  4 
•  In  an  action  against  the  maker  of  a  promissory  note,  it  is 
usual  to  aver  that  the  defendant  made  and  delivered  the  note ; 
while  in  an  action  by  an  indorsee  against  the  indorser  of  a 
note,  it  is  sufficient  for  him  to  allege  the  making  and  delivery 
of  the  note  to  the  defendant,  and  that  the  defendant  indorsed 

1  Kernan  R.,  200.  A  receipt  of  so  much  money  indorsed  on  the  back  of 
a  note,  signed  by  the  payee,  cann*t  be  converted  into  an  indorsement  by  parol 
evidence  that  it  was  afterwards  delivered  with  the  intention  that  it  should 
operate  as  such.  McCoon  v.  Briggs,  2  Hill  R.,  121. 

•  3  John.  Cas..  6;  1  John.  R.,  319;  8  Wend.,  600;  7  Paige  Ch.  R.,  615;  6 
Hill  R.,336;  1  Dcnio,  116. 

*  Bayley  on  Bills,  65,  66;  Dongl.,  611-633;  3  John.  R.,  435. 
4  Smallwood  v.  Vernon,  Str.,  478. 


CALIFORNIA.  This  state  has  adopted  substantially  the  statutes  of  New- 
York  in  relation  to  bills  of  exchange  and  promissory  notes,  making  notes 
for  the  payment  of  money  to  have  the  same  effect  and  be  negotiable  in  like 
manner  as  inland  bills  of  exchange,  according  to  the  custom  of  merchants. 
When  notice  of  non-acceptance,  or  non-payment  of  a  bill  of  exchange, 
promissory  note  or  other  negotiable  instrument,  may  be  given  by  mail,  it 
is  sufficient  to  direct  it  to  the  place  where  the  person  to  be  charged  resided 
at  the  drawing,  making  or  indorsing  of  the  paper,  unless  he  has  specified 
under  his  signature  thereon  the  post-office  where  notice  is  to  be  sent. 
Compiled  laws  of  California,  146,  147,  148,  149,  published  by  authority 
in  1853.  The  act  relating  to  bills  and  notes  was  passed  in  April  1850. 


286  BILLS  OF    EXCHANGE  AND    PROMISSORY  NOTES. 

the  note  to  him,  the  plaintiff,  i  The  note  has  no  legal  incep- 
tion until  it  is  delivered  to  some  person,  as  evidence  of  a  sub- 
sisting debt;  2  nor  is  the  drawee  of  a  bill  bound  as  an  acceptor 
by  the  mere  act  of  writing  his  acceptance  upon  it;  for  if  he 
changes  his  mind  and  obliterates  the  acceptance  before  the  bill 
is  delivered  back  to  the  holder,  he  is  not  bound  as  an  acceptor.  3 
On  the  same  principle  the  indorsement  of  a  note  or  bill  is  not 
complete  until  the  instrument  is  delivered  to  the  indorsee,  or 
put  under  his  legal  control.  Indeed,  it  is  not  at  all  material 
when  or  for  what  purpose  the  indorsement  is  written,  since  it 
is  the  delivery  of  the  paper  properly  indorsed  that  operates  as 
a  contract  of  indorsement.  4 

A  promissory  note  made  payable  to  order  may  be  transfered 
without  indorsement,  so  as  to  vest  the  property  in  it  in  the 
purchaser.  Transfered  in  that  manner,  it  was  formerly  necesr 
sary  to  bring  the  action  upon  it  in  the  name  of  the  payee; 
under  the  Code,  it  may  be  brought  in  the  name  of  the  real 
owner.  5  But  such  a  transfer  does  not  clothe  the  assignee 
with  all  the  rights  of  an  indorsee  of  negotiable  paper,  trans- 

1  Chitty  on  Bills,  forms  553,  654.  The  allegation  in  a  complaint  on  a  bill  or 
note  that  the  payee  or  other  holder  indorsed  the  note  to  the  plaintiff  imports 
a  delivery  and  transfer  so  as  to  confer  title.  Byles  on  Bills,  116.  A  delivery 
to  the  indorsee  is  necessary  to  complete  the  act  of  transfer  by  indorsement. 
Sainsbury  v.  Parkinson.  20  Eng.  Law  and  Eq.  R.,  351,  note.  A  delivery  of 
an  indorsed  bill,  for  a  special  purpose,  e.  g.,  for  the  purpose  of  getting  it  dis- 
counted, is  not  an  indorsement  to  the  agent.  Lloyd  v.  Howard,  1  id.  227. 
But  if  the  agent  in  such  a  case  deposits  it  as  a  pledge  for  money  advanced 
on  it,  and  the  pledgee  takes  it  in  good  faith,  he  acquires  a  valid  title  and  tight 
to  recover  on  it.  Palmer  v.  Richards,  id.  529. 

9  Marvin  v.  M'Cullum,  20  John.  R.,  288. 

1  Cox  and  others  v.  Troy,  5  Barn,  and  Aid.,  474. 

4  Havens  v.  Huntington,  1  Cowen  R.,  387 ;  Callow  v.  Lawrence,  3  M.  and 
S.,  94;  Guild  v.  Zager,  17  Mass.,  615.  In  these  cases  it  is  taken  for  granted 
that  the  indorser  of  dishonored  paper  may  take  it  up,  and  put  it  again  in  cir- 
culation, striking  off  the  names  of  subsequent  indorsers.  The  delivery  com- 
pletes the  transfer  and  the  contract  of  indorsement;  and  for  this  reason,  where 
a  note  is  indorsed  in  Michigan,  to  be  delivered  for  goods  purchased  or  on  an 
indebtedness  in  New- York,  or  where  a  note  is  signed  in  Ohio  and  delivered  on 
an  agreement  completed  in  this  state,  the  contract  is  held  to  be  made  here. 

'Billings  v.  Jane,  11  Barb.  R.,  620;  10  B.  andC.,  122. 


INDORSEMENT  AND   TRANSFER.  287 

f»Tcd  to  him  in  the  usual  manner  and  course  of  business: 
it  gives  him  the  title  to  the  note,  but  subject  to  the  rules 
applicable  in  the  case  of  an  assignment  of  any  other  chose  in 
action.  In  short,  a  note  negotiable  by  indorsement  but  not 
indorsed,  transfered  by  delivery,  and  a  note  not  negotiable 
transfered  by  delivery,  are  equally  open  to  every  equitable 
defence  which  the  maker  had  against  it  at  the  time  of  the 
transfer;  and  if  the  payee  could  not  have  recovered  at  that 
time,  the  assignee  cannot,  i 

The  transfer  by  indorsement  is  equivalent  in  effect  to  the 
drawing  of  a  bill,  the  indorser  being  in  almost  every  respect 
considered  as  a  new  drawer.  2  Mr.  Justice  Bayley  says,  that 
the  indorsement  of  a  bill  or  note,  implies  an  undertaking  from 
the  indorser  to  the  person  in  whose  favor  it  is  made,  and  to 
every  other  person  to  whom  the  bill  or  note  may  afterwards 
be  transfered,  exactly  similar  to  that  which  is  implied  by 
drawing  a  bill,  except  that  in  the  case  of  a  note,  the  stipula- 
tions with  respect  to  the  drawer's  responsibility  and  under- 
taking do  not  apply.  3  Now,  the  act  of  drawing  a  bill  implies 
an  undertaking  from  the  drawer  to  the  payee,  and  every  other 
person  to  whom  the  bill  may  afterwards  be  transfered,  that 
the  drawee  is  a  person  capable  of  making  himself  responsible 
for  its  payment,  and  that  he  shall,  if  applied  to  for  the  pur- 
pose, express  in  writing  upon  the  bill  an  undertaking  to  pay 
it  when  it  shall  become  payable,  and  that  he  shall  then  pay 
it;  and  subjects  the  drawer  on  a  failure  in  any  of  these  par- 
ticulars to  an  action  at  the  suit  of  the  payee  or  holder,  provi- 
ded the  proper  steps  have  been  taken  to  charge  him  with  lia- 
bility thereon.  4 

Other  authorities  consider  it  more  correct  to  say  that  an 
indorsement  is  in  the  nature  of  a  new  drawing.  5  It  is  clearly 
a  distinct  and  independent  contract,  that  the  bill  shall  be 

1  Hedge*  v.  Seeley,  9  Barb.  R.,  214;  20  John.  R.,  144. 

•12  Wend.  R.,  443;  8  East.  482;  2  Burr.,  674,  5;  1  Str.,  441. 

Bayley  on  Bills,  ch.  5,  §  8;  Story  on  Bills,  §  108. 
4  Bayley  on  Bills,  ch.  1,  §  13,  ch.  5,  §  1 ;  Story  on  Bills,  §  107. 
'Gwinnell  r.  Herbert,  5  Ad.  and  El.,  486;  6  N.  and  M..  723. 


288  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

accepted  and  paid,  or  that  in  case  it  is  not  accepted  when  pre- 
sented for  that  purpose,  or  not  paid  on  due  presentment  when 
it  becomes  payable,  and  the  holder  gives  him  due  notice  there- 
of, he,  the  indorser,  will  pay  the  bill,  i  In  respect  to  pro- 
missory notes,  the  engagement  of  the  indorser  is  to  pay,  if  the 
maker  of  the  note  does  not,  upon  being  required  to  do  so  when 
the  note  falls  due,  and  upon  the  further  condition  that  the 
indorser  is  duly  notified  of  such  default.  2 

The  foundation  of  the  law  on  this  subject  is  stated  with 
great  clearness  by  Chief  Justice  Marshall.  3  "  The  liability 
of  the  drawer  of  a  bill  of  exchange  stands  upon  the  same 
principle  with  every  other  implied  contract.  He  has  received 
the  money  of  the  person  in  whose  favor  the  bill  is  drawn,  and 
promises  that  it  shall  be  returned  by  the  drawee.  If  the 
draAvee  fail  to  pay  the  bill,  then  the  promise  of  the  drawer  is 
broken,  and  for  this  breach  of  contract  he  is  liable.  The 
same  principle  applies  to  the  indorser.  His  contract  is  not 
written,  but  his  name  is  evidence  of  his  promise,  that  the  bill 
shall  be  paid,  and  of  his  having  received  value  for  it.  He  is 
in  effect  a  new  drawer,  and  has  made  a  new  contract.  The 
law  does  not  require  that  this  contract  shall  be  fully  ex- 
pressed in  writing;  and,  in  determining  what  evidence 
shall  be  sufficient  to  prove  it,  does  not  introduce  new  condi- 
tions not  actually  made  by  the  parties.  The  same  reasoning 
applies  to  the  principle  which  requires  notice.  The  original 
contract  is  not  written  at  large.  It  is  founded  on  the  acts  of 
the  parties,  and  its  extent  is  measured  by  those  acts.  A.  draws 
on  B.  in  favor  of  C.,  for  value  received.  The  bill  is  evidence 
that  he  has  received  value,  and  has  promised  that  it  shall  be 
paid.  He  has  funds  in  the  hands  of  the  drawee,  and  has  a 
right  to  expect  that  his  promise  will  be  performed.  He  has 
also  a  right  to  expect  notice  of  its  non-performance,  because 
his  conduct  may  be  materially  influenced  by  this  failure  of 
the  drawee.  He  ought  to  have  notice  that  his  bill  is  dis- 

1  4  Wend.,  566;  1  Comst.  R.,  413,  2  John.  Cas.,  75. 

"5  Barb.  R.,  463. 

'  Ogden  v.  Saunders,  12  Wheat.  R.,  213,  341. 


INDORSEMENT   AND  TRANSFER.  289 

graced,  because  this  notice  enables  him  to  take  measures  for 
his  own  security.  It  is  reasonable  that  he  should  stipulate 
for  this  notice,  and  the  law  presumes  that  he  did  stipulate 
for  it." 

It  has  been  contended  that  an  indorsement  is  equivalent  to 
a  warranty  that  the  prior  indorsements  were  made  by  persons 
having  competent  authority;  and,  though  that  doctrine  is  not 
fully  conceded,  it  is  agreed  that  an  indorsement  admits  all 
prior  indorsements  to  have  been  in  fact  duly  made,  i  The  in- 
dorser,  moreover,  impliedly  warrants  that  the  instrument  is 
not  forged;  in  other  words,  he  warrants  the  title  which  he 
undertakes  to  convey,  and  is  responsible  on  his  warranty  in 
case  it  fails.  2  Though  he  transfers  the  note  upon  condition 
that  it  is  to  be  collected  at  the  risk  of  the  indorsee,  he  is 
nevertheless  responsible  if  the  note  proves  to  be  a  forgery.  3 
And  this  warranty  of  the  title  or  genuineness  of  the  instru- 
ment, which  accompanies  the  transfer  of  all  negotiable  paper, 
is  broken  where  the  paper  is  forged,  as  soon  as  the  transfer  is 
made.  4 

Furthermore,  the  indorser  always  warrants  the  existence 
and  legality  of  th»  contract  which  he  undertakes  to  assign. 
Thus,  it  has  been  adjudged  that  he  is  answerable  as  the  in- 
dorser of  a  note  made  by  an  agent  in  the  name  of  a  principal 
who  was  dead  at  the  time  the  note  was  signed.  5  And,  where 
the  payee  of  a  note,  given  for  an  usurious  or  gaming  debt,  in- 
dorses it  to  a  purchaser  who  receives  it  without  notice  of  the 
facts  impeaching  its  validity,  it  is  held  that  he  is  liable  there- 
on as  an  indorser.  6  So,  if  he  indorses  the  note  of  a  minor,  or 
of  a  married  woman,  or  a  note  that  has  been  forged,  he  is  re- 
sponsible upon  his  contract  with  the  indorsee.  7  In  this  sense 

1  Chitty  on  Bills,  242;  Lambert  v.  Pads,  1  Salk.,  127;  Critchlow  v.  Parry, 
2  Campb.,  182;  Free  v.  Hawkins.  Holt  N  .  P.  R  ,  660. 
'  Herrick  v.  Whitney,  16  John.  R.,  240;  1C  id.  201;  6  Wend.,  181. 
'  Shaver  v.  Klilo  16  John.  R.,  201. 
4  Murray  v.  Jndah,  10  Cowen  R.,  484. 

•  Burrill  v.  Smith,  7  Pick.  R..  291. 

•  McKnight  T.  Wheeler,  6  Hill  R.,  492;  Edwards  v.  Dick,  4  Barn,  and  Aid., 
212.     The  indorsee  might  recover  of  his  indorser  in  such  a  case*  for  money  had 
and  received.    Ingalls  T.  Lee,  9  Barb.  R.,  647. 

T  7  Pick.  R.,  294. 


290  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

it  is  decided  that  "  the  indorser  must  take  the  risk  of  the 
validity  of  the  note  which  he  assigns.  He  gives  currency  to 
it,  in  fact  warrants  its  genuineness  in  respect  of  the  indorsee." 

The  decisions  proceed  upon  the  principle  that  the  indorser 
warrants  the  title  and  genuineness  of  the  paper  he  transfers; 
and  that  when  prosecuted  upon  his  contract  of  indorsement, 
he  is  estopped  from  denying  the  existence,  legality  or  validity 
of  the  contract  which  he  has  assigned  for  the  purpose  of  de- 
feating his  own  liability,  i  Where  the  title  fails,  he  is  an- 
swerable independent  of  his  contract  of  indorsement;  2  in 
most  other  cases  he  is  responsible  as  an  indorser.  3 

The  acceptor  of  a  draft  admits  the  genuineness  of  the  draw- 
er's signature;  but  neither  acceptance  nor  payment  is,  under 
any  circumstances,  an  admission  by  which  he  is  concluded, 
that  the  first  or  any  other  indorser's  name  is  genuine.  4 
He  is  supposed  to  know  the  handwriting  of  his  immediate  cor- 
respondent. On  the  same  principle,  the  holder  of  a  bill  is 
supposed  to  know  the  handwriting  of  the  indorser  who  trans- 
fers the  bill  to  him  :  and  consequently,  when  he  negotiates  it 
or  procures  it  to  be  discounted,  he  does  by  that  act  plainly 
affirm  that  the  indorsement  is  genuine,  so  $hat  the  bill  may  be 
negotiated  by  delivery.  5 

6  Hill  R.,  492;  4  Barn,  and  Aid.,  212;  7  Pick.,  294.  Mr.  J.  Story  states 
the  implications  of  contracts  resulting  from  the  act  of  indorsement  much  more 
strongly  than  either  Mr.  Chitty  or  Mr.  Bayley.  The  latter  says,  that  "  an 
indorsement  is  no  warranty  that  the  prior  indorsements  are  genuine.  At 
least  it  is  not,  in  the  case  of  a  person  who  has  the  same  means  of  judging  as 
the  indorser,  and  who  uses  these  means,  and  judges  for  himself."  Bayley  on 
Bills,  ch.  6,  §  3. 

11 16  John.  R.,  201;  Jones  v.  Ryde,  5  Taunt.,  488;  Bruce  v.  Bruce,  1  Mar- 
shall, 157;  1  Hill,  287;  6  Mass.,  182,  321;  2  John.,  455;  5  Conn.,  71. 

8  6  Hill  R.,  492;  4  Barn,  and  Aid.,  212;  7  Pick.,  294. 

4  Canal  Bank  v.  Bank  of  Albany,  1  Hill  R.,  287.  In  this  case,  it  appeared 
that  the  indorsement  in  the  name  of  the  payee  was  a  forgery;  and  the  acceptor 
having  paid  it  supposing  it  to  be  indorsed  by  the  payee,  recovered  back  the 
amount  paid. 

6  Coggill  v.  The  American  Exchange  Bank,  1  Comst.  R.,  113.  In  this  case 
the  drawers  presented  the  bill  with  the  name  of  the  payee  indorsed  upon  it 
for  discount,  and  though  the  name  of  the  payee  was  a  forgery,  it  was  held  that 
the  title  to  the  bill  passed  to  the  bank  discounting  it. 


INDORSEMENT  AND  TRANSFER.  291 

The  party  assuming  to  transfer  a  negotiable  instrument, 
thereby  asserts  it  to  be  genuine,  and  is  bound  to  make  his  as- 
sort inn  good.  An  exchange  broker  sells  a  bill  of  exchange 
purporting  to  be  drawn  by  a  commercial  banking  company, 
and  does  not  mention  to  the  purchaser  the  name  of  the  princi- 
pal for  whom  he  acts;  the  bill  turns  out  to  be  a  forgery;  and 
the  broker  is  held  answerable  for  the  money  received  on  the 
sale.  We  are  satisfied,  say  the  court,  that  the  rule  of  law 
which  governs  the  case  is  this :  That  where  a  person  sells 
property,  stating  that  he  acts  for  another,  but  does  not  dis- 
close the  name  of  his  principal,  he  makes  himself  responsible 
to  the  purchaser  in  any  way  in  which  the  actual  principal 
would  be  liable;  but  that  he  may  exonerate  himself  from  such 
liability  by  showing  a  payment  over  to  his  principal,  or  other 
special  circumstances  attending  the  transaction  proving  that  it 
would  be  inequitable,  as  between  the  parties,  to  hold  him  re- 
sponsible, i 

It  follows  from  the  conditional  nature  of  the  indorser's  un- 
dertaking that  a  payment  of  the  note  by  the  maker  or  by 
either  of  the  prior  indorsers,  by  the  acceptor  of  the  bill  or  by 
either  of  the  prior  parties  liable  thereon,  is  a  fulfilment  of  his 
contract — or  a  discharge  of  his  obligation.  2  A  release  of  the 
acceptor,  or  of  a  prior  indorser,  discharges  him.  3  A  valid 
agreement  with  the  acceptor,  giving  him  further  time  for  pay- 
ment, works  the  same  result.  4  But  the  acceptance  by  the 
holder  of  a  note  or  bill  over  due,  of  another  note  made  by  a 
third  person  payable  at  a  future  day  as  collateral  security,  on 
an  agreement  that  the  taking  of  such  security  shall  not  pnju- 
dice  the  rights  of  the  holder  against  the  maker  and  indorser, 
nor  prevent  the  commencement  of  a  suit,  if  ordered  by  the  in- 
dorser, is  not  such  a  valid  agreement  to  give  the  maker  time 

1  Morrison  v.  Curric,  4  Ducr  Sup.  Ct.  R.,  79;  §cc  also  Houghton  v.  Adams, 
18  Barb.  R.,  545,  as  to  the  effect  of  selling  the  notes  of  an  insolvent  bank, 
where  neither  party  knows  that  the  bank  has  failed. 

*  1  Cowen  R.,  8%;  17  Mass.,  615. 

1  9  Mottram  v.  Mills,  2  Sand.  R.,  189;  Kewcomb  T.  Rayner,  21  Wend.,  108; 
12  Wend.  R.,  116. 

4  7  Wend.  R.,  290. 


292  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

for  payment  as  will  operate  to  discharge  the  indorser.  i  Mere 
indulgence  extended  to  the  maker  will  not  have  the  effect  to 
discharge  the  indorser,  though  granted  on  the  reception  of  new 
securities  accompanied  by  a  general  request  for  indulgence. 
There  must  be  a  valid  common  law  agreement  to  give  time, 
founded  upon  a  good  consideration,  or  it  will  not  operate  as  a 
discharge.  2 

The  same  rule  applies,  whether  the  note  be  indorsed  by  the 
payee  or  a  subsequent  holder  through  whom  the  title  passes 
in  the  usual  form,  or  by  a  third  person;  provided  he  stands  in 
the  relation  of  a  surety  to  the  maker  of  the  note.  3  In  one 
sense  the  indorser  is  not  entitled  to  the  privileges  of  a  surety  :  4 
it  is  his  duty  to  take  up  the  note  when  it  is  dishonored,  and  if 
he  neglects  to  do  so  he  cannot  complain  of  the  holder  for  not 
taking  steps  to  insure  its  collection.  5  In  respect  to  the  per- 
son who  stands  fully  in  the  relation  of  a  surety,  the  rule  is 
that  the  principal  contract  cannot  be  varied  without  his  con- 
sent :  the  surety  is  entitled  to  pay  the  debt  when  it  becomes 
due,  or  he  may  call  upon  the  creditor  to  enforce  his  demand 
against  the  principal  debtor.  On  paying  the  debt,  he  is  enti- 
tled to  the  creditor's  place  by  substitution;  and  if  the  creditor, 
by  agreement  with  the  principal  debtor,  without  the  surety's 
consent,  has  disabled  himself  from  suing,  when  he  would 
otherwise  have  been  entitled  to  sue  under  the  original  con- 
tract, or  has  deprived  the  surety  on  his  paying  the  debt,  from 
having  immediate  recourse  to  his  principal,  the  contract  is 
varied  to  his  prejudice,  and  he  is  consequently  discharged.  6 

The  indorser  cannot,  like  a  surety,  call  upon  the  holder  of 
the  note  to  proceed  and  collect  it  of  the  maker;  "for  the  in- 

1  Bailey  v.  Baldwin,  7  Wend.  R.,  289. 

a  Bank  of  Utica  v.  Ives,  17  Wend.  R.,  501  .\ 

8  Bank  of  Orleans  v.  Barry,  1  Denio  R.,  116 ;  13  "Wend.,  375. 

4  5  Barb.  R.,  462,  463. 

*17  Wend.,  501;  1  Denio  R.,  116;  5  Barb.  R.,  463;  6  Wend.,  613;  8  id.  199. 

•  2  John.  Oh.  R.,  560;  9  Cowen  R.,  206;  Pain  v.  Packard,  13  John.  R.,  174. 
One  who  signs  a  note  with  another  as  suretj ,  has  the  right  to  call  upon  the 
creditor  to  proceed  and  collect  the  note  of  the  principal  debtor,  and  if  he 
refuses  to  do  so  and  delays  until  the  principal  debtor  becomes  insolvent,  the 
surety  is  discharged.  King  v.  Baldwin,  17  John.  R.,  384. 


INDORSEMENT   AND  TRANSFER.  293 

dorser,  though  in  the  nature  of  a  surety,  is  answerable  upon 
an  independent  contract,  and  it  is  his  duty  to  take  up  the  note 
when  dishonored."  i  An  accommodation  indorser  stands  in 
the  relation  of  a  surety  towards  the  party  for  whose  accommo- 
dation the  indorsement  is  made,  and  may  recover  against  him 
the  costs  to  which  he  has  been  subjected;  2  but  he  does  not 
thereby  lose  the  character  of  an  indorser,  as  respects  the  holder 
of  the  note.  3  In  like  manner,  though  a  person  signs  a  note 
or  subscribes  his  name  under  that  of  the  drawer  of  a  bill  of 
exchange  as  a  surety,  he  is  responsible  to  the  holder  of  the 
paper  as  a  drawer;  and  if  the  drawee  accepts  a  bill  so  drawn 
without  funds,  he  may  recover  for  money  had  and  received 
against  both  the  parties,  principal  and  surety.  4  But  as  be- 
tween the  principal  and  surety,  the  latter  is  entitled  to  pro- 
tection in  the  character  of  a  surety ;  5  and  his  relation  as  such 
is  to  be  established  as  a  question  of  fact;  if  he  puts  his  name 
to  a  joint  and  several  promissory  note,  under  that  of  two 
others,  adding  the  word  surety,  it  must  be  shewn  whether  he 
signs  as  surety  for  one  or  both.  6 

Under  the  old  practice,  where  two  persons  signed  a  joint 
and  several  promissory  note,  and  one  of  them  added  to  his 
signature  the  word  surety,  it  was  held  that  no  recovery  could 
be  had  against  the  surety  in  the  name  of  the  payee  under  the 
money  counts;  because  as  to  him  the  note  was  not  evidence 
of  money  had  and  received.  7 

Where  the  surety  has  paid  the  money  on  his  principal's  debt, 
or  satisfied  the  debt,  the  law  implies  an  undertaking  on  the 
part  of  the  latter  to  refund  the  amount  paid,  and  it  was  for- 

1  Pain  v.  Packard,  18  John.  R.,  174;  Trimble  v.  Thome,  16  John.  R.,  162; 
Warner  v.  Beardsley,  8  Wend.  R.,  194. 

*  Baker  v.  Martin,  3  Barb.  R.,  634;  15  John.  R.,  273;  7  Bing.  R.,  217;  8 
Barn,  and  Cres.,407. 

1  Bradford  v.  Corey,  5  Barb.  R.,  461.  The  indorser  in  this  case  added  to  hi* 
signature  the  word  "  surety."  See  Sissou  r.  Barret,  2  Cotust.  R.,  406. 

*  Suydam  v.  Westfall,  2  Dcnio  R.,  206. 

•  Harris  r.  Warner,  13  Wend.  R.,  400. 

•  2  Comst.  R.,  406. 

1  Butler  v.  Rawson,  1  Denio  R.,  106;  8  Taunt.  R.,  787.  Under  the  Code, 
the  parties  liable  on  the  same  instrument  may  be  sued  in  the  same  action,  10 
Barb.,  638 


294  BILLS   OF  EXCHANGE  AND    PROMISSORY   NOTES. 

merly  held  that  the  proper  form  of  action  was  indebitatus 
assumpsit  for  money  paid,  i 

The  holder  of  a  dishonored  bill  of  exchange  has  a  right  of 
action  against  the  acceptor,  the  drawer,  and  each  of  the  indor- 
sers  who  have  been  properly  charged;  and  the  holder  of  a 
dishonored  note  has  a  right  of  action  against  the  maker  and 
each  of  the  indorsers  whose  liability  has  been  fixed  by  demand 
and  notice.  But  the  drawer  and  indorsers  are  so  far  regarded 
in  the  light  of  sureties  to  the  maker  and  acceptor  that  they 
are  discharged  by  the  holder's  accord  and  satisfaction  of  the 
maker's  or  acceptor's  liability.  2  And  if  an  indorser  takes  up 
a  note,  and  petitions,  as  a  creditor  to  the  amount  of  the  note, 
for  the  maker's  discharge  as  an  insolvent,  the  discharge  of 
the  maker  discharges  the  prior  indorsers  also.  3  So,  if  the 
holder  agrees  to  receive  from  the  maker  of  a  note,  or  from 
an  indorser,  other  securities,  and  extend  the  time  of  payment, 
he  thereby  discharges  all  subsequent  indorsers.  4 

As  long  as  the  holder  remains  passive,  all  his  remedies 
remain;  and  if  any  of  the  parties  are  discharged  by  the  act 
of  law,  the  holder  is  not  prejudiced  as  to  the  others.  But  the 
parties  are  all  responsible  for  the  payment  of  the  same  debt, 
and  if  the  holder  enter  into  an  agreement  with  a  prior  indorser 
in  the  morning,  not  to  sue  him  for  a  certain  period  of  time, 
and  could  then  oblige  a  subsequent  indorser  in  the  evening  to 
pay  the  debt,  the  latter  must  immediately  resort  to  the  very 
person  for  payment,  to  whom  the  holder  has  pledged  his  faith 
that  he  shall  not  be  sued.  5  To  avoid  such  an  absurdity  the 
law  holds  valid  the  agreement  made  by  the  holder  extending 

1  Powell  v.  Smith,  8  John.  R.,  249;  Witherby  v.  Mann,  11  John.  R.,  518. 
*  Douglass  v.  White,  3  Barb.  Ch.  R,,  621. 

3  Lynch  v.  Reynolds,  16  John.  R.,  41. 

4  Myers  v.  Wells,  5  Hill  R.,  463;  21  Wend.  R.,  108;  2  Sand.  R.,  189.     But 
taking  a  bond  and  warrant  of  attorney  from  an  indorser,  or  a  cognovit  for  a 
judgment,  and  giving  a  stipulation  to  delay  issuing  an  execution  for  a  certain 
length  of  time,  not  however,  extending  beyond  the  time  when  the  judgment 
might  have  been  obtained  on  a  litigation,  will  not  work  a  discharge  of  the 
indorser.    Hallett  v.  Holmes,  18  John.  R.,  28;  Sizer  v.  Heacock,  23  Wend., 
81. 

6  Per  Lord  Eldon.  in  English  v.  Darby,  2  B.  and  P.,  62. 


LOSS  OF  NEGOTIABLE  PAPER.  295 

the  time  of  payment,  and  declares  it  such  an  alteration  of  the 
original  contract  as  discharges  the  indorser.  i  But  the  law 
does  not  permit  an  invalid  agreement  to  have  that  effect.  -' 
Nor  does  an  agreement  made  with  an  indorser,  giving  him 
further  time  for  payment,  discharge  either  of  the  prior  parties 
to  the  note  or  bill.  3  Nor  is  the  rule  altered  by  the  fact  that 
the  paper  was  made  for  the  accommodation  of  the  indorser, 
at  whose  instance  the  time  of  payment  was  postponed.  4  The 
liability  of  the  prior  indorser  being  once  fixed,  it  is  his  duty 
to  take  up  the  note  or  bill  at  once;  and  if  he  neglects  to  do 
so,  he  cannot  complain  of  the  holder  for  delaying,  or  agreeing 
witli  a  subsequent  indorser  to  extend  the  time  of  payment; 
because  he  does  not  thereby  suffer  any  prejudice.  5 

LOSS  OF  NEGOTIABLE  PAPER. 

The  loss  of  negotiable  paper  transferable  by  mere  delivery, 
precludes  the  owner  from  maintaining  an  action  at  law  there- 
on. 6  This  rule  of  the  common  law  is  founded  on  the  prin- 
ciple, that  the  party  liable  thereon  cannot  be  called  upon  to 
pay  the  note  or  bill  unless  he  is  adequately  protected  against 
a  second  demand  for  the  same  debt;  a  protection  which  it  was 
formerly  supposed  only  a  court  of  equity  could  properly  pro- 
vide for.  7 

Under  the  statutes  of  this  state  :  "  In  any  suit  founded  upon 
any  negotiable  promissory  note  or  bill  of  exchange,  or  in  which 

1  9  Cowen  R.,  206;  Curia  per  Savage,  C.  J.  In  this  court,  the  maker  is  con- 
sidered the  principal  debtor,  and  the  indorser  as  a  surety;  and  the  surety  is 
bound  by  the  terms  of  his  contract.  If  the  creditor,  by  agreement  with  the 
principal  debtor,  without  consent  of  the  surety,  varies  these  terms  by  enlarging 
the  time  of  performance,  the  surety  Is  discharged;  fbr  he  is  injured,  and  his  risk 
is  increased. 

1  Hall  v.  Constant,  2  Hall,  185;  Planter's  Bank  v.  Sellman,  2  Gill,  and  John.. 
230;  12  Wheat..  664. 

1  Murray  v.  Judah,  6  Cowen  R.,  484;  Fentum  v.  Pocock,  5  Taunt.,  192. 

4  Watten  v.  Bank  of  Montgomery  Co.,  12  Serg.  and  R.,  883. 

•  6  Cowen  R.,  481. 

1  Pintard  v.  Tackington,  10  Joim.  R..  104;  Rowley  v.  Ball,  8  Cowen  R. 
803;  Kirby  v.  Sisson,  2  Wend.,  660;  Crowe  v.  Clay,  26  Eng.  Law  and  Eq. 
R.,451. 

T  Picrson  v.  Hutchinson,  2  Campb.,  211 ;  6  Vesey,  jun.,  81U. 


296  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

such  note,  if  produced,  might  be  allowed  as  a  set-off  in  the 
defence  of  any  suit,  if  it  appear  on  the  trial  that  such  note  or 
bill  was  lost  while  it  belonged  to  the  party  claiming  the 
amount  due  thereon,  parol  or  other  evidence  of  the  contents 
thereof  may  be  given,  on  such  trial,  and  notwithstanding  such 
note  or  bill  was  negotiable,  such  party  shall  be  entitled  to 
recover  the  amount  due  thereon  as  if  such  note  or  bill  had 
been  produced.  But  to  entitle  a  party  to  such  recovery,  he 
shall  execute  a  bond  to  the  adverse  party,  in  a  penalty  at 
least  double  the  amount  of  such  note  or  bill,  with  two  sure- 
ties, to  be  approved  by  the  court  in  which  the  trial  shall  be 
had,  conditioned  to  indemnify  the  adverse  party,  his  heirs  and 
personal  representatives,  against  all  claims  by  any  other  per- 
son on  account  of  such  note  or  bill,  and  against  all  costs  and 
expenses  by  reason  of  such  claim."  i 

This  statute,  it  will  be  observed,  applies  in  terms  only  to 
negotiable  paper  that  has  been  lost;  it  does  not  apply  unless 
it  is  shewn  affirmatively  that  the  paper  was  negotiable;  2  nor 
does  it  apply  where  the  instrument  has  been  deliberately  and 
voluntarily  destroyed,  and  there  is  nothing  in  the  case  account- 
ing for,  or  affording  any  explanation  of  the  act,  consistent 
with  an  honest  or  justifiable  purpose.  3  Though  supposed  to 
be  lost,  a  negotiable  instrument  does  not  fall  either  under  the 
doctrine  that  calls  for  indemnity  with  a  view  to  proceedings 
in  equity,  or  under  the  above  provisions  of  the  statute,  if 
found  and  produced  on  the  trial;  for  the  statute  applies  only 
to  the  remedy,  and  in  no  way  affects  the  rights  or  liabilities 
of  the  parties  arising  out  of  the  proceedings  to  charge  the 
drawer  or  indorser.  These  stand  upon  the  principles  of  com- 
mercial law,  the  same  as  before  the  enactment;  and  any 
defence  that  might  before  have  been  available  at  law,  if  the 

1  2  R.  S.,  503,  3d  ed.  When  a  party  to  the  action  is  allowed  to  prove  by 
his  own  oath  the  losg  of  any  instrument,  the  adverse  party  may  be  sworn  to 
disprove  the  loss  or  account  for  the  instrument. 

3  10  John.  R.,  104;  3  Wend  ,  344.  The  court  will  not  presume  a  lost  note 
to  have  been  negotiable. 

*  Blade  v.  Noland,  12  Wend.  R.,  173. 


LOSS  OF  NEGOTIABLE  PAPER.  297 

note  had  not  been  lost,  or  in  equity,  if  lost,  must  be  equally 
so  since  the  statute,  i 

On  account  of  its  transferable  character,  the  parties  liable 
on  a  negotiable  note  or  bill  of  exchange  have  a  right  to  demand 
an  indemnity  against  any  claim  founded  on  the  lost  instru- 
ment. On  the  payment  of  an  ordinary  debt,  the  debtor  has 
no  right  to  demand  a  receipt  or' voucher  for  its  payment;  2 
and  yet  the  demand  is  under  our  law  assignable,  so  as  to  vest 
a  right  of  recovery  in  the  assignee.  True,  the  law  protects 
him  in  the  act  of  paying  it  to  his  creditor,  notwithstanding  it 
has  been  assigned,  where  he  pays  in  good  faith  without  notice 
of  the  assignment;  though  it  does  not  protect  him  against  the 
chances  of  a  law  suit.  3  Following  this  analogy,  it  has  been 
held  in  a  neighboring  state  that  the  owner  of  a  negotiable 
note  lost  after  it  became  due,  may  recover  upon  it  without 
producing  the  note;  on  the  ground  that  a  dishonored  note  can 
only  be  transfered  subject  to  the  equities  existing  between 
the  original  parties.  4  The  rule  as  held  in  this  state  and  in 
England  is  different;  if  the  action  be  upon  a  negotiable  note, 
such  as  a  note  payable  to  bearer,  or  to  order  and  indorsed  in 
blank,  and  afterwards  lost  or  stolen,  the  plaintiff  cannot 
recover  by  proving  the  execution  of  the  note,  his  title  to  it, 
and  that  it  was  lost  after  it  became  due,  unless  he  proceeds 
under  the  statute.  5 

1  Smith  v.  Rockwell,  2  Hill  R.,  482. 

'  Parsons  on  Contr.,  155,  156;  6  Eap.  R.,  48.  In  England,  the  creditor  is 
required  by  statute  to  give  a  written  receipt  for  the  payment  of  money,  under 
a  penalty  of  ten  pounds ;  but  the  debtor  is  not  permitted  to  demand  a  receipt 
as  a  condition  of  paying  his  debt.  43  Geo.  3,  c.  126,  §  5;  Laing  v.  Meader,  1 
C.  and  P.,  257;  but  sec  Richardson  v.  Jackson,  8  M.  and  W.,  298. 

*  Muir  v.  Schenck.  3  Hill  R..  228. 

*  Jones  T.  Fales,  5  Mass.  R.,  101.    There  were  two  trials  In  this  action,  and 
the  notes  were  produced  and  proved  at  the  first,  but  lost  before  the  second 
trial,  when  the  plaintiff  was  allowed  to  prove  their  contents  and  recover  on 
them. 

*  Rowley  v.  Ball,  8  Cowen  R..  803;  Kirby  v.  Sisson,  2  Wend..  660;  Crowe 
T.  Clay,  18  Eng.  L.  and  Eq.,  614,  S.  C.  26  Eng.  Law  and  Eq.  R.,  461.     This 
was  an  action  for  goods  sold;  and  it  was  held  in  it  that  a  plea  that  a  bill  of 
exchange  had  been  accepted  by  the  deft  for  them  and  lost,  was  good,  though  it 
did  not  allege  that  the  bill  was  over  due,  or  that  the  plaintiff  had  indorsed  it. 

17 


298  BILLS   OF  EXCHANGE  AND  PROMISSORY    NOTES. 

In  an  English  case,  where  an  action  was  brought  by  the 
indorsee  of  a  bill  of  exchange  against  the  acceptor,  and  it 
was  shewn  that  the  plaintiff  was  the  holder  of  the  bill,  and 
that  it  was  overdue  when  it  was  lost;  that  the  plaintiff'  then 
offered  the  defendant  an  indemnity,  but  he  refused  to  pay  the 
amount,  unless  the  bill  was  produced  and  delivered  up  to 
him;  Lord  Tenterden,  C.  J.,  delivering  the  opinion  of  the 
court,  says :  "  Amid  conflicting  opinions  the  proper  course  is, 
to  revert  to  the  principle  of  these  actions  on  bills  of  exchange, 
and  to  pronounce  such  a  decision  as  may  best  conform  thereto. 
Now,  the  principle  upon  which  all  such  actions  are  founded 
is  the  custom  of  merchants.  The  general  rule  of  the  English 
law  does  not  allow  a  suit  by  the  assignee  of  a  chose  in  action. 
The  custom  of  merchants,  considered  as  a  part  of  the  law, 
furnishes,  in  this  case,  an  exception  to  the  general  rule. 
What,  then,  is  the  custom  in  this  respect  1  It  is,  that  the 
holder  of  the  bill  shall  present  the  instrument,  at  its  maturity, 
to  the  acceptor,  demand  payment  of  its  amount,  and  upon 
receipt  of  the  money  deliver  up  the  bill.  The  acceptor  pay- 
ing the  bill  has  a  right  to  the  possession  of  the  instrument  for 
his  own  security,  and  as  his  voucher  and  discharge  pro  tanto 
in  his  account  with  the  drawer.  If,  upon  an  offer  of  payment, 
the  holder  should  refuse  to  deliver  up  the  bill,  can  it  be 
doubted  that  the  acceptor  might  retract  his  offer  or  retain  his 
money  ?  And  if  this  be  the  right  of  an  acceptor,  ready  to 
pay  at  the  maturity  of  the  bill,  must  not  this  right  remain  the 
same  if,  though  not  ready  at  that  time,  he  is  ready  afterwards; 
and  can  his  right  be  varied  if  the  payment  is  to  be  made  under 
a  compulsory  process  of  law  ?  The  foundation  of  his  right, 
his  own  security,  his  voucher,  and  his  discharge  toward  the 
drawer,  remain  unchanged.  As  far  as  regards  his  voucher 
and  discharge  toward  the  drawer,  it  will  be  the  same  whether 
the  instrument  has  been  destroyed  or  mislaid.  With  respect 
to  his  own  security  against  a  demand  by  another  holder  there 
may  be  a  difference.  But  how  is  he  to  be  assured  of  the  fact 
either  of  the  loss  or  destruction  of  the  bill  ?  Is  he  to  rely 
upon  the  assertion  of  the  holder,  or  to  defend  an  action  at  the 


LOSS    OF    NEGOTIABLE    PAPER.  299 

peril  of  costs  ?  And  if  the  bill  should  afterwards  appear  and 
a  suit  be  brought  against  him  by  another  holder,  a  fact  not 
absolutely  improbable  in  the  case  of  a  lost  bill,  is  he  to  seek 
for  the  witnesses  to  prove  the  loss,  and  to  prove  that  the  new 
plaintiff  must  have  obtained  it  after  it  became  due?  Has  the 
holder  a  right,  by  his  own  negligence  or  misfortune,  to  cast 
his  burden  upon  the  acceptor,  even  as  a  punishment  for  not 
discharging  the  bill  on  the  day  it  became  due  1  We  think 
the  custom  of  merchants  does  not  authorise  us  to  say  that  this 
is  the  law.  Is  the  holder,  then,  without  remedy?  Not 
wholly  so.  He  may  tender  sufficient  indemnity  to  the  ac- 
ceptor, and  if  it  be  refused,  he  may  enforce  payment  there- 
upon in  a  court  of  equity.  And  this  is  agreeable  to  the  mer- 
cantile law  of  other  countries.  In  the  modern  Code  de  Com- 
merce of  France,  this  is  distinctly  provided ;  and  the  provision 
is  not  new  in  the  law  of  that  country,  for  it  is  found  also  in 
the  Ordonnance  de  Commerce  of  Louis  the  Fourteenth."  1 

All  authorities  agree  that  the  party  called  upon  to  pay  the 
amount  due  upon  a  lost  negotiable  instrument  which  is  trans- 
ible  by  mere  delivery,  is  entitled  to  demand  a  reasonable 
acquittance  and  discharge  from  the  obligation.  2  Where  the 
strict  common  law  rule  prevails,  as  in  this  state  before  the 
enactment  of  the  statute,  it  is  on  the  ground  that  it  is  better 
for  the  parties  to  go  into  a  court  of  equity  where  all  the  cir- 
cumstances of  the  loss  can  be  better  investigated,  and  a  suit- 
able indemnity  better  estimated  and  adjusted.  3  Where  a  dif- 
ferent rule  prevails,  a  recovery  is  allowed,  in  the  case  of  a  ne- 
gotiable note  lost  before  it  became  due,  on  condition  that  the 
plaintiff  files  or  executes  and  delivers  to  the  defendant  a  suf- 
ficient bond  of  indemnity;  so  that  in  truth  the  real  distinction 
between  the  two  rules  is  one  of  degree  and  practice  rather 
than  principle.  4  Lord  Tenterden  assumes  that  according  to 

1  Hansard  v.  Robinson,  7  Barn,  and  Cress.,  90,  decided  in  1827;  Wilder  v. 
Seelye,  8  Barb.,  409. 

Tales  v.  Russell,  16  Pick.  R.,  315;  7  Mass.  R.,486;  6  id.  101;  1  Hall  R.: 
662. 

»8Cowen  R.,  301. 

4  In  England,  the  owner  of  a  lost  bill  must  give  security,  though  it  was  lost 
when  overdue;  and  the  same  rule  has  been  held  here.  7  Barn,  and  Cress., 


300  BILLS    OF   EXCHANGE  AND    PROMISSORY  NOTES. 

the  custom  of  merchants,  the  acceptor  of  a  bill  lost  after  it 
fell  due  has  a  right  to  demand  indemnity  the  same  as  if  it  had 
been  lost  before  it  became  due;  in  other  words,  that  he  is  en- 
titled to  protection  not  only  against  his  liability  on  the  instru- 
ment, but  also  against  the  burden  of  any  legal  contest  on  the 
bill.  Our  statute  evidently  proceeds  upon  the  same  princi- 
ple; for  it  makes  no  distinction  between  a  note  or  bill  lost 

90;  3  Cowen  R.,  301.  Not  so  in  Massachusetts.  In  Fales  v.  Russell,  Chief 
Justice  Shaw  says  :  "  The  objection  to  the  plaintiffs'  recovery  is,  that  they 
cannot  produce  and  file  the  notes.  Is  this  conclusion  correct  ?  The  delivery 
up  of  notes  and  other  negotiable  securities,  upon  payment  of  them,  and  the 
filing  of  them  in  court,  on  obtaining  judgment,  are  not  conditions  precedent  of 
the  right  to  recover  in  either  case.  That  right  depends  upon  other  grounds. 
The  delivery  up  of  the  notes  in  the  one  case,  and  the  filing  it  in  the  other,  is 
only  that  reasonable  acquittance  and  discharge,  adapted  to  the  nature  of  the 
obligation  performed,  which  any  man  upon  making  satisfaction  of  a  demand 
upon  him,  is  reasonably  entitled  to  have.  Inasmuch  as  it  is  payable  to  any 
holder,  the  actual  surrender  of  the  security  upon  payment  is  the  proper  and 
suitable  acquittance.  I  have  said  that  the  right  to  recover  depends  upon  other 
grounds,  to-wit :  that  the  note  was  made  by  the  defendants,  payable  to  the 
payee  or  order ;  that  it  was  duly  indorsed  by  him  to  the  plaintiff,  who  became 
the  bonajide  holder.  All  these  must  appear,  and  in  general  the  presence  of 
the  note  is  necessary  to  enable  the  plaintiff  to  prove  them ;  but  they  may  be 
proved  without  producing  the  note,  and  in  the  present  case  they  are  admitted. 
The  plaintiffs  having  proved  title  in  themselves,  by  a  well  known  rule  of  evi- 
dence, such  title  will  be  presumed  to  continue,  till  a  transfer,  release  or  satis- 
faction is  shewn.  Upon  a  case  like  this,  where  a  note  has  been  lost  after  it 
was  due,  it  has  often  been  held  that  a  plaintiff  is  entitled  to  recover  without 
the  note.  Jones  v.  Tales,  5  Mass.  R.,  101.  But  the  title  is  in  fact  the  same; 
the  only  difference  is,  that  the  defendants  are  exposed  to  greater  risk  in  the 
one  case  than  in  the  other,  because,  if  lost  before  it  was  due,  there  is  a  possi- 
bility that  it  may  have  been  negotiated  to  a  bona  fide  holder  in  the  ordinary 
and  regular  course  of  business,  before  it  was  due.  But  as  this  does  not  affect 
the  plaintiff's  title  or  his  actual  and  real  interest  in  the  debt,  and  in  the  security, 
according  to  its  tenor,  but  only  leaves  the  defendant  exposed  to  a  hazard, 
which,  according  to  mercantile  law  and  the  usage  of  trade,  it  is  not  understood 
that  he  is  to  take,  we  think  he  ought  to  be  protected;  and  this  court,  as  a 
court  of  law,  holding  a  just  regulating  power  over  the  judgments  and  proceed- 
ings before  them,  have  authority  to  prescribe  an  equivalent  security  to  the 
defendants,  by  a  sufficient  and  reasonable  indemnity.  *  *  *  Considering 
it  in  this  view,  that  the  production  of  the  note  is  not  essential  to  the  plaintiff's 
title,  but  only  to  the  defendant's  reasonable  security,  it  appears  to  us  that  the 
objection  that  a  court  of  law  has  no  jurisdiction  to  order,  or  to  judge  of  the 
sufficiency  of  an  indemnity,  is  rather  ideal  than  solid,  and  ought  not  to  prevail 
when  the  consequence  would  be  an  entire  failure  of  justice."  Judgment  for 
plaintiffs  on  filing  a  sufficient  bond  of  indemnity  with  sureties. 


LOSS  OF  NEGOTIABLE  PAPER.  301 

before,  and  one  lost  after  it  fell  due;  and  it  requires  a  bond  of 
indemnity  not  only  against  any  claim  that  may  be  founded  on 
the  paper,  but  also  against  all  costs  and  expenses  by  reason  of 
such  claim. 

It  is  clear  from  the  reason  of  the  rule,  that  the  parties  liable 
on  a  negotiable  note  or  bill  of  exchange  that  has  been  lost, 
cannot  under  all  circumstances  demand  an  indemnity  before 
making  payment,  or  as  a  condition  of  paying  the  demand.  If 
it  is  shewn,  for  instance,  that  the  note  in  suit  was  in  the  cus- 
tody of  a  person  acting  as  the  agent  of  the  plaintiff,  and  that 
person  is  called  and  testifies  that  he  has  mislaid  the  note  and 
cannot  find  it  after  having  made  a  diligent  search,  that  it  has 
not  been  delivered  or  put  into  the  hands  of  any  other  person, 
and  that  he  is  confident  it  has  been  destroyed;  it  has  been 
held  that  this  is  evidence  sufficient  to  carry  the  case  to  the 
jury,  on  the  question  whether  or  not  the  note  is  still  in  ex- 
rice,  or  has  been  destroyed.  1  It  is  enough  if  it  be  shewn 
that  the  defendant,  the  maker  of  the  note,  cannot  be  again 
called  upon  for  its  payment.  2 

Evidence  that  shews  a  note  or  bill  to  have  been  accidentally 
destroyed,  or  burned  up  under  circumstances  repelling  any 
fraudulent  design  on  the  part  of  the  holder,  puts  the  plaintiff 
in  the  same  situation  in  relation  to  the  parties  liable  thereon, 
which  he  occupies  when  he  brings  an  action  on  a  lost  note  that 
was  not  negotiable  or  not  transferable  by  delivery.  3  And 
notwithstanding  the  reasoning  of  Lord  Tenterden,  already 
quoted,  maintains  the  right  of  the  party  called  upon  to  pay 
the  bill,  to  demand  the  surrender  of  the  bill  as  his  voucher, 
it  is  pn-tty  well  settled  that  the  owner  of  the  instrument  may 
recover  thereon  whenever  it  appears  that  it  was  not  indorsed 

1  Swift  v.  Stevens,  8 Conn.  R.,  331. 

*  Jones  T.  Fales,  5  Mass.  R..  101,  was  the  case  of  a  note  lost  from  the  flies 
of  the  court,  after  one  trial  bad  been  had  in  the  case;  and  Renner  v.  The  Bank 
of  Columbia,  9  Wheat.,  681,  was  a  case  where  the  note  was  in  court  a  few  days 
before,  and  proved  on  a  trial  against  the  maker,  and  afterwards  mislaid. 

1  Blade  v.  Noland,  12  Wend.  R.,  173.  It  is  not  necessary  to  shew  that  the 
instrument  was  not  lost  by  the  negligence  or  laches  of  the  plaintiff  or  his 
attorney,  to  entitle  him  to  prove  the  contents.  Livingston  v.  Rogers,  2  John. 
Cas.,  488. 


302 


BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 


by  him,  and  that  it  was  so  drawn  or  indorsed  to  him  at  the 
time  it  was  lost  that  it  could  not  be  transfered  without  his 
indorsement,  i  The  reason  is,  that  a  bill  or  note  so  drawn  or 
indorsed  can  never  rise  up  in  judgment  against  the  party 
called  upon  to  pay  it;  and  neither  the  finder  of  it  nor  a  thief 
who  has  stolen  it  can  acquire  or  transfer  a  title  to  the  bill  or 
note,  by  sale  or  delivery;  and  it  is  well  known  that  a  forged 
indorsement  conveys  no  property  or  interest  in  the  instrument. 
So  that  in  such  cases  the  loss  of  the  bill  or  note  leaves  the 
parties  in  the  same  condition  as  if  the  paper  had  not  been 
negotiable. 

Now  the  loss  of  a  promissory  note,  check  or  draft  that  was 
not  negotiable,  does  not  prevent  the  owner  from  proving  the 
contents  and  recovering  thereon  in  an  action  at  law.  2  And 
where  a  note  is  shewn  to  be  lost  or  destroyed,  and  the  fact 
does  not  appear  whether  it  was  negotiable  or  not,  the  court 
will  not  presume  it  to  have  been  negotiable;  or  if  negotiable, 
that  it  had  been  indorsed  in  blank.  3  But  where  a  negotiable 
note  is  given  for  money  lent,  for  goods  sold,  or  for  a  debt  due, 
the  creditor  is  not  allowed  to  recover  on  the  original  contract 
without  producing  and  canceling  the  note  on  the  trial,  or 
proving  that  it  has  been  destroyed  or  lost  under  circumstances 
showing  that  the  maker  cannot  be  again  called  upon  to  pay 
it.  4  This  is  on  the  principle  that  the  acceptance  of  negotiable 
paper  on  account  of  the  debt,  is  prima  facie  evidence  of  satis- 

1  Depew  v.  Wheelan,  6  Blackf.,  485 ;  Rolt  v.  Watson,  4  Bing.,  273.  In  this 
case  the  defendant  had  accepted  a  bill  payable  to  plaintiff  for  goods  sold,  and 
the  plaintiff  not  having  negotiated,  nor  indorsed  the  bill,  lost  it  and  then 
brought  an  action  for  the  purchase  money  of  the  goods,  and  was  allowed  to 
recover  at  law.  In  Champion  v.  Terry,  the  bill  had  been  indorsed  in  blank 
and  lost,  and  a  different  rule  was  held.  3  B.  and  B.,  295;  10  John.  R.,  104;  3 
Cowen  R.,  303;  2  Wend.,  550;  6  Wend.,  376;  Long  v.  Bailie,  2  Campb.,  214. 
In  this  case  the  bill  was  specially  indorsed  to  the  plaintiff,  and  when  lost  had 
not  been  indorsed  by  him,  and  he  had  a  verdict. 

4 10  John.  R.,  104;  2  Hill  R.,  482;  Charnley  v.  Grundy,  25  Eng.  Law  and 
Eq.  R.,318. 

3  3  Wend.,  344;  10,  John.  R.,  104. 

*  Holmes  &  Drake  v.  D'Camp,  1  John.  R.,34;  Pierson  v.  Hutchinson,  2 
Campb.,  211 ;  Dangerfield  v.  Wilby,  4  Esp.  R.,  159;  Angel  v.  Felton,  8  John. 
R.,  149;  Burdick  v.  Green,  16  id.  247;  Hughes  v.  Wheeler,  8  Cowen  R.,  77; 
10  John.,  104;  Francia  v.  Del  Banco,  2  Duer,  133;  25  Law  and  Eq.  R.,  451. 


LOSS  OF  NEGOTIABLE  PAPER.  303 

faction,  which  must  be  rebutted  by  producing  the  note  to  be 
canceled  or  giving  some  account  of  it  showing  the  creditor's 
right  to  recover. 

In  many  cases  it  is  not  possible,  nor  is  it  necessary  to  give 
direct  and  positive  evidence  of  the  destruction  or  loss  of  a 
bill  or  note;  nevertheless  the  party  seeking  to  recover  upon  it 
as  a  lost  instrument  must  establish  the  fact  that  it  has  been 
destroyed  or  lost,  in  such  a  condition  that  no  person  can 
acquire  the  title  to  it  as  against  the  defendant,  i  Proof  that 
the  defendant,  the  acceptor,  has  wrongfully  obtained  the  pos- 
session of  it,  is  sufficient  to  authorize  a  recovery  against  him 
at  law  on  the  bill.  2  Thus,  where  the  plaintiff  placed  a  bill 
of  exchange  in  the  hands  of  his  attorney  for  collection,  and 
he  went  out  of  his  office  leaving  the  bill  on  his  table,  and  on 
his  return  the  bill  was  missing,  and  a  clerk  proved  that  during 
the  attorney's  absence,  the  defendant  called  to  ask  for  time 
and  was  shown  into  the  attorney's  office  where  the  bill  was 
left,  where  he  remained  a  short  time  and  then  left,  and  the 
bill  could  not  afterwards  be  found,  and  a  notice  was  given  to 
the  defendant  to  produce  the  bill;  it  was  left  to  the  jury  to 
pn-sume  whether  or  not  the  defendant  had  taken  it  away,  and 
the  plaintiff  recovered  without  producing  the  bill,  on  proving 
its  contents.  3  Actual  possession  is  not  essential  to  a  right  of 
recovery.  4  On  a  well  known  and  familiar  principle,  the 
plaintiff  is  bound  to  account  for  the  non-production  of  the 
instrument  before  he  can  ask  to  introduce  inferior  and  second- 
ary evidence  of  its  contents.  Accordingly,  where  he  shews 
that  it  lias  been  destroyed,  or  burnt  up  by  himself,  he  must 
go  farther  and  shew  that  it  was  done  under  circumstances  that 
repel  all  inference  of  a  fraudulent  design  on  his  part.  5 

1  Swift  v.  Stevens,  8  Conn.  R.,  831. 

1  Smith  v.  McClure,  6  East.  477;  2Carapb.,  212;  Decker  r.  Mathews.  2 
K.-rnan  R.,  818;  10  John.  R.,  17^. 

1  6  East,  477;  Chitty  on  Bills,  266. 

4  Selden  v.  Pringle,  17:Barb.,  464. 

*  Blade  v.  Noland,  12  Wend.  178.  A  written  instrument  should  be  produced; 
1.  To  enable  the  court  to  give  a  right  construct  ion  to  it  from  the  word*;  2.  To 
see  that  there  are  no  material  erasures  or  interlineations;  8.  That  any  condi- 
tion, limitation,  or  power  of  revocation,  may  be  seen.  Lcyfleld's  case,  10 


304  BILLS    Or  EXCHANGE  AND  PROMISSORY    NOTES. 

Independent  of  the  statute  on  the  subject,  the  owner  of  a 
lost  note  or  bill  has  a  right  to  demand  payment  of  it,  on 
giving  to  the  party  liable  a  sufficient  indemnity;  and,  where 
payment  is  refused  on  a  tender  of  ample  indemnity,  the  owner 
may  enforce  the  collection  in  a  court  of  equity,  and  recover 
the  costs  of  the  proceeding,  i  And  it  seems  that  an  indorsee 
may  file  his  bill  in  equity  against  the  acceptor,  without  mak- 
ing the  drawer  or  prior  indorsers  parties  to  the  action.  2  In 
England  the  owner  of  an  inland  bill,  lost  before  due,  has  a 
right  by  statute  to  call  for  another  bill  of  the  same  tenor,  on 
giving  security  to  indemnify  against  the  lost  bill.  3  But  the 
court  will  not  call  on  a  party  to  renew  or  pay  a  lost  bill 
without  providing  him  with  a  satisfactory  indemnity.  4 

In  the  case  of  a  foreign  bill  of  exchange  drawn  in  sets,  if 
one  part  be  lost  by  the  drawee,  or  be  by  his  mistake  given  to  a 
wrong  person  or  otherwise  disposed  of,  so  that  the  holder  can- 
not have  a  return  of  the  bill,  either  accepted  or  not  accepted, 
it  is  said  that  the  drawee  is  bound  to  give  to  the  holder  or  to 
his  order  a  promissory  note  for  payment  of  the  amount  of  the 
bill  on  the  day  it  becomes  due,  on  delivery  of  the  second  part, 
if  it  arrive  in  time;  if  not,  upon  the  note;  and  that  if  the  ac- 
ceptor refuse  to  give  the  note,  the  holder  should  immediately 
protest  for  non-acceptance,  and  when  due  demand  the  money 
though  he  have  neither  note  nor  bill ;  and  that  if  payment  be 
refused,  a  protest  must  be  regularly  made  for  non-payment.  5 

1  Walmsley  v.  Child,  1  Ves.  sen.,  338,  344;  Toulmin  v.  Price,  6  Ves.,  288; 
Tercese  v.  Geray,  Finch's  Rep.,  301 ;  6  Ves.,  812;  16  Ves.,  430.  In  Burrows 
v.  Goodhue,  1  Iowa,  48,  the  complainant  was  required  to  pay  costs  of  the  suit. 

8  Davies  v.  Dodd.  4  Price,  176;  Macartney  v.  Graham,£2  Sim.,  285. 

*  9  and  10  Wm.  3,  c.  17,  which  is  applicable  to  promissory  notes;  Byles  on 
Bills,  302. 

4  Byles  on  Bills,  302. 

B  Beawes  pi.,  188;  Chitty  on  Bills,  270.  Foreign  bills,  as  we  have  seen,  are 
drawn  in  several  parts  or  sets,  in  order  that  the  holder,  having  lost  one  by  mis- 
carriage or  otherwise,  may  receive  his  money  on  the  other;  each  part  contain- 
ing a  direction  to  the  drawee  to  pay  on  condition  the  others  have  not  been 
paid.  And  in  an  action  on  the  bill,  the  part  protested  for  non-acceptance  must 
be  produced,  to  guard  against  a  subsequent  claim  by  an  acceptor  supra  protest, 
Wells  v.  Whitehead,  15  Wend.,  527. 

Coke,  936;  2  John.  Cas.,  488;  2  Caines,  363;  10  John.  R.,  374;  11  id.  446;  8 
id.  149;  3  Cowen,  303;  8  id.  77;  3  Wend.,  344;  8  East,  288. 


LOSS   OF    NEGOTIABLE   PAPER. 

The  statute  of  this  state  declares,  that  every  person  upon 
whom  a  bill  of  exchange  is  drawn,  and  to  whom  the  same  is 
delivered  for  acceptance,  who  shall  destroy  such  bill,  or  refuse, 
within  twenty-four  hours  after  such  delivery,  or  within  such 
other  period  as  the  holder  may  allow,  to  return  the  bill  ac- 
cepted or  non-accepted,  to  the  holder,  shall  be  deemed  to  have 
accepted  the  same,  i 

Where  an  indorsed  note  is  lost  by  the  holder,  tender  of  in- 
demnity should  be  made  to  both  maker  and  indorser  at  the 
time  of  demand  and  notice;  because,  as  the  former  is  not 
bound  to  make  payment  without  the  production  of  the  note, 
or  indemnity  in  case  of  loss,  for  that  very  reason  payment 
ought  not  to  be  required  of  the  latter  till  the  proper  steps  have 
been  taken  to  secure  his  immediate  recourse  against  his  prin- 
cipal. Besides,  the  indorsees  own  liability  upon  the  paper 
demands  indemnity  to  himself,  which  should  be  given  without 
delay,  so  that  he  may  be  in  a  situation  to  pay  the  demand  at 
any  time  after  notice  and  look  to  the  maker.  2  The  same  re- 
mark may  be  made  in  respect  to  the  drawer  and  indorsers  of 
a  bill  of  exchange. 

The  loss  of  a  bill  or  negotiable  note  does  not  change  the 
contract  entered  into  by  the  several  parties  to  the  instrument, 
in  any  material  particular :  its  only  effect  is  to  give  the  parties 
called  upon  to  pay,  a  right  to  demand  security  against  any 
further  or  different  liability  than  that  which  they  have 
assumed.  3  The  mode  of  demanding  payment  is  necessarily 
changed,  but  the  act  is  not  dispensed  with.  The  owner  can- 
not present  the  bill  or  note  for  payment,  as  the  holder  is  ordi- 
narily required  to  do;  but  he  can  make  a  valid  demand  of 
payment  by  tendering  to  the  maker  or  acceptor  a  proper 
indemnity,  even  where  he  refuses  to  pay  on  the  ground  that 
the  note,  being  lost,  is  not  presented.  4  And  the  indorser 

*2R.  S.,63,  3ded. 

*  Smith  v.  Rockwell,  2  Hill  R.,  482.  per  Ch.  J.  Nelson ;  see  also  8  Barb.  R.,408. 

*  7  Barn,  and  Cress.,  90;  Chitty  on  Bills,  268;  Story  on  Notes,  §  290. 

4  Freeman  v.  Boynton,  7  Mass.  R.,  483;  Woodbridge  v.  Brigham,  13  Mass. 
R.,  557.  Where  a  note  is  payable  at  a  particular  place,  the  general  rule  is 
that  the  holder  must  hare  the  note  there  to  be  surrendered  on  payment;  and 
if  the  maker  does  not  appear  and  pay  it .  notice  may  be  given  to  the  indorser 
of  non-payment. 


306  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

cannot  complain  that  a  demand  of  payment  is  defective,  which 
the  law  declares  legal  and  valid;  i  but  to  charge  him  as  an 
indorser,  it  is  in  all  cases  incumbent  on  the  holder  to  give  him 
notice  of  its  dishonor.  2  In  a  late  action  on  a  negotiable 
promissory  note  against  the  makers  and  indorser,  the  demand 
was  made,  and  notice  of  non-payment  given,  without  any 
objection  being  interposed  by  any  of  the  parties  on  account  of 
the  absence  of  the  note;  no  bond  of  indemnity  was  offered  to 
or  requested  by  the  makers  or  indorser,  and  it  did  not  appear 
that  either  knew  of  the  loss  till  the  suit  was  commenced ;  and 
the  note  being  found  before  the  trial,  the  proceedings  were 
held  sufficient  to  charge  the  indorser,  and  judgment  was  ren- 
dered for  the  plaintiff.  3 

It  makes  no  difference  whether  a  bill  has  been  accidentally 
destroyed  or  lost  by  the  owner;  it  is  incumbent  upon  him  in 
both  cases  to  make  a  regular  demand  of  payment  at  the  time 
it  becomes  due,  and  give  due  notice  of  non-payment  to  the 
drawer  and  indorsers,  in  the  same  manner  as  if  the  bill  had 
not  been  lost  or  destroyed.  4  Having  done  this,  the  drawer 
and  indorsers  are  legally  charged  with  liability  on  their  respec- 
tive contracts.  And  being  so  charged,  the  indorser  has  a 
right  to  demand,  on  payment  of  the  debt,  security  against  the 
lost  bill,  so  that  he  may  have  immediate  recourse  to  the  prior 
indorsers.  On  the  same  principle,  the  loser  is  bound  to 
indemnify  all  the  parties  responsible  on  the  lost  bill,  against 
any  claim  to  be  founded  on  the  instrument.  5  For  this  reason, 
where  the  bill  has  been  several  times  negotiated  and  then 
lost,  it  may  be  more  convenient  to  file  a  bill  in  equity  against 
all  the  parties  than  to  bring  an  action  at  law  against  one  of 

1  Whitwell  v.  Johnson,  17  Mass.  R.,  449.  It  is  the  usage  of  banks  in  Boston 
to  send  notice  to  their  customers  that  a  note  has  been  deposited  with  the  bank 
for  collections,  where  they  are  requested  to  call  and  pay  it,  and  this  is  held  a 
sufficient  demand. 

a  Gilbert  v.  Dennis,  3  Metcalf,  496.  This  case  involves  the  requisites  of  a 
good  notice. 

3  Smith  v.  Rockwell,  above  quoted. 

4  Thackray  v.  Blackett,  3  Campb.,  164.     Where  the  acceptor  has  accidentally 
destroyed  a  bill,  he  certainly  can  have  no  occasion  to  demand  an  indemnity. 

*  Chitty  on  Bills,  263;  Story  on  Promissory  Notes,  §  244,  290,  445. 


LOSS   OF    NEGOTIABLE   PAPER.  307 

the  indorsers.  Judgment  recovered  in  an  action  against  the 
acceptor  of  a  bill,  or  against  the  maker  of  a  note  that  has 
been  lost,  followed  by  satisfaction,  is  an  adjustment  of  the 
whole  transaction;  not  so  where  a  recovery  is  had  against  a 
party  entitled  to  recover  thereon  against  prior  parties,  i 

When  the  owner  of  bank  bills  cuts  them  into  two  parts  for 
the  purpose  of  transmission  by  mail,  and  sends  them  in  sepa- 
rate letters  or  by  different  conveyances,  and  one  half  is  lost 
and  the  other  comes  to  hand,  the  owner  is  entitled  to  recover 
against  the  bank  issuing  them  the  full  amount  of  the  bills, 
with  interest  from  the  day  payment  thereof  was  demanded. 
Severing  the  bills  does  not  destroy  their  negotiability,  so  as  to 
prevent  its  being  restored  by  putting  the  parts  again  together; 
but  in  their  severed  condition  neither  partis  negotiable  so  that 
it  can  ever  come  into  the  hands  of  a  bona  Jide  holder.  And 
therefore,  the  owner  of  them  is  entitled  to  demand  the  face  of 
the  bills,  the  same  as  if  they  had  been  actually  destroyed  or 
had  not  been  negotiable.  2 

Where  a  bill  of  exchange,  a  note  or  a  check,  drawn  payable 
to  bearer,  or  to  order,  and  indorsed  in  blank,  is  lost  or  stolen, 
the  owner  should  for  his  own  protection,  immediately  give 
notice  to  all  the  parties  not  to  pay  the  money  thereon  to  any 
person  but  himself;  and  he  should  publish  a  notice  as  exten- 
sively as  possible,  in  the  newspapers  where  that  is  the  most 
ready  and  efficient  mode  of  publication,  cautioning  all  persons 
against  taking  or  buying  the  lost  or  stolen  paper.  3  Of  course 

1  The  statute  of  this  state  allows  a  party  to  recover  in  any  suit  founded  upon 
a  negotiable  promissory  note  or  bill  of  exchange,  that  has  been  lost,  on  execu- 
ting a  bond  to  "  the  adverse  party,*'  conditioned  to  indemnify  him  against  all 
claims,  &c.  But  it  has  not  been  decidrcl  wlictlu-r  in  an  action  against  the 
indorser  of  a  lust  bill  under  the  statute,  the  plaintiff  is  bound  also  to  indem- 
nify the  prior  indorsers  and  drawer  of  the  bill,  it  having  been  accepted.  2  Hill 
R.,  484. 

3  Hinsdale  v.  The  Bank  of  Orange,  6  Wend.,  878;  Bank  of  Virginia  v.  Ward, 
6  Munf.,  169;  Patten  v.  Bank  of  So.  Car.,  2  Nott  and  M'Cord,  4G4;  Martin 
v.  Bank  of  U.  S-.  4  Wash.,  258;  U.  S.  Bank  v.  Sill,  6  Conn.,  106;  4  Rand., 
186. 

'  Such  was  the  course  pursued  in  Fales  v.  Russell,  16  Pick.,  815. 


308  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

the  notice  should  be  explicit  and  definite  in  describing  the 
lost  instrument,  as  to  date,  amount,  parties  and  time  when 
payable,  i  In  the  case  of  an  accepted  bill,  the  acceptor 
should  be  forthwith  notified  not  to  pay  the  bill  to  any  person 
but  the  owner. ;  2  in  the  case  of  a  note,  the  same  notice  should 
be  promptly  given  to  the  maker; 3  and  in  the  case  of  a  check 
or  an  unaccepted  draft,  the  drawee  or  the  bank  on  which  it  was 
drawn  should  be  directed  not  to  accept  or  pay  it  on  present- 
ment. 4  The  object  of  these  precautions  is  to  stop  the  payment 
and  arrest  the  circulation  of  the  paper,  and  thus  afford  the  legal 
holder  some  opportunity  of  tracing  and  recovering  his  property. 
The  conduct  to  be  pursued  by  the  loser  should  be  deter- 
mined with  a  view  to  the  transferable  quality  of  the  paper, 
and  the  rule  of  law  by  which  the  title  of  a  bona  fide  holder  is 
maintained  and  defended,  notwithstanding  any  defect  in  his 
chain  of  title.  Having  considered  this  principle  in  another 
connexion,  we  shall  speak  of  it  here  only  in  its  relation  to  lost 
or  stolen  bills  and  notes.  A  bank  note,  though  stolen,  be- 
comes the  property  of  him  who  gives  valuable  consideration 
for  it,  having  no  notice  or  knowledge  of  the  theft.  Lord 
Mansfield :  "  Bank  notes  are  treated  as  money,  as  cash,  in  the 
ordinary  course  and  transaction  of  business,  by  the  general 
consent  of  mankind ;  which  gives  them  the  credit  and  curren- 
cy of  money,  to  all  intents  and  purposes.  They  are  as  much 
money  as  guineas  themselves  are;  or  any  other  current  coin 
that  is  used  in  common  payments,  as  money  or  cash."  5  In 
legal  effect,  bank  bills  are  negotiable  paper,  and  being  paya- 
ble to  bearer,  are  transferable  like  any  similar  note  made  by 
a  private  person.  6 

1  Chitty  on  Bills,  253. 

"  Beckwith  v.  Corrall,  2  Car.  and  P.,  261 ;  3  Bing.,  144. 

8  16  Pick.,  315;  Story  on  Notes,  §  382. 

4  Chitty  on  Bills,  514.  A  banker  must  not  pay  after  a  notice  that  the  check 
has  been  lost,  nor  prematurely. 

6  Miller  v.  Race,  1  Burr.  452.  Bank  notes  are  not  like  goods,  chattels  or 
other  securities,  nor  are  they  treated  as  such. 

8  Hinsdale  v.  The  Bank  of  Orange,  6  Wend.,  378.  The  title  to  a  bank  bill 
is  to  be  established  or  impeached  in  the  same  manner  as  any  other  negotiable 
note.  Solomons  v.  The  Bank  of  England,  13  East,  135;  1  Rose.  99;  6Munf., 
169;  6  Conn.,  106.  So,  also,  a  check  payable  *'  to  the  order  of  bills  payable," 
is  in  effect  payable  to  bearer;  Willetts  v.  Phoenix  Bank,  2  Duer,  121. 


LOSS  OF  NEGOTIABLE  PAPER.  309 

It  was  at  one  time  held  in  England  that  the  purchaser  of  a 
lost  or  stolen  bill  could  not  recover  on  it  where  he  had  not 
used  reasonable  caution,  and  had  taken  the  bill  under  cir- 
cumstances which  ought  to  have  excited  suspicion;  and  the 
question  presented  to  the  jury  in  such  case  was,  whether  the 
party  who  took  the  lost  or  stolen  instrument,  took  it  under  cir- 
cumstances that  ought  to  have  excited  the  suspicion  of  a  prudent 
and  careful  man1,  to  which  was  sometimes  added  this  further 
question,  whether  the  loser  had  used  due  diligence  in  giving  ex- 
plicit and  immediate  notice  of  his  loss?  i  But  this  rule  has  been 
greatly  modified,  and  it  is  now  settled  that  the  title  of  an  in- 
dorsee for  value  can  only  be  defeated  by  shewing  that  he 
acted  in  bad  faith  in  taking  the  bill ;  and  the  true  question  for 
the  jury  is  held  to  be,  whether  the  purchaser  took  the  bill  in 
good  faith.  "  Gross  negligence  may  be  evidence  of  malajidesj 
but  it  is  not  the  same  thing."  2 

Chief  Justice  Shaw  states  the  doctrine  on  the  subject,  and 
the  reason  on  which  it  is  founded,  as  follows  :  The  law  in  re- 
gard to  bills  of  exchange  and  promissory  notes  is  so  framed  as 
to  give  confidence  and  security  to  those  who  receive  them  for 
valuable  consideration,  in  the  ordinary  course  of  business, 
when  payable  to  bearer  or  indorsed  in  blank  so  as  to  be  trans- 
ferable by  delivery;  and  in  general  a  party  taking  such  a  bill 
under  such  circumstances,  has  only  to  look  to  the  credit  of  the 
parties  to  it,  and  the  regularity  and  genuineness  of  the  signa- 
tures and  indorsements.  So  that  if  such  a  note  or  bill  be  made 
without  consideration,  or  be  lost  or  stolen,  and  afterwards  ne- 

1  Gill  v.  Cubit,  8  B.  and  C.,  466;  8  Bing.,  444;  11  Moore,  885. 

*G<  odman  v.  Harvey,  4  Ad.  and  El.,  870.  Lord  Denman,  C.  J.  :  "  The 
question  I  offered  to  submit  to  the  jury  was  whether  the  plaintiff  had  been 
guilty  of  gross  negligence  or  not.  I  believe  we  are  all  of  opinion  that  gross 
negligence  only  would  not  be  a  sufficient  answer,  where  the  party  has  given  a 
consideration  for  the  bill.  Gross  negligence  may  be  evidence  of  ma  I  a  fide*, 
but  is  not  the  same  thing  We  have  shaken  off  the  last  remnant  of  the  con- 
trary doctrine.  Where  the  bill  has  passed  to  the  plaintiff  without  any  proof 
of  bad  faith  in  him,  there  is  no  objection  to  his  title."  King  v.  Milson.  2 
Campb..  5.  Possession  is  prima  facie  evidence  of  title  to  negotiable  instru- 
ments; therefore  in  trover  for  a  bank  note  it  is  not  a  prima  facie  case  for  the 
plaintiff  to  prove  that  the  note  belonged  to  him,  and  that  the  defendant  after- 
wards converted  it. 


310  BILLS  OF  EXCHANGE  AND    PROMISSORY   NOTES. 

gotiated  to  one  having  no  knowledge  of  these  facts,  for  a  valu- 
able consideration  in  the  usual  course  of  business,  his  title  is 
good  and  he  shall  be  entitled  to  receive  the  amount,  i  The 
credit  which  the  law  thus  attributes  to  notes  and  bills  of  ex- 
change that  are  transferable  by  delivery,  arises  mainly  from 
the  confidence  inspired  by  actual  custody  and  possession,  and 
the  actual  delivery  of  the  security  upon  such  negotiation.  To 
so  great  an  extent  is  this  principle  carried,  that  in  regard  to 
bank  notes,  and  in  most  respects  in  regard  to  all  other  bills 
and  notes  transferable  by  delivery,  the  title  and  possession  are 
considered  to  be  inseparable.  And  it  will  be  presumed  that 
the  party  thus  in  possession  of  a  bill,  holds  it  for  value,  until 
the  contrary  appears;  and  the  burden  of  proof  is  on  the  party 
impeaching  his  title."  2 

The  party  in  possession  of  a  negotiable  instrument  is  prima 
facie  the  owner  of  it;  3  but  as  soon  as  it  is  shewn  to  have  been 
lost  or  stolen  from  the  true  owner,  the  presumption  is  changed, 
and  he  must  then  shew  not  only  what  consideration  he  gave 
for  it,  4  but  also  that  he  took  the  paper  in  good  faith  in  the 
ordinary  course  of  business ;  after  that  the  party  resisting  pay- 
ment may  undoubtedly  reply,  impeaching  the  good  faith  of 
the  transaction;  which  he  may  do  by  either  direct  or  circum- 
stantial evidence,  that  the  plaintiff  acted  in  bad  faith  in  taking 
the  bill.  5  This  appears  to  be  the  order  of  the  trial,  notwith- 
standing the  strong  presumption  in  favor  of  the  indorsee  for 
value.  The  onus  of  proof  to  show  that  he  came  honestly  by 
the  bill  or  note  lies  on  the  plaintiff;  is  cast  upon  him  by  proof 
of  the  instrument's  having  been  lost  by  accident  or  theft.  6 

1 1  Burr.  452;  Peacock  v.  Rhodes,  2  Doug.,  633;  Grant  v.  Vaughan,  3  Burr. 
1516. 

2  Wheeler  v.  Guild,  20  Pick.  R.,  550;  Collins  v.  Martin,  1  Bos.  andPul.,  648. 

*  2  Carapb.,  5;  4  Sand.  R.,  97. 

4  Rees  v.  Marquis  of  Headfort,  2  Campb.,  574. 

6  3  Burr.,  1516;  see  a  review  of  the  authorities  on  the  subject,  in  Stalker  v. 
McDonald,  6  Hill  R.,  93. 

8  Saunders  on  Pleading  and  evidence,  628,  5th  Amer.  ed;  Mills  v.  Barber, 
1  M.  and  W.,  425;  9  B.  and  C.,  208.  Where  a  defendant,  sued  as  the  maker 
or  indorser  of  a  negotiable  note,  proves  that  it  was  obtained  from  him  by  fraud 
or  fraudulently  put  in  circulation,  the  plaintiff  must  prove  that  he  gave  value 
for  it;  and  the  defendant  must  prove  that  plaintiff  received  it  with  notice. 
Catlin  v.  Hanson,  1  Duer  R.,  309;  Rochester  v.  Taylor,  23  Barb.,  18. 


CHAPTER   VI. 
CONSIDERATION. 

Negotiable  notes  and  bills  of  exchange  are  presumed  to 
have  been  given  for  a  valid  and  adequate  consideration ;  and 
whether  they  purport  to  have  been  given  for  value  received 
or  not,  it  is  unnecessary  for  the  plaintiff,  in  the  first  instance, 
to  allege  or  prove  a  consideration,  i  In  this  respect  they 
differ  from  other  parol  contracts. 

Between  the  original  parties  the  consideration  may  be 
inquired  into;  but  the  burden  of  proof  lies  on  the  defendant 
to  rebut  the  presumption  raised  by  implication  of  law.  2 

In  like  manner,  where  the  plaintiff  sues  in  behalf  of  one 
of  the  original  parties,  the  merits  of  the  case  and  the  terms 
upon  which  the  bill  or  note  was  given,  are  open  for  examina- 
tion, equally  as  if  the  suit  were  between  the  immediate  parties 
to  the  instrument.  3 

The  consideration  may  also  be  inquired  into  where  the 
plaintiff  takes  the  note  after  it  becomes  due,  or  has  been  dis- 
honored^ for  in  such  cases  the  purchaser  takes  it  subject  to 
every  defence  which  existed  against  it  before  it  was  negotiated;  5 
but  it  lies  with  the  defendant  to  shew  that  the  plaintiff  received 
it  after  it  was  due.  6  In  other  words,  the  presumption  is  that 

1  Hughes  v.  Wheeler,  8  Cowen  R.,  88. 

1  Halliday  v.  Atkinson,  5  Bar.  and  Ores.,  508;  Cniger  v.  Armstrong,  8  John. 
C»s.,5,  259;  4  Uill  R.,  442. 

*  Denniston  v.  Bacon,  10  John.  R.,  198;  Grew  v.  Burditt,  9  Pick.  R.,  26&. 
Under  our  recent  Code  all   action*  must  be  brought  in  the  name  of  the  real 
party  in  interest,  except  where  the  plaintiff  sues  as  trustee,  Sec. 

4  Johnson  v.  Bloodgood,  1  John  Gas.,  61;  Jones  v.  Caswell,  3  id.  29;  Lan- 
sing v.  Lansing,  8  John.  R.,  454;  5  Wend.,  600. 

•  Williams  v.  Matthews,  8  Cowen,  252. 
«  Pinkerton  v.  Bailey,  8  Wend.,  600. 


312  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

the  plaintiff  acquired  it  in  the  usual  course  of  business  and 
before  maturity,  i 

There  is  still  another  class  of  cases  in  which  the  considera- 
tion may  be  inquired  into,  namely,  where  the  plaintiff  pur- 
chased the  note  or  bill  knowing  it  to  be  void  in  the  hands  of 
the  party  from  whom  he  received  it,  either  on  account  of 
fraud,  2  failure,  3  want  4  or  illegality  of  consideration.  5  When 
the  purchaser  takes  the  bill  or  note  with  notice  of  the  facts 
impeaching  its  validity,  or  with  sufficient  information  on  the 
subject  to  put  him  upon  his  inquiry,  he  cannot  recover  upon 
it  as  a  bona  fide  holder.  6  But  though  he  has  such  notice,  yet 
if  he  derives  his  title  from  a  bona  fide  holder  for  value,  he 
may  recover  thereon.  7 

As  we  have  said,  the  law  presumes  in  favor  of  negotiable 
paper  a  good  consideration,  until  the  contrary  appears;  8  it 
presumes  that  the  holder  is  the  owner  until  circumstances 
of  suspicion  are  shown;  9  it  presumes  in  relation  to  indorsed 
paper,  that  the  indorsement  was  made  before  it  became  due;  10 
that  the  party  in  possession  took  the  same  in  the  usual  course 
of  business,  for  value;  n  that  the  maker  of  a  note  is  the  pri- 
mary debtor;  12  and  that  the  acceptor  of  a  bill  of  exchange  is 
primarily  liable  thereon,  is  These  presumptions,  designed  to 
facilitate  the  use  and  negotiation  of  commercial  paper,  yield 

I  Pratt  v.  Adams,  7  Paige,  615. 

'Robinson  v.  Reynolds,  2  Adol.  and  Ellis,  (N.  S.)  196,  211  ;  Hascall  v. 
Whitmore,  19  Maine,  102;  Smith  v.  Hiscoek,  14  id.  449. 

3  Cone  v.  Baldwin,  12  Pick.  R.,  545;  Rumsey  v.  Leek,  5  Wend.,  20;  Hall  v. 
Hall,  8  Conn.,  336. 

4  Skilding  v.  Warren,  15  John.  R..  270. 
B  Deering  v.  Chapman,  9  Shepley,  488. 
•  Small  v.  Smith,  1  Denio,  583. 

7  19  Maine,  102;  14  id.  449;  2  Adol.  and  Ellis,  N.  S.,  196,  211. 

8  Goshen  Turnpike  Co.  v.  Huntin,  9  John.  R.,  217;  12  Wend.  R.,  484;  13 
Wend.,  557;  8  Cowen,  77. 

9  Cruger  v.  Armstrong.  3  John.  Gas.,  5.  259;  18  Barb.  R.,  344. 
M  Pinkertonv.  Bailey,  8  Wend.,  600;  7  Paige  Ch.  R.,  615. 

II  Nelson  v.  Cowing.  6  Hill  R.,  336;  Chitty  on  Bills,  69;  Story  on  Notes, 
$  7,  81. 

w  Bank  of  Orleans  v.  Barry,  1  Denio,  116. 

u  Anderson  v.  Anderson,  4  Dana.  352;  2  Burr.,  674-  Dougl.,  294;  8  Esp. 
R.,47. 


CONSIDERATION.  313 

to  evidence,  and  are  generally  controlled  by  the  actual  facts, 
where  the  inquiry  or  defence  is  admissible  between  the  parties 
to  the  action. 

It  deserves  to  be  mentioned  in  the  outset,  that  a  note  which 
has  been  executed  and  delivered  cannot  be  contradicted,  nor 
can  its  legal  effect  be  controlled  by  oral  evidence  that  it  was 
to  have  no  validity  except  in  a  certain  event  1  When  the 
parties  have  deliberately  put  their  engagements  in  writing,  in 
such  terms  as  import  a  legal  obligation,  without  any  uncer- 
tainty as  to  the  object  or  extent  of  such  engagement,  it  is  pre- 
sumed that  the  whole  contract  of  the  parties,  and  the  extent 
and  manner  of  their  undertaking,  has  been  reduced  to  writing; 
and  hence  oral  testimony  of  a  previous  colloquium  between  the 
parties,  or  of  conversation  and  declarations  at  the  time  when 
it  was  completed,  will  not  be  admitted  to  substitute  a  new 
and  different  contract  from  that  actually  committed  to 
writing.  2  Thus,  parol  proof  is  inadmissible  to  show  that 
there  was  a  mistake  in  the  time  of  payment  mentioned  in  a 
note;  3  or  to  shew  that  an  absolute  agreement  for  the  pay- 
ment of  money  was  to  be  performed  only  in  a  certain  event;  4 
<  >r  that  a  party  indorsing  a  note  did  so  on  condition  that  it 
should  be  renewed.  5 

On  the  same  ground,  parol  evidence  will  not  be  admitted  of 
an  agreement  entered  into  at  the  time  the  note  was  given,  that 
an  account  which  the  maker  then  held  against  the  payee 

1  Erwin  v.  Saunders,  1  Cowen  R.,  249;  Payne  v.  Ladue,  1  Hill,  116. 

*  Stackpole  v.  Arnold,  11  Mass.  R.,  27.    Per  Parker,  J.:  "  Upon  examina- 
tion, we  think  that  evidence  of  a  want  of  consideration  has  only  been  admitted 
where  fraud  has  been  practiced  upon  the  party  to  be  charged,  or  there  has  been 
a  failure  of  the  consideration,  or  some  illegality  in  the  transaction."    But  see 
Hill  y.  Buckminster,  5  Pick.  R.,  391 ;  6  id.  427;  3  id.  207.    A  guaranty  cornea 
within  rule  stated  in  the  text.     Hunt  v.  Adams,  7  Mass.  R.,  518. 

1  Fitzhugh  v.  Runyon,  8  John.  R.,  376,  189.  The  action  was  on  the  note; 
it  was  not  an  action  to  reform  the  instrument.  A  mistake  in  the  amount 
may  be  shewn  when  the  pleadings  permit  it.  Set-ley  v.  Engell,  3  Kern., 

4  Wells  v.  Baldwin,  18  John.  R.,45. 

*  Hoare  T.  Graham,  3  Campb.,  57.     The  note  given  expresses  the  contract 
of  the  parties;  Pratt  v.  Gulick,  13  Barb.  R.,  297. 

18 


314  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

should  be  deducted  from  the  note,  i  The  rule  does  not  ex- 
clude parol  evidence  to  shew  fraud,  or  want  of,  or  entire  fail- 
ure of  consideration.  2 

A  distinction  is  taken  in  some  cases  between  the  mere  pass- 
ing of  a  note  into  the  hands  of  the  payee  on  a  condition  that 
it  shall  not  take  effect,  as  a  delivered  instrument,  until  after 
the  happening  of  a  certain  event,  and  a  delivery  of  the  note 
upon  an  agreement  that  it  shall  be  void  if  the  event  does  not 
take  place.  3 

Where  one  of  the  heirs  to  an  estate  sold  and  executed  to 
his  brother  a  written  release  of  his  interest,  and  took  from  him 
notes  therefor,  and  there  was  a  verbal  understanding  between 
them  that  both  the  notes  and  the  release  were  to  be  void  unless 
a  settlement  with  the  other  heirs  should  be  obtained  on  cer- 
tain terms;  it  was  held,  in  an  action  on  one  of  the  notes,  that 
the  parol  agreement  could  not  be  proved,  because  it  was  not 
in  writing,  and  was  offered  to  defeat  a  written  contract  by 
shewing  that  it  was  to  become  void  on  the  happening  of  a  cer- 
tain contingency.  4  So,  where  the  defendant  gave  the  plain- 
tiff a  promissory  note  on  a  settlement  of  mutual  accounts  be- 
•  tween  them;  and  the  defendant  at  the  time  insisted  there 
must  be  some  mistake,  mentioning  an  account  for  twenty 
thousand  brick;  and  the  plaintiff,  the  payee  of  the  note, 
claimed  he  had  a  separate  receipt  for  that  item,  and  promised 
that  if  he  did  not  find  and  send  it  to  the  defendant,  he  would 
give  up  the  note;  it  was  adjudged  that  evidence  of  the  parol 
contract  could  not  be  given  to  contradict  the  written  agree- 
ment. 5  The  note  was  given  on  a  settlement;  the  promise  to 

1  Eaves  v.  Henderson,  17  "Wend.  R.,  190.  The  rule  does  not  apply  to  an 
account  to  accrue;  2  Taunt.,  170;  3  id.  76;  nor  to  a  subsequent  agreement  in 
relation  to  a  precedent  agreement.  Gardiner  v.  Callender,  12  Pick.,  374. 

4  Ely  v.  Killon,  5  Denio,  514. 

*  Goddardv.  Cutts,  2  Fairfleld  R.,  440;  5  Denio,  516. 

4  5  Denio,  514.  The  two  papers,  to  wit:  the  release  and  the  note,  were 
treated  as  constituting  one  agreement,  each  being  the  consideration  of  the 
other,  and  the  parol  agreement  was  excluded  as  being  only  a  collateral  under- 
taking. The  failure  of  that  was  at  most  only  a  partial  failure  of  the  considera- 
tion; 1  Hill,  116. 

6  Brown  v.  Hull,  1  Denio,  400.  The  want  of  a  consideration,  or  the  total 
failure  of  the  consideration  may  be  shewn ;  but  the  terras  of  the  contract  cannot 
be  varied  or  contradicted ;  M'Curtie  v.  Stevens,  13  Wend.,  527;  3  John.  R.,  463. 


CONSIDERATION.  315 

pay  was  absolute  and  unconditional,  and  the  evidence  offered 
went  to  control  OP  contradict  the  act  of  the  parties  and  the 
terms  of  the  note. 

The  rule  is  that  verbal  evidence  is  not  admissible  to  con- 
tradict or  vary  an  absolute  engagement  to  pay  money  on  the 
face  of  a  bill  or  note,  but  is  admissible  to  establish  a  defence 
on  the  ground  of  a  want  of  consideration,  failure  of  it,  or 
illegality,  i  A  verbal  agreement  made  at  the  same  time  and 
inconsistent  with  the  note,  cannot  be  proved  to  vary  its  terms,  2 
either  in  respect  to  the  time  of  payment,  3  the  period  of  col- 
lection, 4  or  the  condition  on  which  it  is  to  be  enforced.  5 
When  the  bill  or  note  states  on  the  face  of  it  an  adequate 
consideration,  the  defendant  is  not  permitted  to  shew  a  diffe- 
rent consideration  in  contradiction  to  his  written  admission;  as 
that  a  note  given  by  an  administratrix  and  expressed  to  be  "for 
value  received  by  my  late  husband,"  was  given  only  as  an 
indemnity,  and  that  the  payee  had  not  been  damnified. 

Want  of  consideration. — A  valid  and  sufficient  consideration 
is  of  the  very  essence  of  every  contract  not  under  seal;  and 
promissory  notes  and  bills  of  exchange  are  no  exception  to  the 
general  rule.  6  Where  a  note  is  made  for  the  accommodation 
of  the  payee,  it  is  self-evident  that  no  action  can  be  sustained 
thereon  in  the  name  of  the  payee  against  the  maker.  7  No 
more  can  the  drawer  of  a  bill  maintain  an  action  thereon 
against  the  drawee  who  has  accepted  the  same  for  his  accom- 

1  Chitty  on  Bills,  142;  Ridout  T.  Bristow,  1  Tyrw.,  84. 
'  Farnham  v.  Ingham.  6  Verm.,  114, 152 

*  Woodbridge  T.  Spooner,  8  B.  and  Al.,  223. 

*  Moseley  v.  Hanford.  10  B.  and  C.,  729. 

*  Spring  v.  Lovett,  11  Pick.,  417. 

4  Chitty  on  Con..  27,  28;  Berry  T.  Story,  26  Eng.  Law  and  Eq.  R.,  371.  A 
assigns  certain  judgments  to  B,  and  the  assignment  recites  that  the  price  or 
consideration  has  been  paid,  though  it  had  not  been  in  fact.  Shortly  after  B  gave 
A  his  I.  O.  U.  for  the  amount.  Held  that  there  was  a  sufficient  consideration 
for  the  I.  O.  U.,  which  might  be  treated  as  made  when  the  assignment  was 
delivered. 

1  Jackson  v.  Warwick,  7  Term  R.,  121;  Knight  T.  Hunt,  6  Bing.  R.,  432;  3 
Burr.  R.,  1568;  23  Wend.  R.,811. 


316  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

modation.  i  Between  the  parties  to  the  transaction  the  making 
of  such  a  note,  or  the  accepting  of  such  a  bill  is  a  mere  loan 
of  credit,  designed  to  enable  the  borrower  to  raise  money, 
either  generally  in  the  market  or  in  a  particular  manner;  and 
until  the  bill  or  note  is  negotiated,  no  obligation  attaches  to 
the  instrument.  "  If  a  person  gives  a  bill  of  exchange  for  a 
particular  purpose,  and  that  is  known  to  the  party  who  takes 
the  bill;  as,  if  for  example,  to  answer  a  particular  demand, 
then  the  party  taking  the  bill  cannot  apply  it  to  a  different 
purpose;  but  where  a  bill  is  given  under  no  such  restriction, 
but  merely  for  the  accommodation  of  the  drawer  or  payee, 
and  is  sent  into  the  world,  it  is  no  answer  to  an  action  on  that 
bill,  that  the  defendant  accepted  it  for  the  accommodation  of 
the  drawer,  and  that  that  fact  was  known  to  the  holder  :  in 
such  case  if  the  holder  gave  a  bona  fide  consideration  for  it, 
he  is  entitled  to  recover  the  amount,  though  he  had  full 
knowledge  of  the  transaction."  2 

On  the  same  principle  an  accommodation  indorser  is  never 
liable  on  a  note  or  bill  to  the  person  for  whose  accommodation 
the  indorsement  is  made;  but  where  he  lends  his  name  with- 
out any  restriction  as  to  the  manner  in  which  the  indorsed 
note  or  bill  is  to  be  used,  he  becomes  liable  thereon  to  the 
holder,  even  where  the  holder  receives  it  from  the  maker  in 
payment,  3  or  as  security  for  a  previous  debt.  4  On  the  other 
hand,  where  such  indorsement  is  made  for  a  special  purpose, 
such  as  to  enable  the  maker  to  obtain  a  discount  at  a  particu- 
lar bank,  or  to  raise  money  in  a  given  way  to  pay  a  certain 

1  Sparrow  v.  Chisman,  9  B.  andC.,  241.     So,  in  an  action  by  the  indorsee 
against  the  acceptor  of  a  bill,  it  is  competent  for  the  defendant  to  shew  that 
the  acceptance  was  for  the   accommodation  of  the  plaintiff,  and  that  he  has 
received  no  consideration  from  the  drawer,  and  that  it  was  agreed  that  the  bill 
when  due,  should  be  taken  up  by  the  plaintiff.     Thomson  v.  Clubley,  1  Mee. 
and  Wels..  212.     Neither  can  plaintiffs  as  indorsees  of  a  bill,  drawn  by  one  of 
them,  and  accepted  for  his  benefit,  he  agreeing  to  provide  for  the  bill,  recover 
thereon  against  the  acceptor.     Sparrow  and  others  v.  Chisman,  9  B.  and  C., 
241. 

2  Smith  v.  Knox,  3  Esp.  R.,  46,  per  Ld.  Eldon. 
s  Powell  v.  Waters,  17  John.  R.,  176. 

4  Bank  of  Rutland  v.  Buck,  5  Wend.,  66;  Grandin  v.  Le  Roy,  2.Paige,  Ch. 
R.,  609. 


CONSIDERATION.  317 

draft,  the  maker  has  no  right  to  use  the  note  in  any  other 
way;  and  if  he  does  so,  it  is  a  fraudulent  perversion  of  the 
paper  from  its  original  object  and  design,  i  And  if  the  person 
receiving  it  from  him  knew  the  circumstances  and  terms  of 
the  indorsement,  or  is  to  be  considered  chargeable  with  notice, 
he  cannot  recover  on  it  against  the  indorser.  -2 

The  defendant  indorsed  the  note  of  one  Groat  for  his 
accommodation,  and  in  order  to  enable  him  to  redeem  the 
property  of  one  of  his  neighbors  taken  in  execution;  the  note 
was  offered  at  a  bank  for  discount,  was  refused,  and  returned 
with  the  bank  marks  upon  it;  and  Groat  the  maker  after- 
wards transfered  the  note  to  the  plaintiff  for  twenty-three 
l"tt«-ry  tickets  at  five  dollars  each;  and  the  question  was, 
whether  the  facts  were  sufficient  to  charge  the  plaintiff  with 
notice  of  Groat's  improper  conduct  in  putting  off  the  note. 
By  the  court,  Marcy  J;  "  The  plaintiff  was  a  dealer  in  lottery 
tickets,  and  the  note  was  received  in  payment  for  tickets  sold 
to  Groat;  the  note  was  therefore  received,  it  is  said,  in  the 
due  course  of  business.  Even  if  so  received,  there  may  be 
attendant  circumstances,  destroying  the  bona fides  of  the  tran- 
saction. It  is  alleged  on  the  part  of  the  defendant,  that 
such  circumstances  exist  in  this  case.  Although  there  is  no 
one  circumstance  decisive  of  the  case,  yet  the  circumstances 
combined,  appear  to  me  to  be  sufficient  to  have  put  the 
plaintiff  on  enquiry.  In  the  first  place,  the  drawer  had  pos- 
session of  the  note ;  tliis  fact  warranted  the  inference  that  the 
defendant's  indorsement  was  for  his  accommodation.  The 
plaintiff  knew  it  had  been  in  the  bank;  he  must  therefore 
have  understood  one  of  two  things,  either  that  the  note  had 
been  negotiated  and  discounted  at  the  bank,  or  lodged  there 
for  collection  and  taken  up  by  the  drawer  before  its  maturity, 
(an  occurrence  not  very  probable,)  or  that  the  bank  had 
refused  to  discount  it.  Indeed,  I  think  the  latter  fact  was 
sufficiently  brought  to  the  knowledge  of  the  plaintiff;  he  was 

1  Kasson  v.  Smith,  8  Wend.,  437;  Williams  v.  Walbridge,  8  Wend.  R.,  415; 
Brown  v.  Taber,  5  Wend.,  668;  Denniston  v.  Bacon.  10  John.  R.,  198. 
•  Woodhull  v.  Holmes,  10  John.  R.,  231;  15  John.  R.,  274. 


318  BILLS    OF    EXCHANGE  AND  PROMISSORY    NOTES. 

told  the  note  had  been  in  the  bank,  and  it  had  marks  on  it 
made  at  the  bank.  He  was  also  applied  to  in  the  first  instance 
as  a  broker  to  discount  it.  Some  conseqence,  I  think,  should 
be  attached  to  the  fact,  that  after  the  drawer  had  failed  to 
obtain  money  on  it,  he  passed  it  off  for  a  large  quantity  of 
lottery  tickets,  for  which  he  gave  the  retail  price,  it  being 
known  that  he  was  not  a  dealer  in  that  article.  Again,  when 
passed,  it  had  almost  arrived  at  maturity,  it  having  but  eigh- 
teen days  to  run.  (It  was  a  sixty  day  note.)  All  these 
circumstances  combined  amount,  in  my  judgment,  to  a  suffi- 
cient notice  of  the  fraud  that  Groat  was  practicing  on  the 
defendant  in  putting  the  note  in  circulation."  i 

The  question  is  not  whether  the  holder  took  the  bill  or  note 
negligently  and  without  exercising  sufficient  prudence  and 
care;  but  whether  he  took  it  under  such  circumstances  as  to 
charge  him  with  receiving  it  mala  fide.  For,  unless  he  is 
chargeable  with  notice  of  the  misuse  or  misappropriation  of 
the  paper,  even  gross  negligence  will  not  affect  his  right  of 
recovery.  2  That  is  to  say,  when  the  bill  has  passed  to  the 
plaintiff  without  any  proof  of  bad  faith  in  him,  there  is  no 
objection  to  his  title.  3 

When  it  is  shewn  that  the  defendant  indorsed  the  note  for 
the  accommodation  of  the  maker,  and  that  he  has  diverted  it 
from  its  original  destination  and  fraudulently  negotiated  or 
put  it  in  circulation,  the  holder  cannot  recover  upon  it  against 
the  indorser,  without  shewing  that  he  received  it  in  good  faith, 
in  the  ordinary  course  of  trade,  and  paid  for  it  a  valuable 

1  Brown  v.  Taber,  5  Wend.  R.,  666. 

"Goodman  v.  Harvey,  4  A.  and  E.,  870.  This  case  overrules  the  previous 
doctrine  of  the  English  courts.  See  Gill  v.  Cubit,  3  Barn,  and  Cres.,  466; 
Snow  v.  Peacock,  2  C.  and  P.,  215;  S.  C.,  3  Bing.,  393;  Crook  v.  Jadis,  5  B. 
and  Ad.,  909,  1098. 

8  Uther  v.  Rich,  10  A.  and  E.,  784 ;  Hall  v.  Wilson,  16  Barb.  R.,  548;  Wheeler 
v.  Guild,  20  Pick.,  545.  Per  Ch.  J.  Shaw,  "  When  a  party  takes  a  bill  trans- 
ferable by  delivery,  not  overdue  nor  otherwise  apparently  dishonored,  for  valu- 
able consideration,  in  the  usual  course  of  business,  without  notice,  actual  or 
constructive,  that  the  holder  came  by  it  unlawfully  or  without  title,  he  will  be 
protected;  otherwise  not." 


CONSIDERATION.  319 

consideration,  i  In  other  words,  as  soon  as  it  appears  that  the 
maker  had  the  right  to  use  the  note  only  in  a  special  manner, 
and  that  it  has  been  misappropriated,  the  holder  must  shew 
that  he  took  the  same  innocently  and  for  value.  2  For  instance; 
where  the  defendant  indorsed  the  note  for  the  accommodation 
of  the  maker,  and  he  being  indebted  to  the  plaintiff*  delivered 
it  to  the  plaintiff's  agent,  with  notice  that  the  indorsement 
had  been  made  upon  a  condition  that  had  not  been  complied 
with,  it  was  adjudged  that  the  holder  could  not  recover.  3 

When  a  note  is  made  or  indorsed  for  a  special  purpose,  and 
the  object  of  making  or  indorsing  it  fails,  it  is  the  duty  of  the 
party  having  it  in  possession  to  return  the  note;  being  received 
upon  a  particular  agreement,  it  is  controlled  by  the  terms  of 
the  contract  between  the  parties.  4  But  whether  returned  or 
not,  it  is  void  in  the  hands  of  a  party  to  the  agreement;  5  and 
it  is  a  fraud  in  him  to  make  use  of  it  in  any  other  way  than 
that  agreed  upon. 

In  those  cases  where  the  note  has  effected  the  substantial 
purpose  for  which  it  was  designed  by  the  parties,  an  accom- 
modation maker  and  indorser  cannot  object  that  it  was  not 
effected  in  the  precise  manner  contemplated  at  the  time  of  its 
creation.  6  If  made  to  raise  money  on,  with  the  expectation 
of  having  it  discounted  at  a  particular  bank,  it  is  valid  in  the 
hands  of  a  person  who  advances  money  upon  it.  7  Though 
indorsed  for  the  accommodation  of  the  maker,  with  a  view  of 
having  the  note  discounted  at  a  bank  named,  still  if  that  was 

1  Woodhull  T.  Holmes,  10  John.  R.  231 ;  Skelding  v.  Warren,  15  John.  R., 
270;  5  Wend.  R.,  666;  6  Wend.  R.,  616. 

»  Wendell  T.  Howell,  9  Wend..  170. 

f  Small  v.  Smith,  1  Denio  R.,  683. 

4  10  John.  R.,  198.  Where  the  makers  of  a  note  indorsed  for  their  accom- 
modation, to  take  up  another,  misapply  it,  they  cannot  in  an  action  against 
them  object  that  it  was  negotiated  contrary  to  its  terms  and  the  object  and 
intent  for  which  it  was  made.  Wardell  T.  Hughes,  3  Wend.,  418;  Decker 
T.  Mathews,  2  Kernan  R.,  313. 

•  Kasson  v.  Smith,  8  Wend.  R.,  437. 

•  Powell  v.  Waters,  17  John.  R.,  176;  The  Bank  of  Chenango  v.  Hyde  and 
al.,  4  Cowen,  667;  Bank  of  Rutland  v.  Buck,  4  Wend.,  66;  2  Gall.,  233;  Pay- 
ton  T.  Coolidge,  2  Wheat.,  66. 

1  4  Cowen,  667. 


320  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

not  a  condition  of  the  indorsement  and  no  way  material  or 
important  to  the  indorser,  the  note  will  be  valid  against  him 
in  the  hands  of  an  individual  who  discounts  it.  i  In  order  to 
establish  a  diversion  of  the  note  from  the  purpose  for  which 
it  was  created,  an  agreement  as  to  the  manner  in  which  it  was 
to  be  used,  must  be  shewn.  A  mere  intimation  of  the  party 
accommodated,  that  he  "  wants  or  expects  to  get  it  discounted 
at  a  particular  bank,"  is  not  a  restriction  as  to  the  mode  of 
using  it.  2  Nor  is  a  direct  statement  on  his  part  that  he  wants 
the  accommodation  to  enable  him  to  get  a  discount  at  a  par- 
ticular bank,  with  the  view  of  making  a  given  purchase, 
proof  of  an  agreement  limiting  the  use  of  the  paper,  unless 
it  is  also  shewn  that  that  was  an  inducement  to  the  party 
signing  or  indorsing.  3  Till  the  contrary  appear,  it  is  to  be 
presumed  that  the  object  of  an  accommodation  note  or  bill  is 
to  enable  the  parties  thereto,  by  sale  or  other  negotiation 
thereof,  to  obtain  a  free  credit  and  circulation  thereof;  4  and 
this  object  would  be  wholly  frustrated,  unless  the  purchaser 
or  other  holder  for  value,  could  hold  such  a  bill  by  as  firm 
and  valid  a  title,  as  if  it  were  founded  in  a  real  business  tran- 
saction. In  short,  the  parties  to  every  accommodation  bill  or 
note,  hold  themselves  out  to  the  public  by  their  signatures  to 
be  absolutely  bound  to  every  person  who  shall  take  the  same 
for  value,  to  the  same  extent,  as  if  that  value  were  personally 
advanced  to  them,  or  on  their  account,  or  at  their  request. 

But  in  order  to  recover  on  such  paper  that  has  been  misap- 
propriated, the  plaintiff  must  have  received  the  same  in  good 
faith;  and  whatever  shews  him  to  have  acquired  the  paper 
mala  fide,  or  with  notice  of  facts  impeaching  its  validity,  will 
defeat  his  right  of  recotery.  5 

More  than  this;  where  a  note  or  bill  has  been  diverted  from 
its  original  destination,  in  violation  of  the  agreement  upon 

'17  John.  R..  176. 

a  Montross  v.  Clark.  2  Sand.  R.,  115. 

»  Mohawk  Bank  v.  Corey,  1  Hill  R.,  513. 

4  Per  Vanderpool.  J.,  in  Montross  v.  Clark,  2  Sand.,  115,  quoting  Story  on 
Bills,  §  191. 

•  5  Wend.,  600;  11  John.  R.,  128;  12  id.  306;  15  id.  270;  2  id.  50;  8  Wend., 
478;  1  Denio,  583;  Crook  v.  Jadis,  5  B.  and  Ad.,  909;  10  A.  and  E.,  784. 


CONSIDERATION.  321 

which  it  was  made  or  indorsed,  the  holder  cannot  recover 
upon  it  against  the  accommodation  mater  or  indorser,  without 
shewing  that  he  received  it  in  the  ordinary  course  of  trade, 
giving  for  it  a  valuable  consideration,  i  And  in  general, 
where  the  holder  takes  a  note  or  bill  after  it  is  due,  he  takes 
it  subject  to  every  defence  existing  against  it  in  the  hands  of 
the  person  from  whom  he  receives  it;  2  because  he  acquires  it 
out  of  the  ordinary  course  of  business,  and  after  it  has  been 
ili>houoml.  3  One  step  farther;  it  must  appear  that  the 
holder  of  such  paper  received  it  upon  what  the  law  regards 
as  a  valuable  consideration;  t  that  he  parted  with  some  thing 
or  valuable  security  for  it,  5  or  incurred  some  liability  on  the 
strength  thereof.  <j  Receiving  it  merely  as  collateral  security 
for  a  preexisting  debt,  is  not  a  parting  with  value,  in  the  com- 
nuTcial  sense  of  the  term;  7  for  here  the  holder  does  not  pay 
value  for  it,  nor  does  he  relinquish  any  security  or  valuable 
right  on  the  credit  of  the  bill,  nor  does  he  assume  any  new 
obligation  on  the  faith  of  it.  s  But  when  the  note  or  bill  is 
taken  in  satisfaction  of  the  precedent  debt,  and  the  debt  is 

1 10  John.  R.,  231 ;  15  id.  270;  5  Wend.,  566;  6  id.  615;  9  id.  172 

1  De  Mott  v.  Starkey,  3  Barb.  Ch.  R.,  403;  Reed  v.  Warner,  5  Paige,  650; 
Johnson  v.  Bloodgood,  1  John.  Cas.,  51;  8  John.  R.,  454;  24  Wend.,  97. 

1  Charles  v.  Marsden,  1  Taunt.,  221,  seems  to  hold  that  an  accommodation 

acceptor,  who  accepts  for  the  benefit  of  the  drawer,  is  liable  to  the  holder  who 

-  the  paper  after  it  is  due;  but  that  action  is  supposed  to  have  been  decided 

upon  the  particular  circumstances  of  the  case.     Chitty  on  Bills,  217,  219,  and 

note;  7  John.  R  ,363. 

4  Wardell  v.  Ilowell,  9  Wend.,  170. 

*  Bank  of  Salina  v.  Babcock,  21  Wend.  R.,  499;  24  Wend.,  115. 

'  Williams  v.  Smith,  2  Hill  R.,  301.  The  note  in  this  case  was  delivered  to 
the  holil'T  in  consideration  of  indorsements  to  be  made  by  him;  and  held  that 
he  was  a  holder  for  value  to  the  extent  of  his  indorsements  made  on  the  faith 
thereof. 

1  Coddlngton  v.  Bay.  20  John.  R.,  637;  aff  g  p.  r,  5  John.  Ch.,  54;  Jones 
T.  Swan.  6  Wend.,  685;  Hart  v.  Palmer,  12  Wend.,  523;  Manhattan  Co.  r. 
Reynolds,  2  Hill.  140;  Stalker  v.  McDonald,  6  Hill,  93;  9  Wend.,  170;  Furniss 
v.  Gilchrist,  1  Sand.  R.,  63.  A  slightly  different  rule  is  held  by  the  United 
States  Supreme  Court,  Swift  v.  Tyson,  16  Peters,  1. 

*  Stalker  v.  M'Donald,  8  Hilt,  93.    In  this  case  the  authorities  of  this  state 
and  those  of  England  are  reviewed  at  length,  confirming  the  doctrine  stated  in 
the  text.    See  also  Holmes  v.  Smyth,  4  Shepl.  R.,  177,  and  Norton  v.  Waite, 
2  Appl.  R..  175;  Petrie  v.  Clark,  11  Serg.  and  Rawle,  377. 


322  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

discharged,  this  is  a  purchase  of  the  paper,  and  just  as  much 
a  parting  with  value  as  if  the  purchaser  had  given  in  exchange 
for  it  the  note  of  a  third  person,  i  Receiving  and  discounting 
an  accommodation  note,  and  cancelling  others  which  are  good, 
is  a  parting  with  value  in  the  strictest  sense  of  the  term.  2 
Discounting  the  note  and  discharging  the  prior  debt  with  the 
proceeds,  is  the  same  thing  in  legal  effect  as  the  payment  of 
money  on  it;  and  the  circumstance  that  the  same  money  is 
used  in  the  payment  of  another  debt  does  not  affect  the  trans- 
action. 3  The  true  question  in  all  such  cases  is,  did  the 
holder  part  with  value  for  the  bill  or  not  ?  If  not,  then  he  is 
not  to  be  treated  as  a  bona  fide  holder  for  value.  If  he 
receive  it  in  full  payment  of  an  antecedent  debt,  and  discharge 
the  demand,  he  parts  with  something  of  value;  but  if  there 
is  no  agreement  that  it  is  taken  in  extinguishment  of  the 
indebtedness,  so  that  in  fact  the  debt  is  not  legally  discharged, 
he  has  parted  with  nothing  and  is  not  a  holder  for  value.  4 

An  exchange  of  notes  for  the  same  amount,  made  by  two 
firms  of  the  same  tenor,  is  in  legal  effect  a  sale,  the  underta- 
king of  each  party  being  the  consideration  for  the  underta- 
king of  the  other.  It  is  the  same  thing  as  though  the  value 
had  been  received  in  goods  or  money.  5  And,  therefore,  when 
a  person  gives  his  own  note  in  exchange  for  another  note,  he 
is  a  purchaser  for  value.  6  So,  where  the  payee  of  a  note, 
made  for  his  accommodation,  used  it  in  paying  and  taking  up 
his  own  note  for  a  larger  amount,  paying  the  difference  be- 
tween them  in  money,  it  was  held  that  the  party  receiving  it 
acquired  a  good  title  thereto.  7  And  so,  where  notes  are 
delivered  as  collateral  security  on  a  sale  of  property,  and  the 
sale  is  made  and  perfected  on  condition  of  such  delivery,  the 

1  Bank  of  St.  Albans  v.  Gilliland,  23  Wend.,  311;  1  Denio,  583. 
»  Bank  of  Salina  v.  Babcock,  21  Wend.,  499. 

*  Bank  of  Sandusky  v.  Scoville.  24  Wend.,  115. 

*  Spear  v.  Myers,  6  Barb.  R.,  445;  TVhite  v.   Springfield  Bank,  1  id.  225; 
Stewart  v.  Small,  2  id.  559;  Youngs  v.  Lee.  18  Barb.  R.,  187. 

*  Wooster  v.  Jenkins.  3  Denio.  187,  and  cases  there  cited. 

*  Mickles  v.  Colvin,  4  Barb.  R.,  304;  Mohawk  Bank  v.  Corey,  1  Hill  R.,  513. 
The  agreement  controls  the  righto  of  the  parties,  4  Dner  R.,  331. 

'  Montross  v.  Clark,  2  Sand.  R.,  115. 


CDSSIDCB-ATlOJf.  323 

render  receives  the  notes  for  value;  he  has  the  right  to  insist 
upon  security  for  his  payment  as  one  of  the  terms  on  which 
he  parts  with  his  property,  and  where  he  does  so,  receiving  the 
notes  as  such  security,  he  becomes  the  holder  of  them  for  a 
valuable  consideration,  i 

It  deserves  to  be  remembered  here,  that  a  note  made  for 
the  accommodation  of  the  payee  has  no  legal  inception  until 
it  is  transfered  for  value.  As  to  him.  the  maker  is  bat  a 
surety,  and  if  the  note  is  transfered  on  usurious  terms,  it  is 
void  in  the  hands  of  the  person  who  thus  receives  it.  2  He 
cannot  sell  it  at  an  under  value,  unless  at  the  time  of  the 
transfer  he  has  such  a  right  to  it  as  to  entitle  him,  if  it  woe 
then  due,  to  maintain  an  action  upon  it  against  the  maker.  3 

Where  a  note  is  indorsed  for  the  accommodation  of  die 
maker,  or  a  bill  is  accepted  for  the  accommodation  of  the 
drawer,  without  restriction,  and  negotiated  to  a  third  person, 
the  party  receiving  it  is,  as  we  have  said,  entitled  to  recover 
on  it,  whether  he  took  the  same  with  or  without  notice.  4 
There  being  no  fraud  in  the  case,  say  the  court,  the  indorsee, 
who  has  given  value  for  the  bill,  shall  recover  against  the 
acceptor,  notwithstanding  the  bill  was  accepted  without  con- 
sideration, and  for  the  accommodation  of  the  drawer.  5  On 
the  contrary,  where  the  indorsee  of  an  accommodation  bill 
takes  it  with  knowledge  of  its  character  as  such,  and  pays 
only  a  part  of  the  amount  due  on  it,  he  can  recover  no  more 
than  he  has  actually  paid  on  the  bill.  6  In  such  a  case  no 

1  Fenbr  T.  Pritebard.  2  Sand.  R.,  151. 

*  Dove  T.  Scbutt,  2  Denio.  6il ;  Catlia  T.  Gvater,  1  Kenaa  R.,  MB. 

'  Mono  T.  The  fiiamiMina  Co.,  15  Joha.  R.,  «;  Powell  T.  Water*,  8  CWea 

whether  the  hoUer  at  the  toaie  of  the  aentiatioa  of  the  aote  or  bin  had  each 
a  right  to  it  at  to  entitle  MB  if  it  were  the*  toe,  to  •••»••  a*  acuoa  agaia* 
the  drawers  and  iodonen.  If  he  coald  auiataia  the  aetioa  he  atay  seO  the 

at  lew  tbaa  hs  face ;  if  be  orald  act.  sach  a  aale  wo«ld  be  acarioaft. 
Browa  T.  Mott,  7  Joha,  R.,*61;  Graat  T.  Effieott,?  Wead.,  227. 
in  this  case  waa  brought  by  the  payee  of  a  bill,  who  took  the  ] 
aad  luU  ao  defcawe  that  he  kaev  the  caaw  to  be  aa 


Sauth  T.  Kaox,  S  E«p  R  ,  46;  Cbariet  T.  Haradea,  1 

i  T.  R^ert»,  1  Eap.  R^  Jfl;  J«BM  T.  fflhhert,  2  Statk, ! 


324  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

principle  of  equity  is  violated  by  restricting  the  recovery  to 
the  amount  paid  by  the  holder ;  nor  does  the  rule  tend  to 
hinder  or  obstruct  the  legitimate  use  of  such  paper.  A  differ- 
ent rule  prevails,  with  good  reason,  where  the  bill  is  given  for 
money  really  due  from  the  drawee  to  the  drawer,  or  is  drawn 
in  the  regular  course  of  business;  here  the  indorsee,  though 
he  has  not  given  the  indorser  the  full  amount  of  the  bill,  may 
still  recover  the  whole,  and  hold  the  overplus  above  the  sum 
actually  paid  to  the  use  of  the  indorser;  i  or  the  bill  may  be 
sold  in  the  market  for  what  it  will  bring,  and  the  purchaser 
may  collect  it.  2 

From  whatever  cause  arising,  the  want  of  a  consideration 
will  defeat  a  recovery  on  a  note,  bill  or  check,  as  between  the 
original  parties.  3  Thus,  a  note  cannot  be  supported  as  a  gift; 
for  a  gift  is  not  consummate  and  perfect,  until  a  delivery  of 
the  thing  promised;  and  until  then,  the  party  may  revoke  his 
promise.  A  parol  promise  to  pay  money,  as  a  gift,  is  no  more 
a  ground  of  action,  than  a  promise  to  deliver  a  chattel,  as  a 
gift :  it  is  the  delivery  which  makes  the  gift  valid.  4  So, 
where  a  father  gave  one  of  his  sons  a  note  for  a  thousand 
dollars,  observing  at  the  time  that  he  had  met  with  losses  and 
was  not  as  wealthy  as  his  brother,  it  was  held  that  an  action 
could  not  be  maintained  on  it  against  the  executor  of  his 
father.  By  the  court,  Spencer  Ch.  J. :  "  The  consideration  of 
blood,  or  natural  love  and  affection,  is  sufficient  in  a  deed, 
against  all  persons  but  creditors  and  bona  fide  purchasers; 
and  yet  there  is  no  case  where  a  personal  action  has  been 
founded  on  an  executory  contract,  where  a  consideration  was 
necessary,  in  which  the  consideration  of  blood,  or  natural  love 
and  affection  has  been  held  sufficient.  In  such  a  case,  the 
consideration  must  be  a  valuable  one,  for  the  benefit  of  the 

1  Per  Lord  Kenyon,  1  Esp.  R.,  261. 

8  Munn  v  Commission  Co.,  15  John.  R.,  44.  The  purchaser  of  a  note  for 
less  than  its  face,  can  only  recover  the  amount  paid  by  him  as  against  his 
immediate  indorser.  Ingalls  v.  Lee,  9  Barb.,  647. 

3  The  Pecple  v.  Howell,  4  John.  R.,  296;  Copp  v.  Sawyer,  6  N.  Hamp.,  386. 

4 Pearson  v.  Pearson,  7  John.  R.,  25;  Holliday  v.  Atkinson,  5  B.  and  C., 
601 ;  8  Dowl.  and  Ryl.,  163;  see  Brown  v.  Brown,  23  Barb.,  666. 


CONSIDERATION.  325 

promisor,  or  to  the  trouble,  loss,  or  prejudice  of  the  prom- 
isee. The  note  here  manifested  the  mere  intention  to  give 
the  one  thousand  dollars.  It  was  executory,  and  the  promi- 
sor had  a  locus  poenitentiae.  It  was  an  engagement  to  give, 
and  not  a  gift."  i 

It  is  true,  a  perfect  gift  is  not  revocable;  and  for  this 
reason  the  note  of  a  third  person,  or  any  other  instrument 
transferable  by  indorsement  or  delivery,  may  be  transfered  as 
a  valid  gift.  As  between  the  donor  and  donee  the  delivery 
consummates  the  gift  just  as  effectually  as  if  the  donation 
consisted  of  a  chattel.  2  But  a  bill  indorsed  by  way  of  gift 
does  not  subject  the  indorser  to  an  action  at  the  suit  of  the 
indorsee.  3  As  to  the  other  parties  to  the  instrument,  the 
donee  may  recover;  and  where  it  has  been  transfered  to  a 
person  receiving  it  in  good  faith,  before  maturity,  and  for 
value,  the  holder  may  also  recover  on  it  against  the  donor.  4 

Between  the  immediate  parties,  it  may  be  shewn  by  way  of 
defence  that  a  bill  or  note  was  obtained  by  duress;  5  or  by 
fraud;  :  or  by  circumvention,  and  whilst  the  defendant  was  in 
a  state  of  intoxication;?  or  by  false  pretences;  3  or  that  being 
deposited  as  an  escrow,  it  was  delivered  contrary  to  agree- 

1  Fink  T.  Cox,  18  John.  R.,  145;  Rann  v.  Hughes,  7  Term  R.,  350.  "  It  is 
undoubtedly  true,  that  every  man  is  by  the  law  of  nature  bound  to  fulfill  his 
engagements.  It  is  equally  true,  that  the  law  of  this  country  supplies  no 
means,  nor  affords  any  remedy,  to  compel  the  performance  of  an  agreement 
made  without  sufficient  consideration;  such  agreement  is  nvdum  pactvn  ex 
quo  non  oritur  actio  ;  and  that  whatever  be  the  sense  of  this  maxim  in  the 
civil  law.  it  is  in  the  last  mentioned  sense  only  that  it  is  understood  in  the  com- 
mon law."  Schoonmaker  v.  Roosa,  17  John.  R.,  301.  All  contracts  are 
divided  into  agreements  by  tpecialty  and  parol;  there  is  no  third  class.  See 
Van  Derveer  v  Wright,  C  Barb.  R.,  647. 

1  Grangrac  v.  Arden,  10  John.  R.,  293;  14  M.  222. 

•  Easton  T.  Pratchett,  1  C.  M.  and  R.,  798;  S.  C.,  3  Dowl.,  472. 
4  Same,  and  Ileyden  v.  Thompson,  3  Xev.  and  Man.,  319. 

•  Chitty  on  Bills,  73;  Duncan  v.  Scott,  1  Campb..  100. 

•  Rees  T.  Marquis  Ileadford,  2  Campb.,  574;  Grew  T.  Bevan,  8  Stark,  134; 
6  Wend.,  615;  Noble  v.  Adams,  7  Taunt.,  59. 

1  Pitt  v.  Smith,  8  Campb.,  33,  454;  but  intoxication  is  no  defence  unless 
there  is  also  fraud,  Northan  v.  Latouche,  4  C.  and  P.,  240.  After  inquisition 
found,  he  is  wholly  incompetent  to  contract,  4  Selden,  888. 

•  Weinholt  v.  Spitten,  8  Campb.,  876. 


326  BILLS   OF    EXCHANGE  AND    PROMISSORY  NOTES. 

ment.  i  Thus,  a  promissory  note  given  on  the  sale  of  a 
chattel,  which,  the  seller  falsely  represented  as  of  great  value, 
when  it  was  in  fact  worth  nothing,  is  without  consideration 
and  void.  2  The  thing  sold  being  utterly  valueless,  the  maxim 
applies  that  fraud  vitiates  all  contracts  into  which  it  enters, 
and  renders  them  void.  3  But  if  the  thing  sold  be  of  some 
value,  the  purchaser  must  return  or  offer  to  return  it,  or  he 
cannot  treat  the  sale  as  absolutely  void.  For  instance ;  where 
a  bill  is  given  for  the  price  of  goods  fraudulently  sold  under 
a  warranty,  the  breach  of  the  warranty  is  a  bar  to  the  action 
on  the  bill,  as  between  the  parties  to  the  sale,  if  the  defendant 
immediately,  on  discovering  the  fraud,  repudiate  the  contract 
by  tendering  back  the  goods.  4  So,  where  a  promissory  note 
was  given  on  the  sale  of  a  horse,  which  the  vendors  decek- 
fully  represented  as  sound,  when  they  knew  the  fact  to  be 
otherwise,  it  was  held  that  inasmuch  as  the  horse  was  worth 
something,  the  purchaser  could  not  treat  the  contract  as  void, 
unless  on  discovering  the  fraud,  he  returned  or  offered  to 
return  the  chattel.  5  He  cannot  both  affirm  and  repudiate  the 
contract. 

Fraud  destroys  the  contract;  but  if  the  party  defrauded 
would  disaffirm  the  contract,  he  must  do  so  at  the  earliest 
practicable  moment  after  discovery  of  the  cheat,  and  he  must 
return  whatever  he  has  received  upon  it.  6  But  if  the  thing 
received  be  entirely  valueless,  and  a  different  thing  from  that 
contracted  for,  he  may  rescind  the  contract  without  returning 
or  offering  to  return  it.  7 

1  Vallet  v.  Parker,  6  Wend.  R.,  615. 
1  Sill  v.  Rood,  15  John.  R..  230. 
8  Comyn  on  Contr.,  37,  38. 
4  Saund.  on  PI.  and  Ev.  303. 

6  Burton  v.  Stewart,  3  Wend.  R.,  236;  Lewis  v.  Cosgrave.  2  Taunt.,  2;  Leg- 
gett  v.  Cooper,  2  Stark.  93;  Fisher  v.  Samuda,  1  Carapb.,  190;  Perly  v.  Balch 
23  Pick.,  283. 

•  Masson  v.  Bovet,  1  Denio  R.,  69. 

7  Colville  v.  Besly,  2  Denio  R.,  139.    The  defendants,  owning  a  note  made 
by  persons  who  had  been  discharged  as  bankrupts,  and  indorsed  by  another 
party,  agreed  and  exchanged  it  with  the  plaintiff  for  his  note;  but  settled  with 
and  discharged  the  indorser  before  delivering  it,  contrary  to  agreement;  and 
the  plaintiff  was  allowed  to  recover  for  money  had  and  received ,  without  shew- 
ing an  offer  to  return  the  worthless  note,  2  Sand.  R.,  421. 


CONSIDERATION.  327 

Where  the  statute  declares  the  contract  void,  as  where  notes 
are  given  as  collateral  security  for  an  usurious  debt,  the  con- 
tract may  be  repudiated;  but  the  party  depositing  them  can- 
not recover  them  back  without  shewing  that  a  return  of  them 
was  demanded  before  suit  brought,  i 

Want  of  consideration  destroys  the  validity  of  a  note,  with- 
out any  regard  to  the  bona  fides  of  the  transaction^  as,  where 
the  defendant  promised  as  administrator  to  pay  a  given  sum 
for  value  received  by  one  of  the  heirs  of  the  intestate;  or 
where  a  debtor  pays  part  of  his  debt  before  it  is  due,  and  a 
note  is  given  him  instead  of  a  receipt,  to  shew  that  he  is  to  be 
allowed  interest  on  the  sum  paid ;  3  or  where  a  note  is  given 
in  renewal  of  another,  which  was  not  founded  on  any  consid- 
eration; 4  or  where  a  note  is  given  to  a  widow  for  a  debt  due 
to  her  deceased  husband's  representatives^  or  where  a  note 
is  given  to  the  mother  of  a  child,  that  has  been  beaten,  to  stay 
a  prosecution  for  the  injury;  6  or  where  a  note  is  given  on  a 
mere  moral  or  honorary  obligation,  and  not  on  any  thing 
which  the  law  esteems  a  valuable  consideration.  But  a  moral 
obligation,  founded  on  a  pre-existing  debt,  that  is  not  paid, 
but  only  barred  by  statute,  is  a  good  consideration  for  a 
valid  promise  to  pay  it.  7 

*  Boughton  v.  Bruce,  20  Wend.,  234. 

*  17  John.  R.,  301 ;  Ten  Eyck  v.  Vanderpool,  8  id.  120;  9  Wend.,  273;  Crofts 
T.  Ik-ale,  6  Eng.  Law  and  Eq  ,  408.     Action  by  the  payee  against  the  maker 
of  a  promissory  note  for  400/y  the  defendant  pleaded  that  the  note  was  made 
by  him  at  the  request  of  the  plaintiff,  as  a  collateral  security  for  a  debt  due 
from  one  John  Bcal  to  the  plaintiff,  and  that  the  defendant  was  not  liable  to 
pay  the  debt,  or  to  give  the  note  as  security,  and  that  there  was  no  other  con- 
sideration.    Held  a  good  plea  of  want  of  consideration  after  verdict. 

Southall  v.  Kigg,  4  id  360.  A  plea  that  the  note  in  suit  was  given  without 
consideration,  and  "  that  it  was  obtained  from  the  defendant  upon  a  represen- 
tation by  the  plaintiff  that  a  sum  of  money  was  owing  from  the  defendant  to 
the  plaintiff  by  virtue  of  an  indenture,  whereas  no  such  sum  was  owing,"  is  a 
good  plea  of  no  consideration,  though  it  be  not  alleged  that  the  representation 
was  "  fraudulently  "  made. 

'Slade  v.  Halsted,  7  Cowen  R.,  822. 

4  Geiger  v.  Cook,  8  Watts  and  Serg..  266. 

*  Bryan  v.  Philpot ;  8  Iredell,  467. 

*  Heast  v.  Sybert,  Cbevcs,  177.    A  parent  has  no  action  for  an  assault  and 
battery  on  his  child. 

T  Dodge  v.  Adams,  19  Pick.,  429;  Cook  v.  Bradley,  7  Conn.,  67;  Stafibrd  T. 
Bacon.  1  Hill  R.,  532,  and  cases  there  cited. 


328  BILLS  OF    EXCHANGE    AND  PROMISSORY  NOTES. 

Failure  of  Consideration. — Though  the  consideration  of  the 
note  or  bill  be  good  in  the  first  instance,  still  if  it  wholly  fail 
no  recovery  can  be  had  upon  it  in  an  action  between  the  ori- 
ginal parties;  as  where  a  piece  of  land  is  conveyed  with  a 
warranty,  and  a  note  given  for  the  purchase  money,  and  the 
title  fails,  i  But  in  order  to  constitute  a  perfect  defence  or 
bar  to  a  recovery  in  such  an  action,  a  total  failure  of  the  con- 
sideration must  be  shown.  2  And  whether  the  failure  be  total 
or  only  partial  will  depend  upon  the  terms  of  the  conveyance 
and  warranty,  and  upon  the  question  whether  there  has  been 
an  absolute  failure  of  title.  3  Where  there  is  a  covenant  of 
warranty  merely,  which  is  not  broken  until  there  has  been  an 
eviction,  or  something  equivalent  to  an  eviction,  it  is  incum- 
bent upon  the  party  seeking  to  defeat  the  recovery  of  the 
purchase  money,  to  shew  an  eviction;  4  and  where  the  grantor 
covenants  that  he  is,  at  the  time  of  the  execution  of  the  con- 
veyance, seised  of  an  absolute  and  indefeasible  estate  of 
inheritance  in  fee  simple,  the  grantee  cannot  defeat  a  recovery 
of  the  purchase  money  by  alleging  in  general  terms  that  he 
was  not  so  seised;  he  must  go  further,  and  shew  an  absolute 
failure  of  title.  5  Otherwise  the  purchaser  will  be  left  to  his 
remedy  on  the  covenants  contained  in  his  deed.  If  he 
acquires  any  thing  by  the  conveyance,  and  there  was  no  fraud 
or  deceit  practised  upon  him,  so  that  he  has  no  right  to  repu- 
diate the  title  by  any  act  of  his  own,  he  can  only  insist  upon 
a  reduction  of  damages.  6 

Where  several  notes  are  made  and  delivered,  and  a  collateral 
contract  is  entered  into  between  the  maker  and  payee  speci- 

1  Frisbee  v.  Hoffuagle,  11  John.  R.,  50. 

8  Tallmadge  v.  Wallis,  25  Wend.  R.,  107,  and  cases  there  cited.  Cook  v. 
Mix,  11  Conn.,  432;  Jenness  v.  Parker,  11  Shepley,  284;  Rice  v.  Goddard,  14 
Pick.,  293. 

8  Whitney  v.  Lewis,  21  Wend.  R.,  131. 

4  Idem;  Burton  v.  Stewart,  3  Wend.,  236;  25  Wend.  R.,  117. 

6  25  Wend.  R.,  107;  Smith  v.  Sinclair,  15  Mass.,  171;  Lloyd  v.  Jewell,  1 
Maine,  252;  Harlan  v.  Reed,  3  Ham.,  285,  shewing  that  a  failure  of  title  as  to 
a  part  of  the  land  is  not  enough. 

•  11  Shepley,  284;  White  v.  Beard,  5  Porter,  94;  Freleigh  v.  Platt,  5  Cowen, 
494;  Bowles  v.  Kewby,  2  Blackf.,  364;  4  Wend.,  483. 


CONSIDERATION.  329 

lying  that  on  the  payment  of  the  notes  the  payee  is  to  convey 
to  the  maker  a  certain  tract  of  land,  with  a  condition  that 
unless  the  notes  are  paid  at  maturity  the  agreement  is  to 
become  void;  and  the  maker  fails  to  pay,  and  the  payee  of 
the  notes  transfers  the  lands  to  other  persons,  no  action  can 
be  maintained  on  the  notes.  1  But  nothing  less  than  a  total 
failure  of  the  consideration  can  be  shewn  in  bar  of  a  recovery 
on  a  note  or  bill.  2 

Where  a  note  is  given  on  a  sale  of  goods  for  the  purdiase 
money,  the  rule  is  that  if  the  chattel  be  of  no  value  to  any 
one,  it  cannot  be  the  basis  of  a  bargain ;  but  if  it  be  of  any 
valu<-  to  either  party,  it  may  be  a  good  consideration  for  a 
promise.  If  it  be  beneficial  to  the  purchaser,  he  certainly 
ought  to  pay  for  it;  if  it  be  a  loss  to  the  seller  he  is  certainly 
entitled  to  remuneration  for  his  loss.  3  Where  there  is  neither 
warranty  nor  fraud  in  the  sale,  and  the  purchaser  gives  his  note 
for  the  price,  he  is  liable  thereon,  though  the  article  sold 
turns  out  to  be  an  entirely  different  thing  from  that  for  which 
it  was  purchased,  and  nearly  worthless;  as  where  an  article 
was  sold  as  barilla,  and  it  proved  to  be  a  spurious  preparation 
of  no  use  to  the  purchaser.  4  On  the  trial  of  the  case  refered 
to,  judge  Duer  charged  the  jury,  according  to  the  rule  of  the 
civil  law, "  that  if  they  believed  the  article  sold  by  the  plain- 
tiff to  the  defendant  to  be  a  fraudulent  article,  although  they 
should  find  that  there  was  no  fraud  in  the  vendor,  yet  the 

1  Winter  v.  Livingston,  13  John.  R.,  64. 

1  Man  v.  Lent,  10  Barn,  and  Cress.,  877.  The  bill  was  given  by  the  father 
as  a  premium  to  the  master  to  whom  he  bound  his  son  as  an  apprentice;  and 
the  indentures  being  improperly  stamped,  the  apprentice,  after  serving  five 
months,  led  his  master;  held  that  there  was  not  here  a  total  failure  of  the 
consideration,  since  a  part  of  the  time  had  elapsed,  and  there  was  a  way  of 
procuring  the  indenture  to  be  properly  stamped.  See  Niekerson  v.  Howard,  19 
John.  R.,  113;  Ehle  v.  Judson,  24  Wend.,  97. 

1  Perly  v.  Balch,  23  Pick.,  283.  The  note  in  this  case  was  given  for  an  ox 
(bat  was  diseased,  but  was  not  returned  by  the  purchaser;  held  that  though 
warranted  sound,  the  breach  of  warranty  was  not  available  as  a  bar  to  a  re- 
covery, the  chattel  not  being  shewn  to  be  entirely  worthless. 

4  Welsh  v.  Carter,  1  Wend.  R..  1S6.  The  purchaser  in  this  case  had  the 
Article  examined  by  a  chemist  before  the  purchase,  but  there  was  a  mistake  in 
ilk  examination. 

19 


330 

policy  of  the  law  cast  the  loss  upon  him  as  the  importer  of 
the  article."  But  the  court,  on  review,  held  the  doctrine  of 
the  common  law  to  be,  that  in  order  to  maintain  an  action  for 
selling  one  article  for  another,  there  must  be  either  warranty 
or  fraud  shewn  j.  and  that  if  the  purchaser  wishes  to  protect 
himself  against  any  latent  defect  or  deception  in  the  thing 
purchased,  he  can  do  so  only  by  exacting  a  warranty  from  the 
vendor.  Failing  to  take  this  precaution,  he  is  to  be  considered 
as  trusting  to  his  own  sagacity  and  judgment,  under  the  well 
settled  rule  of  caveat  emptor.  1 

By  the  civil  law,  if  there  was  error,  either  as  to  the  sub- 
stance of  the  thing  which  was  intended  to  be  sold  or  purchased, 
or  as  to  any  of  its  essential  qualities,  without  which  it  would 
not  be  the  article  for  which  it  was  sold;  as  if  a  metal  was  sold 
for  silver  bullion,  which  afterwards  turned  out  to  be  gold  or 
brass;  or  if  candlesticks  were  sold  as  silver  and  they  after- 
wards turned  out  to  be  only  plated,  there  would  be  no  valid 
sale.  But  by  the  common  law,  the  sale  would  be  binding  in 
such  a  case,  unless  the  article  sold  was  in  such  a  situation  that 
it  could  not  be  seen  and  examined  by  the  parties.  2  If  the 
vendor  knows  that  the  article  sold  by  him  is  a  different  thing 
from  that  for  which  he  sells  it,  or  uses  any  disguise  or  art  to 
deceive  th&  purchaser,  or  represents  it  to  be  different  from 
what  it  in  fact  is,  his  fraudulent  conduct  vitiates  the  contract.  3 

Notwithstanding  it  is  laid  down  in  general  terms,  that  a 
total  failure  of  consideration  is  a  good  defence  to  an  action  on 
a  promissory  note,  it  rarely  happens  that  a  note  given  for 
purchase  money  on  a  fair  sale  of  chattels,  without  warranty, 
is  void  for  want  of  a  consideration.  Such  a  case  may  occur, 
where  the  contract  is  executory.  "  Thus,  if  A  sells  his  horse 
to  B,  and  it  turns  out  that  the  horse  was  dead  at  the  time, 
though  the  fact  was  unknown  to  the  parties,  the  contract  is 
necessarily  void."  4  The  same  thing  may  happen  in  the  case 

1  Seixas  v.  Wood,  2  Caines,  48;  Jewett  v.  Colgate  and  al.,  20  John.  R.,  196;. 
"Welsh  v.  Carter,  1  Wend.  R.,  185. 

a  Per  Chancellor  Walworth,  in  Waring  v.  Mason,  18  Wend.,  432. 

8  2  Black.  Com.,  450;  2  Caines,  48;  12.  John.  R,,  468;  Hora  v,  Nichols,  1 
Salk.,  289. 

«2.Kent.  Com.,  468,. 


CONSIDERATION.  331 

of  an  executed  contact;  as  where  a  sale  is  completed  by  a 
delivery  of  the  thing  sold,  and  a  note  is  given  for  the  price, 
ami  the  title  to  the  chattel  fails;  the  consideration  of  the  note 
fails  with  it.  i  But  where  the  title  is  perfect,  and  the  thing 
sold  is  delivered,  and  there  is  neither  warranty  nor  fraud  in 
the  sale,  it  is  no  bar  to  an  action  on  a  note  given  for  the  price 
that  the  article  sold  proved  to  be  of  no  value  to  the  pur- 
chaser. 2  The  cases  proceed  upon  the  principle,  that  the 
article,  being  vendible,  is  not  valueless  to  the  vendor;  and 
that  mere  inadequacy  of  consideration  is  no  defence.  3 

Though  the  thing  sold  possess  only  a  speculative  value,  as 
in  the  case  of  the  mulberry  trees  sold  for  planting  in  slips 
and  cuttings,  but  really  so  dead  and  sickly  that  they  would 
not  grow;  or  as  in  the  case  of  the  lottery  ticket  that  was 
supposed  to  have  drawn  a  prize  but  had  come  out  a  blank; 
still  if  there  be  no  deception  practiced,  and  the  purchaser 
not  exact  a  warranty,  but  gives  his  note  for  the  price, 
there  is  not  what  the  law  regards  as  a  failure  of  considera- 
tion. 4  Mr.  Anthon  in  the  argument  of  the  barilla  case, 
mentions  an  action  that  was  brought  and  tried  in  the  Mayor's 
court  of  the  city  of  New-York,  when  Clinton  presided,  in 
which  a  contract  was  sought  to  be  enforced  on  the  sale  of  a 
quantity  of  indigo.  The  article  sold  was  proved  on  the  trial 
to  be  clay  painted  the  color  of  indigo,  and  the  action  was 
adjudged  not  to  lie.  5  A  case  closely  resembling  this  lately 
came  up  in  the  state  of  Massachusetts :  The  defendant,  who 
was  an  auctioneer,  advertised  among  other  things  for  sale  at 

1  Medina  v.  Stonghton,  1  Ld.  Raym.,  523. 

•  Jobnaon  v.  Titus,  2  Hill  R  ,  606;  Welsh  v.  Carter,  1  Wend.  R.,  185;  Bar- 
nurn  v.  Bar  mini,  8  Conn.  R.,  469.    There  waa  a  rumor  that  a  lottery  ticket 
bad  drawn  $2,000.  on  which  the  defendant  purchased  one  fourth  of  it,  and 
gave  his  note  to  the  plaintiff  for  $200,  whereas  the  ticket  had  at  the  time  come 
out  a  blank.    Per  Daggett,  J.  :  "This,  for  aught  that  appears,  was  a  fair 
speculation.    Neither  of  the  parties,  as  the  facts  shew,  knew  the  fate  of  the 
ticket.    It  was  therefore  a  bargain  of  hazzard.     In  the  absence  of  all  fraud, 
it  is  not  easy  to  see  why  the  plaintiff  should  not  recover  upon  the  principles  of 
law." 

1  21  Wend.,  594. 

4  -  Hill,  006;  8  Conn.  R.,  469. 

•  1  Wend.  B.,  187. 


332  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

auction,  "  two  cases  of  Manilla  indigo,  oT  superior  quality;" 
before  the  sale  the  cases  were  opened,  and  a  full  opportunity 
given  for  their  examination  and  inspection;  the  plaintiff 
examined  the  article,  and  being  the  highest  bidder  therefor, 
became  the  purchaser,  and  the  article  was  immediately  deliv- 
ered to  him  with  a  bill  describing  it  as  "  two  cases  of  indigo;" 
was  then  paid  for  and  taken  away.  In  truth  the  article  sold 
was  not  indigo,  but  a  composition  of  a  worthless  character,  so 
prepared  as  to  deceive  skilful  dealers;  i  but  it  was  not  inten- 
tionally misrepresented  by  the  vendor.  And  in  an  action  on 
the  alleged  warranty,  the  court  instructed  the  jury,  "  that 
the  bill  of  parcels  delivered  by  the  defendant  to  the  plaintiff 
contained  a  warranty  that  the  article  sold  and  delivered  to 
him  was  indigo;  and  that  if  the  jury  were  satisfied  that  it  was 
not  indigo,  nor  known  to  merchants,  nor  in  the  market  as 
indigo;  and  that  it  was  worthless;  and  that,  the  plaintiff 
within  a  reasonable  time  after  the  sale,  returned  the  article  to 
the  defendant,  and  demanded  the  price  paid  therefor;  and  if 
the  article  was  so  prepared,  and  presented  such  an  appearance 
as  would  deceive  skilful  dealers  in  indigo;  the  plaintiff  was 
entitled  to  a  verdict  for  the  sum  paid  by  him."  The  jury 
found  a  verdict  for  the  plaintiff,  and  on  review  the  charge 
was  held  correct.  2  Had  a  note  been  given  for  the  purchase 
money,  it  would  have  been  void  for  want,  or  for  a  total  failure 
of  the  consideration.  3 

When  a  party  to  a  contract  has  a  right  to  recover  back 

1  The  substance  was  composed  as  follows  :  ''  Of  Prussian  blue,  seventy-six 
parts;  of  the  chromate  of  iron  twenty  parts,  and  of  potash  four  parts,"  and 
the  same  was  worthless  for  any  purpose,  and  was  not  known  in  the  market  by 
the  name  of  indigo,  although  an  article  similar  in  appearance  and  equally 
worthless,  which  had  been  imported  from  Manilla,  had  once  before  been  sold 
in  Boston,  by  auction,  as  and  for  Manilla  indigo. 

9  Henshaw  v.  Bobbins,  9  Met.,  83.  The  court  held  first,  that  a  bill  of  parcels 
given  on  a  sale  of  goods,  is  a  warranty  that  they  are  what  they  are  described 
to  be;  and  second,  that  the  rule  caveat  emptor,  does  not  apply  where  the  de- 
ception cannot  be  detected  on  inspection,  and  the  article  is  described  to  be 
what  it  is  not. 

8  In  Welsh  v.  Carter,  the  same  deception  was  practiced,  but  the  purchaser 
had  the  article  examined  by  a  chemist  before  the  purchase,  and  there  was  no 
misrepresentation,  nor  any  warranty,  express  or  implied,  in  the  case. 


CONSIDERATION.  333 

money  paid  thereon,  on  the  ground  that  the  consideration  has 
wholly  failed;  or  where  he  has  the  right  to  rescind  the 
contract  for  any  reason,  or  to  refuse  payment  thereon  because 
a  condition  precedent  has  not  been  performed  by  the  other 
party,  he  might  have  resisted  the  payment  just  the  same,  no 
doubt,  had  he  given  his  undertaking  in  the  form  of  promissory 
notes,  i  The  circumstance  that  the  action  is  upon  the  note, 
does  not  affect  the  question;  because  the  plaintiff  is  in  legal 
effect  seeking  to  enforce  the  original  contract,  and  the  question 
must  be  settled  in  the  same  manner  as  though  the  action  was, 
in  form  upon  that  contract.  2 

A  partial  failure  of  consideration  is  not  a  defence  to  an 
action  on  a  promissory  note  or  bill  of  exchange;  but  when 
properly  pleaded  it  may  be  shewn  in  reduction  or  recoupment 
of  damages.  3  Thus,  fraud  in  the  sale  of  a  chattel  may  be 
given  in  evidence  in  mitigation  of  the  damages,  on  a  note 
given  for  the  price;  4  and  that  too,  though  the  defendant 
might  have  rescinded  the  contract  and  returned  the  property, 
if  he  had  chosen  to  do  so.  5  But  in  order  to  entitle  the  defen- 
dant to  a  deduction  from  the  price  stipulated  to  be  paid,  on 
account  of  fraud,  he  must  undoubtedly  establish  a  cause  of 
action  against  the  plaintiff  arising  out  of  his  false  representa- 
tions or  fraudulent  concealment  on  the  sale.  6  His  claim  in 
mitigation  of  damages  is  in  the  nature  of  a  cross  action,  and 
it  is  permitted  to  be  proved  so  as  to  prevent  the  expense  and 
necessity  of  two  suits  instead  of  one. 

The  same  rule  admits  the  defendant,  prosecuted  on  a  prom- 
issory note,  to  prove,  in  reduction  of  damages,  the  breach  of 

1  Chitty  on  Contr.,  622,  741. 

1  Batterman  v.  Pierce,  8  Hill  R.,  171. 

•  Spalding  v.  Vandercook,  2  Wend.,  431 ;  4  Wend.,  483;  8  id.  109;  8  Wend., 
286;  22  Pick.,  610;  28  id.  288;  8  Hill,  171. 

4  Beccker  r.  Vrooman,  13  John.  R.,  802;  Basten  T.  .Buten,  7  East,  480;  2 
Taunt 

•  Burton  T.  Stewart,  8  Wend.  R.,  288;  The  People  ex  rel.  be.  T.  Niagara C. 
P.,  1-  Wend.,  246.    But  such  a  defence  is  not  admissible  under  the  plea  of 
the  general  issue. 

•  Fleming  T.  Slocum,  18  John.  R.,408;  Thornton  T.  Wynne,  12  Wheat., 
183. 


334  BILLS  OF  EXCHANGE  AND   PROMISSORY  NOTES. 

a  warranty  made  on  the  sale  of  the  goods  for  which  the  note 
was  given.  1  Such  a  defence  is  admitted  to  avoid  circuity  of 
action,  and  is  favored  because  it  furnishes  a  fair  opportunity 
to  do  at  once  final  and  complete  justice  between  the  parties.  2 
Where  the  contract  of  sale  includes  an  undertaking  on  the 
part  of  the  vendor  warranting  the  article  sold,  and  there  has 
been  a  breach  of  the  warranty,  nothing  can  be  more  just 
than  to  allow  the  damages  for  the  breach  in  diminution  of  the 
purchase  money  stipulated  to  be  paid.  3  It  was  formerly 
supposed  that  there  could  only  be  a  recoupment  where  some 
fraud  was  imputable  to  the  plaintiff  in  relation  to  the  contract 
on  which  the  action  was  founded;  but  it  is  now  settled  that 
the  doctrine  is  also  applicable  where  the  defendant  imputes 
no  fraud,  and  only  complains  that  there  has  been  a  breach  of 
the  contract  on  the  part  of  the  plaintiff.  4 

In  establishing  the  claim  to  a  mitigation  of  damages  for  the 
breach  of  warranty,  it  is  evident  that  the  defendant  must 
plead  and  shew  a  cause  of  action  against  the  plaintiff",  and 
prove  his  case  in  the  same  manner  as  if  he  had  elected  to 
bring  a  separate  action.  5  In  England  a  distinction  is  taken 
between  a  suit  upon  the  original  contract  of  sale,  and  a  suit 
upon  a  note  or  other  security  taken  for  the  contract  price  on 
such  sale;  and  in  the  latter  case  the  whole  amount  of  the 
note  or  other  security  is  allowed  to  be  recovered,  where  there 
is  no  fraud  and  only  a  partial  failure  of  the  consideration, 
the  quantum  to  be  deducted  being  unliquidated  and  not  capa- 
ble of  definite  computation.  6  But  that  distinction  has  not 

1  Spalding  v.  Vandercook,  2  Wend.,  431. 

8  M'Allister  v.  Reab,  4  Wend.,  483;  8  Wend..  109,  and  the  authorities  cited 
in  that  case. 

•  8  Wend.,  109. 

4  3  Hill,  174;  23  Pick.  R.,  283;  Poulton  v.  Lattimore,  9  Barn  and  Ores., 
259;  Barton  v.  Butler,  7  East,  480;  Fielder  v.  Starkin,  1  H.  BI.,  17.  In 
Connecticut,  a  reduction  is  allowed,  on  account  of  fraud  in  the  sale,  only  when 
the  partial  failure  is  certain  in  amount,  and  there  has  been  an  attempt  to  repu- 
diate the  contract,  12  Conn.,  234. 

•  2  Wend.,  431;  3  id.  238;  8  id.  109;  King  v.  Paddock,  18  John.  R.,  141. 

8  Day  and  others  v.  Nix,  9  J.  B.  Moore,  159;  Morgan  v.  Richardson,  1 
Campb.,  40  n;  Tye  v.  Gwynne,  2  Campb.,  346;  17  Com.  Law  R.,  121;  Mann 
v.  Lent,  10  Barn,  and  Cres.,  877;  2  Com.  Law.  R.,  291.  The  same  rule  was 
adopted  in  Thornton  v.  Wynne,  12  Wheat.,  183. 


CONSIDERATION.  335 

been  adopted  in  this  state,  nor  is  it  founded  in  principle. 
True,  the  contract  may  be  rescinded  where  there  is  a  fraud, 
but  the  right  to  recoupe  damages  does  not  depend  upon  the 
rescinding  of  the  contract;  i  nor  is  it  in  such  cases  confined  to 
damages  that  are  liquidated  or  capable  of  a  definite  com- 
putation. 2 

Where  a  note  or  bill  is  given  upon  a  condition  or  promise 
that  the  payee  will  do  a  certain  act,  and  he  neglects  or  fails 
to  keep  his  promise;  as  where  a  bill  was  given  for  the  debt  of 
another  on  condition  that  a  receipt  in  full  should  be  given 
therefor;  or  where  a  note  was  made  and  delivered  to  the 
owner  of  a  slave  for  his  manumission,  and  the  receipt  was  not 
given  nor  the  slave  manumitted,  it  was  held  that  there  was  a 
total  failure  of  the  consideration.  3  But  where  a  note  given 
on  a  settlement  of  account,  is  by  mistake  drawn  for  a  greater 
sum  than  was  due,  there  is  only  a  partial  want  or  failure  of 
consideration.  4  So,  where  a  note  was  given  for  a  machine 
and  for  the  exclusive  right  to  use  it  within  a  certain  district, 
and  the  letters  patent  were  void,  it  was  adjudged  that  this 
constituted  a  partial  failure  of  the  consideration.  5 

There  is  a  plain  distinction  between  mere  inadequacy  and 
a  total  or  partial  failure  of  consideration.  6  Inadequacy  of 
consideration  is  not  in  itself  any  defence  to  an  action  on  a  bill 
or  note.  7  But  a  total  failure  or  want  of  consideration  is  a 
perfect  defence,  and  a  partial  failure  is  a  good  defence  pro 
tanto.  The  Engli>h  rule  is  different  and  does  not  allow  a 
partial  failure  of  consideration  to  be  shewn  in  an  action  on  a 
note  or  other  security,  where  the  sum  to  be  deducted  on  that 

1  4  Wend.,  490;  Harrington  v.  Strattoa,  22  Pick.,  510;  23  id.  283;  8  Cowen, 
81;  11  Conn.  R.,  432;  4  Bl»ckf.,  656. 

•  2  Wend.,  481 ;  3  id.  236.    For  examples  shewing  a  failure  of  consideration, 
see  Edwards  on  Bailments,  335-338. 

1  Wdn'iolt  v.  Sj.itter.  »  Campb.,  876;  Petrey  v.  Christy,  19  John.  R.,  58. 
4  Mercer  v  Clark,  8  Bibb,  lljl;  Phitteplace  v.  Sture,  li  John.  R..  » 1J. 

•  Earl  v.  Page,  6  N.  Hamp.,  477.    But  a  note  given  for  a  patent  right  that 
was  valid,  but  turned  out  of  no  value  to  the  purchaser,  was  held  good  in  Wil- 
liams v.  Hicks.  2  Verm.,  86. 

•  -1  Hill  R.,606. 

'  Solomons  v.  Turner,  1  Stark.  R.,  51 ;  21  Wend.,  693. 


336  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

account  is  unliquidated  and  is  not  in  the  nature  of  a  certain 
debt  or  deduction;  and  the  same  rule  has  been  occasionally 
applied  in  this  country,  i 

Illegality  of  consideration.  It  is  a  fundamental  principler 
that  all  contracts  which  have  for  their  object  any  thing  repug- 
nant to  the  general  policy  of  the  law,  or  contrary  to  the  pro- 
visions of  a  statute,  are  void;  2  and  when  a  note  or  bill  is 
founded  upon  or  given  to  secure  the  performance  of  such  a 
contract,  neither  of  the  parties  to  the  transaction  can  enforce 
it  against  the  other.  3  Though  such  a  defence  comes  with  a 
very  ill  grace  from  a  party  to  the  instrument,  courts  of  justice 
will  not  lend  their  aid  to  carry  into  effect  an  agreement  made 
in  violation  of 'law,  or  in  contravention  of  the  policy  and  spirit 
of  a  statute;  4  nor  will  they,  when  such  a  contract  has  been 
executed,  aid  either  party  in  setting  it  aside.  5  Thus,  when 
money  has  been  actually  paid  by  one  of  two  parties,  upon  an 
illegal  contract,  both  being  particeps  criminis,  no  action  can 
be  maintained  to  recover  it  back;  6  and  when  a  conveyance 
has  been  executed  for  an  illegal  consideration,  the  law  will 
not  aid  the  grantor  to  recover  either  the  premises,  or  the  value 
of  them  where  they  have  been  resold.  7 

A  partial  failure  or  want  of  consideration  does  not  render  a 
promissory  note  void;  but  where  a  portion  of  the  considera- 
tion of  a  note  or  other  security  is  illegal,  the  whale  is  void, 
as  between  the  immediate  parties  to  the  instrument.  8 

1  Wells  v.  Hopkins,  5  M.  and  W.,  7;  "Washburn  v.  Picott,  53  Dev.,  380; 
Jordan  v.  Jordan,  Dudley,  (Geo.,)  181,  245;  Scudder  v.  Andrew,  2  M'Lean, 
464;  Kernodle  v.  Hunt,  4  Blackf.,  57;  Harlan  v.  Read,  3  Ham.,  285;  Pulsifer 
y.  Hotchkiss,  12  Conn.,  234;  Stone  v.  Peake,  16  Verm.,  213;  Ferguson  v 
Oliver,  8  S.  and  M.,  332. 

8  Thalimer  v.  Brinkerhoff,  20  John.  R.,  399.  It  is  a  rule  as  well  in  law  as 
equity,  ex  turpe  contractu  actio  non  oritur. 

'  Whitakerv.  Cone,  2  John.Cas.,  58 ;  Hunt  v.  Knickerbacker,  5  John.  R.,  327. 

*  Holman  v.  Johnson.  Cowp.,  343;  3  Term  R  ,  23;  5  id.  600. 

•  Nellis  v.  Clark,  20  Wend.,  24;  S-  C.,  4  Hill,  424;  Smith  v.  Hubhs,  1  Fairf. 
R.,  71;  Tylee  v.  Tates,  3  Barb.  R.,  222. 

6  Howsonv.  Hancock,  8  Term  R.,  575. 

7  Burt  v.  Place.  6  Cowen,  431. 

8  Hyslop  v.  Clarke,  14  John.  R.,  465;  Deering  v.  Chapman,  9  Shepley,  488; 
Hackie  and  Cains,  6  Cowen,  547;  Turk  v.  Richmond,  13  Barb.  R.,  633;  Hay 
T.  Ayling,  3  Eng.  Law  and  Eq.  R.,  416. 


CONSIDERATION.  337 

When  a  negotiable  instrument  has  passed  in  the  ordinary 
course  of  business  into  the  hands  of  a  bona  fide  holder  for  a 
valuable  consideration,  without  notice,  the  general  rule  is  that 
the  defendant  cannot  avail  himself  of  a  defence  founded  on 
the  illegality  of  the  note  or  bill  in  its  inception,  i  There  are 
exceptions  to  this  rule;  such  as  the  case  of  a  note  given  upon 
an  usurious  consideration,  or  for  money  lost  by  gaming;  such 
notes  and  securities  being  declared  by  statute  to  be  abso- 
lutely void.  2  But  even  in  these  cases,  a  bona  fide  holder  to 
•whom  the  note  or  bill  has  been  transfered  for  a  valuable  con- 
sideration without  notice,  may  recover  on  it  against  his  imme- 
diate indorser;  3  for  the  act  of  indorsement  is  the  creation  of 
a  new  contract,  and  the  law  will  not  permit  the  indorser,  who 
has  transfered  the  bill  for  value  and  thereby  asserted  it  to  be 
valid,  to  assert  its  illegality  in  consequence  of  fraudulent 
conduct  to  which  he  himself  has  been  a  party.  Plaintiff 
brings  an  action  against  the  defendant  as  the  drawer  and 
indorser  of  a  bill  of  exchange :  on  the  trial  it  appears  the  bill 
was  drawn  and  accepted  in  discharge  of  a  debt  for  money  won 
at  play,  but  that  the  plaintiff  received  it  from  the  drawer  in 
payment  of  a  bona  fide  debt,  without  notice;  whereupon  it 
was  contended  that  the  action  could  not  be  sustained  under 
the  statute;  4  which  enacts  that  "  all  notes,  bills,  bonds,  judg- 
ments, mortgages  or  other  securities,  or  conveyances  what- 
soever, given,  granted,  drawn,  or  entered  into  or  executed  by 
any  person  or  persons  whatsoever,  where  the  whole  or  any 
part  of  the  consideration  of  such  conveyances  or  securities 
shall  be  for  any  money  or  other  valuable  thing  whatsoever 
won  by  gaming,  &c.,  shall  be  utterly  void,  frustrate  and  of 
none  effect  to  all  intents  and  purposes  whatsoever :"  but  the 
court  held  that  the  case  did  not  fall  within  the  purview  of  the 
act,  that  the  policy  of  the  statute  was  to  prevent  any  security 

1Chitty  on  Bills,  81,82. 

»  Vallett  v.  Parker,  6  Wend.  R.,  615;  2  R.  S.,  56,  §  5.  8d  ed. 

'  So  held  in  the  case  of  a  note  void  against  the  maker  for  usury,  in  M'K night 
T.  Wheeler,  6  Hill,  492;  and  so  held  in  the  case  of  a  bill  given  fur  a  gambling 
debt  and  transfered  for  value,  in  Edwards  v.  Dick,  4  Barn,  and  Aid.,  212. 

4  Statute  of  9th  Anne,  c.  14,  §  1. 


338  BILLS   OF   EXCHANGE  AND    PROMISSORY  NOTES. 

given  for  the  payment  of  a  gaming  debt  from  being  enforced 
against  the  loser;  and  that  therefore  neither  the  drawer,  nor 
any  person  claiming  under  him,  can  maintain  an  action  thereon 
against  the  acceptor;  but  that  the  payee  who  indorses  it  over 
for  value,  as  good  business  paper,  cannot  allege  his  own  fraud 
as  a  defence  in  an  action  against  himself,  i 

Contracts  made  with  the  enemy  in  a  time  of  war  are  illegal 
and  void;  except  such  as  are  expressly  permitted  by  the 
government,  or  are  made  by  prisoners  for  the  payment  of 
ransom  money,  or  for  the  purchase  of  necessaries  and  the 
comforts  of  life.  2  To  use  the  words  of  Chancellor  Kent,  in 
the  most  elaborate  opinion  ever  delivered  in  this  state,  "  war 
puts  every  individual  of  the  respective  governments,  as  well 
as  the  governments  themselves,  into  a  state  of  hostility  with 
each  other.  There  is  no  such  thing  as  a  war  for  arms  and  a 
peace  for  commerce.  Trading  supposes  the  existence  of  civil 
contracts  and  relations,  and  is  therefore  contradictory  to  a 
state  of  war.  It  is  criminal  in  a  subject  to  aid  and  comfort 
the  enemy,  and  it  belongs  to  the  state  alone  to  balance  the 
evils  and  the  benefits  of  trade,  and  to  grant  licenses  to  par- 
ticular persons  when  the  exigency  of  the  circumstances  may 
require  it."  3 

Drawing  upon  and  remitting  bills  to  an  alien  enemy,  is  an 
illegal  act,  because  all  trading  and  commercial  intercourse  are 
considered  criminal  in  both  parties.  Thus,  where  three  bills 
of  exchange  were  drawn  and  indorsed  to  the  plaintiff  by  a 
Frenchman  residing  in  France,  and  accepted  by  an  English 
house  doing  business  in  London,  for  a  valuable  consideration, 
during  a  war  between  the  two  countries,  and  an  action  was 
brought  upon  the  bills  after  a  peace  had  been  concluded,  the 
transaction  was  held  to  be  illegal  and  void.  4  But  if  such 

1  4  Barn  and  Aid.,  212.  The  same  rule  applies  in  the  case  of  usury;  Ack- 
land  v.  Pearce,  2  Campb.,  599;  6  Hill,  492;  Johnson  v.  Dickson,  1  Blackf., 
256;  Hay  v.  Ayling,  3  Eng,  Law  and  Eq.  R.,  416. 

8  Griswold  v.  Waddington,  15  John.  R.,  67;  S.  C.,  16  id.  438. 

8 16  John.  R.,  466.  The  exceptions  mentioned  are  really  a  part  of  the  rule; 
in  other  words,  they  rest  upon  the  same  reason  as  the  rule  itself.  7  Taunt., 
439;  1  Marsh.,  558;  Mussen  v.  Fales,  16  Mass.,  334. 

*  Willison  v.  Pateson  and  others,  7  Taunt.,  439. 


CONSIDERATION.  339 

bills  were  drawn  and  accepted  in  a  time  of  peace,  and  a  war 
should  ensue,  though  they  could  not  be  enforced  pending  the 
war,  yet  upon  the  return  of  peace  the  right  of  action  upon 
thrm  would  revive,  i 

Contracts  made  in  furtherance  of  immorality,  or  designed 
to  facilitate  and  continue  an  immoral 'course  of  life,  are  illegal 
and  void  at  common  law;  as  where  rooms  are  let  for  the  pur- 
pose of  prostitution,-^  or  notes  and  bonds  are  given  to  secure 
thr  continuance  of  an  illicit  intercourse.  3  But  where  there 
is  an  existing  obligation,  either  legal  or  moral,  arising  out  of 
past  illicit  intercourse,  to  recompense  the  injured  party, 
it  is  held  that  a  bond  or  other  specialty  executed  for  that  pur- 
pose alone,  is  a  valid  instrument.  4  An  executory  parol  con- 
tract stands  on  a  different  footing,  and  must  be  supported  by 
a  valuable  consideration  or  a  legal  liability;  for  an  express 
promise  can  only  revive  a  precedent  good  consideration  which 
might  have  been  enforced  at  law  in  an  action  for  damages  or 
through  the  medium  of  an  implied  promise,  had  it  not  been 
suspended  by  some  positive  rule  of  law,  but  can  give  no  origi- 
nal cause  of  action  if  the  obligation  on  which  it  is  founded 
never  could  have  been  enforced  at  law.  5 

In  like  manner  contracts  for  the  sale  of  libelous  or  immoral 
and  obscene  works, «  or  for  liquors  illegally  sold;  contracts  to 
supply  drink  and  refreshments  with  the  object  of  inducing 
voters  to  cast  their  suffrages  for  a  particular  candidate;?  con- 
tracts fir  the  purchase  and  sale  of  goods  for  the  express  pur- 
pose of  being  smuggled  into  the  country,  both  parties  sharing 
in  the  profits  of  the  transaction^  and  contracts  of  indemnity 

1  Ex  parte  Rousgraakcr,  13  Yes.,  71. 

•  Girardy  v.  Richardson,  1  Esp.  R..  13. 

•  Gray  v.  Mathias,  5  Ves.,  2'Jl ;  Trovinger  v.  M'Bruney,  5  Cowcn  R.,  253; 
Wait  v.  Day,  4  Denio,  439. 

nk  v.  Miii-1.-,  l:J  Serg.  and  R.,  20;  Chitty  on  Con.,  600,  661;  Bunn  v. 
Wintl.r.-ii,  1  John.  Ch    K. 

4  K.istwood  v.  Kcnyon,  8  Per.  and  Dav.,  282;  Binnington  T.  Wallis,  4  B.  and 
Ah,  660. 

•  Fores  v.  Johnes,  4  Esp..  97;  Turk  v.  Richmond.  13  Barb.  R.,  533. 

»  Thomas  T.  Edwards,  2  M.  and  \\'..  210;  Jackson  v.  Walker,  6  Ilill,27;  S. 
C.,  7  id.  387. 

•  Holman  v.  Johnson,  Cowp.,  341;  8  Term  R.,  454,  10  B.  and  C.,  98,  99. 


340  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

against  the  consequences  of  an  unlawful  act,  such  as  a  trespass, 
made  as  an  inducement  for  its  performance;!  and  contracts 
for  the  sale  of  lottery  tickets,  the  sale  of  which  is  prohibited 
by  statute,  2  are  all  illegal  and  void,  and  consequently  no 
action  can  be  sustained  upon  a  promise  based  thereon.  For 
the  same  reason,  dropping  a  criminal  prosecution  or  supplying 
evidence,  or  compounding  a  felony  or  misdemeanor,  unless  it 
be  with  leave  of  the  court,  is  not  a  valid  consideration  for  a 
bond  or  for  a  parol  promise.  3  And  the  law  will  not  permit 
a  recovery  in  an  action  on  a  promissory  note,  where  its  con- 
sideration is  the  fruit  of  a  positive  violation  of  law  and  the 
transaction  itself  is  against  sound  morals  and  detrimental  to 
the  public  interests;  as  where  a  contractor  gave  his  note  to 
an  alderman  for  one  half  of  the  profits  of  a  contract  with  the 
city,  and  he  received  the  same  in  violation  of  his  duty  and  of 
a  positive  statute.  4 

When  the  act  contracted  to  be  done  is  illegal  j  as  where  the 
services  of  a  negro  were  sold  for  the  term  of  five  years,  he 
being  in  fact  a  free  man  at  the  time  of  the  sale,  and  a  note 
was  given  for  a  part  of  the  purchase  money;  the  vendor  can- 
not recover  on  the  contract  or  note  given  in  pursuance  thereof, 
even  though  the  sale  was  made  in  ignorance  of  the  negro's 
freedom  and  was  not  therefore  immoral.  5  But  it  is  incumbent 
upon  the  maker  of  a  note,  who  alleges  as  his  defence  that  it 
was  given  for  an  illegal  consideration,  to  establish  its  illegality; 
thus,  where  the  notes  of  a  municipal  corporation  were  loaned 
and  a  promissory  note  taken  therefor,  payable  at  a  subsequent 
day,  and  transfered  to  the  plaintiif  in  the  usual  course  of 
business,  before  it  became  due,  it  was  held  that  illegality  of 
the  consideration  did  not  invalidate  the  note  in  the  hands  of 

'Goodale  v.  Holdridge,  2  John.  R.,  193;  13  John.  R.,  366;  17  id.  142;  9 
Cow.,  154. 

9  Roby  v.  West,  4  N.  Hamp.,  385;  5  John.  R.,  327;  Biddes  v.  James,  6 
Binn.,  321. 

8  The  Steuben  Co.  Bank  v.  Matthewson,  5  Hill  R.,  245;  Mattocks  v.  Owen, 
6  Verm.,  42;  Plumer  v.  Smith,  6  N.  Hamp.,  553;  Jones  v.  Rice,  18  Pick.,  440j 
Berley  v.  Wingfield,  11  East,  46. 

4  Bell  v.  Quin,  2  Sand.  R.,  146,  and  cases  there  cited.    3  Selden,  176. 

*  Livingston  v.  Bain,  10  Wend.,  384. 


CONSIDERATION. 


341 


the  bona  fide  holder,  unless  made  void  by  statute;  and  that 
it  was  for  the  defendant  to  show  some  law  to  that  effect,  i 

It  is  laid  down  as  a  general  rule  that  wagers  are  not  illegal 
at  common  law;  2  but  wagers  that  are  immoral,  contrary  to 
public  policy,  or  in  any  respect  detrimental  to  the  public,  or 
that  affect  the  interest,  feelings  or  character  of  a  third  person, 
are  illegal  at  common  law.  Wagers  upon  the  result  of  a  prize 
fight;  3  upon  the  question  of  war  or  peace, 4  upon  the  event 
of  an  election,  or  of  a  criminal  trial,  5  and  the  like,  come 
under  the  exception  and  were  never  tolerated.  Nor  did  the 
common  law  permit  wagers  as  to  the  circumstances  or  solvency 
of  a  third  person,  or  as  to  any  event  requiring  an  impertinent, 
unjust  or  indecent  investigation  into  the  condition  or  affairs  of 
individuals.  6 

1  Rockwell  T.  Charles,  2  Hill  R.,  499.  Where  a  public  officer  is  authorized 
to  take  a  bail  bond,  and  takes  in  place  thereof  a  promissory  note  it  is  void, 
Strong  v.  Tompkins,  8  John.  R.,  98. 

»  Good  v.  Elliot,  3  Term  R.,  693;  3  Bing.  N.  C.,  460.  467. 

*Hunt  T.  Bell,  1  Bing  ,  1;  S.  C.,  7  Moore,  212. 

4  Allen  v.  I  learn,  1  Term  R.,  57. 

•  Idem,  and  M'Allister  v.  Hoffman,  16  Serg.  and  R.,  147;  Rust  v.  Gott,  9 
Cowen,  169. 

*  Chitty  on  Contr.,  497.    A  curious  case  was  once  tried  in  England,  involving 
a  wager  upon  the  sex  of  the  Chevalier  D'Eon.    He  had  served  as  a  military 
officer,  had  acted  as  a  diplomatist,  and  had  fought  duels,  but  his  appearance 
was  very  effeminate ;  and  after  he  had  resided  some  years  in  England,  frequent- 
ing race-courses  and  gaming  houses  in  male  attire,  Mr.  Dacosta  wagered  a  large 
sum  with  Mr.  Jones,  that  the  supposed  Chevalier  was  a  woman,  and  brought 
an  action  to  recover  the  amount.    The  case  coming  on  before  Lord  Mansfield, 
at  nui  print,  he  allowed  the  trial  to  proceed,  witnesses  were  called  and  exam- 
ined, and  the  jury  finally  found  a  verdict  for  the  plaintiff.    The  case  was  then 
brought  before  the  whole  court,  when,  the  verdict  being  admitted  to  be  accord- 
ing to  the  fact,  the  question  was  discussed  whether  the  action  was  maintainable. 
Lord  Mansfield  :  "  The  trial  of  this  cause  made  a  great  noise  all  over  Europe; 
and,  from  the  comments  made  upon  it,  and  farther  consideration,  I  am  sorry 
that  I  did  not  at  once  yield  to  the  consideration  that  it  led  to  indecent  evidence, 
and  was  injurious  to  the  feelings  and  interests  of  a  third  person.    I  am  sorry, 
likewise,  that  the  witnesses  subpceiued  had  not  been  told  they  might  refuse  to 
give  evidence  if  they  pleased.    But  no  objection  to  their  being  examined  waa 
made  by  the  counsel  for  the  defendant;  nor  did  any  of  themselves  apply  for 
protection,  or  hesitate  to  answer.    I  have  since  beard  that  many  of  them  had 
been  confidentially  employed  by  the  person  whose  aex  was  in  controversy,  in 
the  way  of  their  profession  or  business.     That  any  two  men,  by  laying  a  wager 
concerning  a  third  person,  may  compel  his  physicians,  servants  and  relations 
to  disclose  what  they  know  about  his  person,  would  have  been  an  alarming 


342  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES, 

There  is  another  class  of  contracts  that  are  held  illegal  and 
void  on  grounds  of  sound  public  policy;  namely,  agreements 
in  general  restraint  of  trade,  or  marriage,  i  The  law  will  not 
permit  individuals  to  oblige  themselves  by  a  contract,  when 
the  thing  to  be  done  or  omitted  is  injurious  to  the  public. 
Contracts  in  restraint  of  trade  are,  for  the  most  part,  contrary  to 
sound  policy,  and  are  consequently  held  void.  This  is  the 
general  rule.  There  may,  however,  be  cases  of  partial 
restraint,  where  the  contract  is  neither  injurious  to  the  public 
nor  the  obligor,  and  then  the  law  makes  an  exception,  and 
declares  the  agreement  valid.  But  the  general  presumption 
is  against  all  contracts  in  restraint  of  trade,  and  consequently 

1  An  agreement  in  these  words  is  void  :  "  I  do  hereby  promise  Mrs.  C.  L., 
that  I  will  not  marry  with  any  person  besides  herself;  if  I  do,  I  agree  to  pay 
to  the  said  C.  L  ,  one  thousand  pounds  within  three  months  after  I  shall  marry 
any  body  else;"  Lowe  v.  Peers,  4  Burr.,  2225;  "Wilmot  R.,  364,  S.  C.  See  also 
Conrad  v.  Williams,  6  Hill,  444. 


proposition.  Mere  indecency  of  evidence  is  no  objection  to  its  being  received 
when  it  is  necessary  to  the  decision  of  a  civil  right  or  criminal  liability.  Upon 
this  ground  we  think  that  Mr.  Justice  Burnet  was  wrong  in  refusing  to  try  the 
case  before  him  where  a  young  lady  brought  an  action  of  slander  for  saying 
that  she  had  a  defect  in  her  person  which  unfitted  her  for  marriage,  and  the 
defendant  alleged  in  his  plea  that  she  had  such  a  defect;  for  there,  if  the 
statement  was  false,  the  plaintiff  had  received  a  grievous  injury,  for  which  she 
was  entitled  to  exemplary  damages;  and  if  it  was  true,  the  defendant  ought 
to  have  been  freed  from  the  charge  of  a  malicious  lie,  however  he  might  still 
be  liable  to  censure  for  indelicately  proclaiming  the  truth.  *  *  *  We  come 
to  the  present  case.  Here  is  a  person  who  represents  himself  to  the  world  as 
a  man,  is  stated  on  the  record  to  be  Monsieur  le  Chevalier  d'  Eon,  has  acted 
in  that  character  in  a  variety  of  capacities,  and  has  his  reasons  and  advantages 
in  so  appearing.  Shall  two  indifferent  people,  by  a  wager  between  themselves, 
try  whether  he  is  a  cheat  and  imposter,  and  be  allowed  to  subpoena  all  his  inti- 
mate friends  and  confidential  attendants  to  give  evidence  that  will  expose  him 
all  over  E  urope  ?  Such  an  inquiry  is  a  disgrace  to  judicature."  Judgment 
for  the  defendant.  Dacosta  v.  Jones,  Cowp.,  729.  The  Chevalier,  as  might 
have  been  expected,  soon  after  left  England,  assumed  female  attire,  and 
remained  in  France,  supported  by  a  government  pension,  until  the  revolution 
broke  out  in  1790;  then  came  back  to  England  in  great  poverty,  and  lived 
with  a  lady  of  reputation  as  her  companion;  but  dying  in  1810,  was  found,  on 
a  post  mortem  examination,  to  be  of  the  sex  which  he  had  originally  claimed, 
and  in  all  respects  perfectly  formed. 


COXSIDERAT1OW. 


313 


it  lies  upon  him  who  seeks  to  enforce  such  an  obligation  to 
shew  that  it  is  free  from  objection,  i 

A  general  restraint  is  not  allowed; 2  but  a  partial  restraint, 
n»t  injurious  to  the  public,  founded  on  a  fair  and  beneficial 
consideration,  is  valid.  ?  There  must  be  a  good  consideration 
t-i  uphold  the  contract,  and  it  must  be  alleged  and  proved.  4 
The  law  starts  with  the  presumption  that  such  contracts  are 
opposed  to  public  policy,  and  therefore  void;  and  then  makes 
•  •ration  in  favor  of  such  as  are  founded  on  a  good  or 
adequate  consideration,  and  do  not  injuriously  affect  the 
public.  5  If  the  restraint  be  larger  than  can  be  necessary  for 
the  party  to  be  benefited,  it  is  not  binding.  The  true  rule 
seems  to  be,  that  the  parties  are  at  liberty  to  act  upon  their 
own  views  of  what  restraint  may  be  adequate  to  the  protec- 
tion of  the  one,  and  a  sufficient  consideration  to  the  other,  so 
long  as  they  do  not  make  a  contract  really  injurious  to  the 
community.  G  Mr.  Justice  Bronson  states  the  true  reason  why 
contracts  in  restraint  of  trade  are  repudiated  as  contrary  to 
public  policy;  which  is  that  they  deprive  the  public  of  the 
enterprise  and  skill  of  one  of  the  parties,  and  injure  him, 
without  any  corresponding  benefit  to  the  party  contracting  for 
such  restriction.  The  contract  injures  one  party  without 
benefiting  the  other.  7 

1  Chappel  v.  Brockway,  21  Wend.  R.,  157.  The  plaintiff  and  defendant  ran 
opposition  lines  of  packet  boats  between  Rochester  and  Buffalo,  and  the  de- 
fendant, for  a  good  consideration,  sold  out  bis  boats  to  the  plaintiff,  and 
entered  into  a  bond  conditioned  that  he  would  not  at  any  time  thereafter  own 
or  run  a  line  of  such  boats  on  that  route;  and  the  bond  was  held  valid. 

1  Homer  v.  Ashford,  3  Ring.  R.,  822. 

'  Buttn  v.  Grey,  4  East,  190. 

4  Ross  v.  Sadgbeer,  21  Wend.  R.,  166;  Mitchell  v.  Reynolds,  1  P.  Wms., 
181;  Pierce  v.  Fuller,  8  Mass.  R.,  228;  Palmer  T.  Stebbins,  8  Pick.,  188; 
Hitchcock  T.  Coker,  6  Adol.  and  Ellis,  438;  Archer  v.  Marsh,  id.  959. 

*  "  In  all  restraints  of  trade,  where  nothing  more  appears,  the  law  presumes 
them  bad;  but  if  the  circumstances  are  set  forth  that  presumption  isexcluded, 
ami  the  court  is  to  judge  of  those  circumstances,  and  determine  aeconlin^ly; 
and  if  upon   them  it  appears  to  be  a  just  and  honest  contract,  it  ought  to  be 
aaintained."    Per  Ch.  J.  Parker,  1  P.  Wms.,  181. 

*  6  Adol.  and  Ellis,  438;  and  id.  959;  83  Eng.  Com.  Law  R.,  98,  254. 
1  21  Wend.,  16ft. 


344  BILLS   OF  EXCHANGE  AND    PROMISSORY    NOTES. 

It  is  very  common  in  practice,  and  perfectly  well  settled, 
that  a  man  engaged  in  a  particular  trade  or  business  may 
agree  to  relinquish  the  same  to  another;  and  he  may  lawfully 
covenant  not  to  carry  on  the  same  trade  or  business  in  such  a 
manner  as  materially  to  interfere  with  the  business  or  profits 
of  the  one  to  whom  he  has  sold  out.  i  And  although  the 
policy  of  the  law  will  not  permit  a  general  restraint  of  trade, 
yet  a  trader  may  sell  a  secret  of  business,  such  as  a  process  of 
converting  cast  iron  into  malleable  iron,  and  restrain  himself 
generally  from  using  that  secret.  2 

On  the  same  general  principle  of  public  policy,  it  has  been 
decided  in  this  state  that  an  agreement  or  combination  among 
common  carriers  on  the  Erie  canal  to  control  the  rates  of 
freight  and  prevent  competition  between  the  several  lines 
engaged  in  the  business,  is  a  conspiracy  against  trade  and 
commerce :  3  and  that  notes  and  bills  of  exchange  and  all 
other  contracts  designed  and  made  to  carry  out  the  purposes 
of  such  an  association,  are  illegal  and  void.  4 

Kindred  to  this,  are  contracts  and  combinations  to  prevent 
competition  at  an  auction  or  sheriff 's  sale.  In  an  early  case, 
where  the  action  was  on  promissory  notes,  the  consideration 
of  which  was  an  agreement  to  forbear  bidding  at  a  sheriff' s 
sale,  the  court  say :  "  The  law  has  regulated  sales  on  execu- 
tion with  a  jealous  care,  and  enjoined  such  proceedings  as 
are  likely  to  promote  a  fair  competition.  A  combination  to 
prevent  such  competition,  is  contrary  to  morality  and  sound 
policy.  It  operates  as  a  fraud  upon  the  debtor  and  his 
remaining  creditors,  by  depriving  the  former  of  the  opportu- 
nity, which  he  ought  to  possess,  of  obtaining  a  full  equivalent 
for  the  property  which  is  devoted  to  the  payment  of  his  debts, 

1  Nobles  v.  Bates,  7  Cowen,  307;  Perkins  v.  Lymans,  9  Mass.,  622;  Davig 
v.  Mason,  5  Term  R..  118. 

9  Bryson  v.  Whitehead,  1  Sim.  and  Stu.  R.,  74;  Jarvis  v.  Peck,  10  Paige 
Ch.  R.,  118.  In  this  case  the  Chancellor  held  that  a  bond  for  the  payment  of 
money,  though  a  part  of  the  consideration  was  an  agreement  in  restraint  of 
trade,  is  nevertheless  valid,  since  it  is  not  made  illegal  by  statute. 

3  Hooker  v.  Vaadewater.  4  Denio  R.,  349.  The  act  is  a  violation  of  the 
•tatute,  2  R.  S.,  691,  §  8. 

*  Stanton  v.  Allen,  5  Denio  R.,  434. 


CONSIDERATION. 


345 


and  opens  the  door  for  oppressive  speculation."  i  The  prin- 
ciple applies  with  equal  force  when  the  agreement  between 
two  persons  that  they  will  not  bid  against  each  other,  contains 
a  stipulation  that  one  of  them  shall  buy  and  divide  with  the 
other.  -2 

Where  there  is  a  composition  with  creditors,  every  bill, 
note  or  other  security  given  to  an  individual  creditor  for  a 
larger  amount  than  the  composition  deed  purports  to  secure, 
and  without  the  knowledge  of  the  other  creditors,  is  inopera- 
tive and  void;  not  alone  because  of  its  tendency  to  diminish 
the  fund  which  the  composition  deed  provides,  or  to  lessen 
the  ability  of  the  debtor  to  meet  its  stipulated  payments,  but 
because  such  a  private  stipulation  is  a  fraud  in  law  upon  the 
other  creditors;  the  composition  deed  being  in  spirit,  if  not  in 
terms,  an  agreement  between  the  creditors  themselves  as  well 
as  between  them  and  the  debtor.  3  In  other  words,  the  law 
does  not  permit  one  of  the  creditors  who  sign  a  composition 
deed,  to  reserve  any  portion  of  his  demands  against  the  debtor, 
or  to  take  from  him  by  a  secret  arrangement  any  note,  bill  or 
security  beyond  that  secured  to  all  the  creditors;  on  the  con- 
trary, it  pronounces  every  such  private  agreement  and  all 
securities  founded  upon  it,  illegal  and  void.  4 

1  Jones  v.  Caswell,  3  John.  Gas.,  29. 

*  Doolin  v.  Ward,  6  John.  R.,  194.    But  where  several  persons  agree  with 
each  other  to  purchase  a  particular  property,  and  limit  a  price  beyond  which 
they  will  not  pay,  and  appoint  an  agent  to  bid  for  them,  the  contract  is  valid. 
Small  v.  Jones,  6  Watts  and  Serg.,  122;  13  John.  R.,  112;  3  Comst.  R.,  130; 
see  4  Denio,  287. 

•  Breck  v.  Cole,  4  Sand.  R.,  79;  Russell  v.  Rogers,  10  Wend.,  473;  Holmes 
v.  Viner,  1  Esp.  R  ,  181;  Britton  v.  Hughes,  15  Cora  Law  R..  488;  Knight  v. 
Hunt,  4  East,  371 ;  Mallalien  v.  Hodgson,  6  Eng.  Law  and  Eq.,  279.    A  com- 
pounds with  his  creditors,  of  whom  B  is  one;  B  having  received  a  preference, 
joined  in  the  composition  deed,  releasing  his  own  debt.    Prior  to  the  composi- 
tion, A  accepted  bills  of  exchange  drawn  by  B  to  the  amount  of  the  debt, 
which  were  outstanding  at  the  time  of  the  release.    B  neglected  to  take  them 
up,  and  to  induce  him  to  take  them  up,  A  gave  him  his  promissory  note.    Held 
that  the  note  was  without  consideration.     A  concealment  of  the   private 
arrangement  from  the  other  creditors  is  a  fraud  upon  them.     Britton  v.  Hughes, 
6  Bing.,  466;  Knight  v.  Hunt,  id.  432. 

4 10  Wend.,  473;  4  Sand.  R.,  79,  and  the  authorities  cited  in  those  cases. 

20 


346  BILLS    OF  EXCHANGE    AND    PROMISSORY  NOTES. 

In  like  manner,  a  note  given  by  an  insolvent  to  one  of  his 
creditors  for  the  amount  of  his  debt,  as  an  inducement  to  sign 
a  petition  for  the  debtor's  discharge  under  the  insolvent  law, 
is  illegal  and  contrary  to  the  policy  of  the  statute,  i  On  the 
same  ground,  a  bond  or  note  given  by  the  petitioning  debtor 
to  one  of  his  creditors  as  a  condition  or  inducement  for  his 
withdrawing  all  opposition  to  the  discharge;  2  and  a  note  given 
by  a  third  person  to  induce  a  creditor  to  sign  the  petition, 
with  the  knowledge  of  the  other  creditors,  is  void,  as  being 
against  the  policy  and  in  fraud  of  the  law.  3  And  it  has  been 
held  that  under  the  bankrupt  act  of  1841,  it  is  illegal  for  a 
third  person,  without  any  knowledge  or  connivance  on  the 
part  of  the  debtor  applying  for  his  discharge  as  a  bankrupt, 
to  buy  the  debt  of  an  opposing  creditor,  so  as  to  remove  his 
opposition;  and  that  promissory  notes  given  on  such  a  pur- 
chase, to  induce  the  creditor  to  withdraw  his  opposition  to  the 
debtor's  discharge,  are  illegal  and  void.  4 

Between  the  parties  to  the  transaction,  no  suit  can  be  main- 
tained on  promissory  notes  given  for  property  purchased  with 
the  intention  of  defrauding  creditors.  5  That  is  to  say,  the 
law  will  not  aid  the  plaintiff  to  enforce  a  fraudulent  contract; 
not  because  the  defendant  is  more  favored  where  both  are 
equally  criminal,  but  because  the  plaintiff  is  not  permitted  to 
approach  the  altar  of  justice  with  unclean  hands.  6  An  indi- 
vidual shall  not  be  assisted  by  the  law  in  enforcing  a  demand 
originating  in  a  breach  or  violation,  on  his  part,  of  its  princi- 
ples or  enactments.  7 

1  Payne  v.  Eden,  3  Caines'  R.,  213. 

8  Bruce  v.  Lee,  4  John.  R..  419;  Wiggin  v.  Bush,  12  John.  R.,  306. 

3  Jackson  v.  Buel,  9  John.  R.,  296.     Tinder  the  statute  "the  petitioning 
creditor  makes  affidavit  that  such  a  sum  is  due,  or  will  become  due,  and  that 
he  hath  not  received  from  the  insolvent,  or  any  other  person,  any  payment  of 
part  of  his  demand  in  money,  or  by  sale,  gift  or  reward,  upon  any  contract  or 
confidence  that  he  should  become  a  petitioner." 

4  Bell  v.  Leggett,  2  Sand.  R.,  450;  S.  C.,  3  Selden  R.,  176;  Winsor  v.  Ken- 
dall, 3  Story  R.,  607;  Fox  v.  Paine,  10  Ala.  R..  N.  S.,  523. 

6  Nellis  v.  Clark,  20  Wend.  R.,  24;  S  C.,  4  Hill,  424;  10  Barb.,  369. 

6  9  Dana  R.,  317;  15  Wend.  R.,  412;  Niver  v.  Best,  10  Barb.,  369. 

'  Watts  v.  Van  Ness,  1  Hill,  76.  Plaintiff  cannot  recover  for  work  done  on 
Sunday,  not  included  among  "works  of  necessity  and  charity."  3  Eng.  Law 
and  Eq.  R.,  416;  13  Barb.,  533. 


CONSIDERATION.  347 

Where  the  law  points  out  a  mode  in  which  a  corporation 
shall  be  organized,  or  prescribes  the  compensation  which  a 
public  officer  is  to  receive,  it  will  not  enforce  contracts  made 
in  violation  of  its  spirit  or  in  a  departure  from  its  terms;  i  as 
where  a  party  promises  to  pay  a  sheriff  an  extra  fee  for  the 
service  of  process,  or  where  an  indorsed  check  was  received 
on  a  subscription  for  stock  that  was  required  by  law  to  be 
paid  in  cash.  2 

When  the  statute  declares  that  certain  persons,  such  as 
banking  associations,  shall  not  issue  or  put  in  circulation  any 
bill  or  note  unless  the  same  is  made  payable  on  demand  and 
without  interest,  and  makes  every  violation  of  the  law  in  this 
respect  a  misdemeanor,  punishable  by  fine  or  imprisonment, 
or  both,  in  the  discretion  of  the  court;  it  has  been  adjudged 
that  promissory  notes  made  by  a  banking  association  doing 
business  under  the  statute,  payable  a  certain  length  of  time 
after  date,  with  interest,  are  illegal  and  void.  3  And  as  the 
statute,  known  as  the  Restraining  Act,  is  a  public  and  not  a 
private  statute,  every  person  receiving  such  notes,  appearing 
upon  their  face  to  have  been  issued  in  violation  of  law,  must 
take  them  chargeable  with  knowledge  of  their  illegal  cha- 
racter. 4 

Bills  of  exchange  or  negotiable  drafts  drawn  by  banking 
associations  payable  at  a  future  day,  answering  the  purpose  of 
a  circulating  medium,  are  within  the  restrictions  of  the  gen- 
eral banking  law,  and  are  likewise  illegal;  and  the  indorsee 
is  chargeable  with  notice  of  the  illegality.  5 

The  statute  pronounces  a  draft  issued  by  a  banking  institu- 
tion of  this  state,  payable  a  certain  length  of  time  after  date, 
void;  and  the  law  presumes  every  citizen  and  resident 
acquainted  with  its  requirements.  But  when  a  person  resi- 

»15  Wend.,  341,44. 

1  Crocker  v.  Crane,  21  Wend.,  211;  Hatch  v.  Man;  15  id.  44. 

*  Leavitt  v.  Palmer.  8  Comst.  R.,  19;  Bank  Commissioners  v.  St.  Lawrence 
Bank,   id.  513;  3  Selden  R.,  364.     A   guaranty  of  an  illegal  note  is  void, 
Swift  v.  Beers,  3  Denio,  70;  Tyler  T.  Tates.  8  Barb.  R.,  222. 

4  See  statutes  of  1840;  Safford  v.  Wyckoff,  1  Hill  R.,  11;  S.  C.,  4  id.  442. 

•  Smith  v  Strong,  2  Hill  R.,  241. 


348  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTfcS. 

ding  in  this  state  negotiates  such  a  draft  to  a  resident  of 
another  state,  who  takes  it  without  any  actual  knowledge  of 
our  statutes  on  the  subject,  the  indorsee  may  recover  back  the 
money  paid  for  it.  Johnson  J. :  "  The  defendant  was  a  resi- 
dent of  this  state,  and  chargeable  with  a  knowledge  of  all 
legislative  enactments  here.  The  law  imputes  to  him  know- 
ledge that  this  paper,  negotiated  by  him,  was  utterly  void  and 
worthless — no  better  than  mere  blank  paper.  The  money 
was  then  advanced  and  paid  to  him  without  consideration.  It 
was  advanced  in  Ohio,  and  the  plaintiffs  are  a  corporate  body 
of  that  state.  They  are  not  presumed  to  have  notice  of  our 
statutes.  The  statutes  of  our  state  are  only  brought  to  the 
notice  of  courts  and  citizens  of  that  state  by  proof.  *  * 
The  plaintiffs  then  stand  in  precisely  the  same  situation  as 
though  the  money  had  been  paid  by  them  under  a  mistake  as 
to  material  facts.  Ignorance  of  the  law  of  a  foreign  govern- 
ment is  ignorance  of  fact — and  in  this  respect  the  statute  laws 
of  other  states  of  this  union  are  foreign  laws."  i 

A  certificate  of  deposit  issued  by  a  banking  association, 
payable  to  the  order  of  a  particular  person,  six  months  after 
date,  with  interest,  stands  on  the  same  footing;  it  is  in  effect 
a  negotiable  promissory  note,  and  comes  within  the  prohibition 
of  the  statute.  2 

Statute  corporations,  such  as  banking  associations,  possess 
only  the  powers  and  authority  confered  upon  them  by  statute, 
and  such  as  are  necessary  to  the  exercise  of  those  powers. 
Organized  under  the  act  to  authorize  the  business  of  banking, 
they  are  clothed  with  certain  enumerated  powers,  and  per- 
mitted to  exercise  such  incidental  powers  as  are  essential  or 
necessary  to  carry  on  the  business.  Acting  within  the  legiti- 
mate scope  of  the  business,  they  may  make  any  contract 
which  is  not  prohibited  by  law;  acting  beyond  the  scope  of 
the  business  as  authorized  by  law,  the  officers  of  the  company 
have  no  power  to  bind  the  association,  3  and  the  association 

1  The  Bank  of  Chillicothe  v.  Dodge,  8  Barb.  R.,  233.     The  decision  in  this 
case  was  concurred  in  by  Justices  Selden  and  Welles. 
a  Bank  of  Orleans  v.  Merrill,  2  Hill  R.,  295. 
'  The  Bank  of  Genesee  v.  The  Patchin  Bank,  3  Kernan,  309,  per  Denio,  J. 


CONSIDERATION.  349 

Itself  has  no  power  or  capacity  to  contract,  i  For  instance, 
they  have  no  power  to  engage  in  the  purchase  and  sale  of 
stocks  for  profit,  as  a  distinct  branch  of  business,  or  as  a 
means  of  raising  money;  though  they  may  take  stocks  as 
security  for  a  loan  made  by,  or  in  payment  of  a  debt  due  to 
them.  And  it  seems  that  they  are  not  authorized  to  indorse 
negotiable  paper  for  the  accommodation  of  other  persons; 2 
though  they  have  the  right  to  sell  and  transfer  negotiable 
paper  by  indorsement.  3 

It  remains  to  consider  more  particularly  some  considera- 
tions and  contracts  which  the  law  declares  void;  such  as 
agreements  for  usurious  interest,  for  or  on  account  of  money 
or  property  or  things  in  action  staked  on  a  game  of  chance, 
for  or  on  account  of  any  raffle,  stock-jobbing  contracts,  and 
the  like.  In  this  state  the  statute  declares  that,  "  all  bonds, 
bills,  notes,  assurances,  conveyances;  all  other  contracts  or 
securities  whatsoever,  (except  bottomry  and  respondentia 
bonds  and  contracts,)  and  all  deposits  of  goods  or  other  things 
whatsoever,  whereupon  or  whereby  there  shall  be  reserved  or 
taken,  or  secured,  or  agreed  to  be  reserved  or  taken,  any 
greater  sum  or  greater  value,  for  the  loan  or  forbearance  of 
any  money,  goods  or  other  things  in  action,  than  is  above 
prescribed,  shall  be  void."  4 

There  is  a  great  diversity  in  the  statutes  of  the  different 
states  on  the  subject  of  usury:  in  several  of  them,  as  in  this 
state,  the  contract  and  securities  taken  on  an  usurious  loan, 
are  declared  void,  and  are  not  capable  of  being  enforced  under 
any  circumstances.  5  The  favor  which  the  policy  of  the  law 
extends  to  bills  of  exchange  and  negotiable  notes  is  not  allowed 
to  protect  them  against  the  terms  of  the  statute :  when  given 
on  a  usurious  contract,  they  are  void,  even  in  the  hands  of  a 
bona  fide  holder  who  has  received  the  same  for  a  valuable 
consideration  and  in  the  regular  course  of  trade.  6  The  instru- 

1  Talmage  v.  Pell,  3  Selden,  328. 
1  3  Kernan  R.,  309. 

*  Marviue  v.  Hymers.  2  Kernan  R.,  223. 

*  2  R.  S.,  66,  §  5,  3d  ed.    Seven  per  cent  is  the  rate  "  above  prescribed." 

*  Green  v.  Elmer,  4  Selden,  422;  see  note  on  subsequent  page. 

*  Wilkie  y.  Roosevelt,  3  John.  Gas.,  66,  20ti. 


350  BILLS  OF    EXCHANGE  AND   PROMISSORY    NOTES. 

ment  is  tainted  with  usury,  and  no  action  can  be  maintained 
against  either  of  the  parties  to  the  illegal  contract,  i  When, 
however,  the  payee  of  such  a  note  indorses  it  to  a  third  person 
for  value,  who  takes  it  without  notice  of  the  usury,  the 
indorsement,  as  we  have  seen,  amounts  to  a  new  and  indepen- 
dent contract  between  the  indorser  and  the  indorsee,  which  is 
not  affected  by  the  illegality  of  the  note  as  between  the  maker 
and  payee.  2 

The  revised  statutes  of  this  state,  after  declaring  all  usuri- 
ous bills  and  notes  void,  added,  "  But  this  section  shall  not 
extend  to  any  bills  of  exchange  or  promissory  notes  payable 
to  order  or  bearer,  in  the  hands  of  an  indorsee  or  holder,  who 
shall  have  received  the  same  in  good  faith  and  for  valuable 
consideration,  and  who  had  not  at  the  time  of  discounting 
such  bill  or  note,  or  paying  such  consideration  for  the  same, 
actual  notice  that  such  bill  or  note  had  been  originally  given 
for  a  usurious  consideration,  or  upon  a  usurious  contract."  3 
Under  this  provision  usurious  notes  and  bills  were  held  valid 
in  the  hands  of  an  innocent  holder  for  value  paid,  when 
received  in  the  usual  course  of  business  and  before  maturity; 
but  when  transfered  after  they  became  due,  the  holder  was 
held  to  have  received  them  subject  to  the  defence  of  usury, 
existing  against  them  as  between  the  immediate  parties  to  the 
instrument.  4  Taking  such  a  note  in  extinguishment  of  a 
previous  debt  was  held  a  receiving  of  it  for  a  valuable  con- 
sideration; 5  and  the  question  whether  it  was  received  in  good 
faith  was  solved  in  this  as  in  other  cases. 

1  Churchill  v.  Suter.  4  Mass.  156,  161 ;  Chadbourn  v.  Watts,  10  id.  121;  4 
id.  370;  6  id.  286;  Payn  v.  Luze,  2  Bay,  23;  Powell  v.  Waters,  8  Cowen,  669. 

*  M'Knight  v.  Wheeler,  6  Hill  R.,  492 ;  Edwards  v.  Dick.  4  Barn,  and  Aid  .  212. 

*  2  R.  S.,  56,  note,  3d  ed.    The  R.  S.,  took  effect  on  the  first  of  January, 
1830,  and  the  section  in  question  was  amended  in  1837,  as  stated  p.  349. 

The  statute  of  58  Geo.  3,  ch.  93,  enacts  "  that  no  bill  of  exchange  or  pro- 
missory note,  although  it  may  have  been  given  for  a  usurious  consideration,  or 
upon  a  usurious  contract,  shall  be  void  in  the  hands  of  an  indorsee  for  valuable 
consideration,  unless  such  indorsee  had.  at  the  time  of  discounting  or  paying 
such  consideration  for  the  same,  actual  notice  that  such  bill  of  exchange  or 
promissory  note  had  been  originally  given  for  a  usurious  consideration,  or  upon 
a  usurious  contract."  See  2  B.  and  A  ,  689. 

*  Hackley  v.  Sprague,  10  Wend.,  118. 

*  Bank  of  Sandusky  v.  Scoville,  24  Wend.,  115;  21  Wend.,  499. 


CONSIDERATION.  351 

Notwithstanding  the  statute  declares  void  all  contracts  and 
securities  affected  with  usury,  without  any  reference  to  the 
source  from  which  the  objection  comes,  or  the  consequences 
which  may  follow;  the  courts  have,  to  some  extent,  limited 
the  influence  of  this  sweeping  provision.  For  example,  they 
hold  that  a  bona  fide  purchaser  under  a  statute  foreclosure  of 
a  mortgage  void  for  usury,  acquires  a  good  title;  i  and  that  the 
bona  fide  holder  of  a  note,  void  in  its  inception  for  usury, 
may  take  from  the  debtor  a  new  and  valid  security  in  place 
of  the  note.  2  These  and  like  exceptions  proceed  upon  the 
principle  of  protecting,  as  far  as  possible,  an  innocent  third 
party  who  had  no  notice  of  the  usury.  3 

Moreover,  contracts  affected  by  usury,  are  not  so  utterly 
void  but  that  they  may  be  ratified;  if  a  borrower  repay  a  loan 
which  he  might  have  avoided  for  usury,  he  cannot  recover 
the  money  back  again,  though  he  may,  under  the  statute, 
recover  the  excess  which  he  has  paid  beyond  the  legal  inte- 
rest; 4  and  if  the  debtor  make  a  conveyance  of  his  land  to  the 
creditor  in  satisfaction  of  a  usurious  debt,  the  deed  cannot  be 
avoided  for  the  usury.  5 

But  as  between  the  immediate  parties,  and  in  respect  to  all 
persons  seeking  the  enforcement  of  the  contract,  it  is  void; 
and  this  taint  of  usury  in  the  original  agreement  is  carried 
forward  and  enters  into  all  subsequent  securities  taken  for  the' 
same  debt,  by  way  of  renewal  and  additional  security.  6  That 
is  to  say,  a  mere  change  of  securities,  for  the  same  usurious 
loan,  to  the  same  party  who  committed  the  usury,  or  to  a  party 
who  had  notice  of  it,  can  never  purge  the  original  considera- 
tion, or  give  a  right  of  action;?  as  where  a  note  is  given  to  the 
original  party  to  the  contract,  to  renew  and  take  up  former 

1  Jackson  v.  Henry,  10  John.  R.,  195.  But  if  the  mortgagee  purchase  under 
such  a  mortgage,  his  title  may  be  impeached.  Jackson  v.  Dominick,  14  John. 
R.,  435;  Jackson  v.  Tuttle,  9  Cowen,  233. 

1  Cuthbert  v.  Haley,  8  Term,  R.  390. 

'  Ellis  v.  Warner,  Cro.  Jac.,  33;  Bearce  v.  Barstow,  9  Huts.  R.,  45;  Hussey 
T.  Jacob,  1  Ld.  Raym.,  87. 

4  Dix  v.  Van  Wyck,  2  Hill  R.,  522,  and  cases  there  cited;  2  R.  S.,  66,  §  8. 

•  Dean.v.  Dodds,  1  John.  Cas.,  158;  Pratt  T.  Adams,  7  Paige,  615. 

•  Reed  v.  Smith,  9  Cowen  R.,  647;  Bell  v.  Lent,  24  Wend.,  280. 

•  8  Term  R.,  890. 


352  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

usurious  notes,  i  The  renewal  note  is  of  the  same  illegitimate 
progeny  as  the  first.  Not  so,  where  the  renewal  note  is  taken 
by  an  innocent  holder  of  the  former  note,  who  received  the 
same  for  a  valuable  consideration  without  notice  of  the  usury. 2 
When  a  bill  or  note  is  valid  in  its  inception,  so  that  the 
holder  may  maintain  an  action  upon  it  when  due,  no  after 
transaction  with  a  third  party  can  affect  its  validity  :  on  the 
contrary,  when  a  note  or  bill  is  made  for  the  purpose  of  rais- 
ing money  on  it,  and  is  not  delivered  as  evidence  of  an  exist- 
ing debt,  but  passed  away  in  the  first  instance  on  a  usurious 
contract;  as  where  a  note  is  indorsed  for  the  accommodation 
of  the  maker  and  he  delivers  it  as  security  for  a  usurious  loan ; 
the  instrument  is  void  in  its  original  formation.  3  In  other 
words,  if  the  bill  or  note  was  of  no  validity  in  the  hands  of 
the  holder  as  against  the  other  parties,  as  is  the  case  in  respect 
to  accommodation  paper,  and  he  procures  it  to  be  discounted 
at  a  higher  premium  than  the  legal  rate  of  interest,  it  is  void 
in  its  inception;  4  because  it  can  have  no  existence  as  a  bind- 
ing contract  until  it  is  delivered  as  such.  The  distinction  is 
between  the  purchase  of  a  note  that  has  been  made  and  de- 
livered by  the  maker  in  the  usual  course  of  business  as  evi- 
dence of  a  subsisting  indebtedness,  and  a  note  delivered  for  a 
loan  upon  it  by  way  of  discount.  To  make  it  saleable  by  him, 
the  note  must  be  perfect  and  available  to  the  holder;  and  the 
test  is  the  right  to  maintain  an  action  upon  it,  against  the 
parties  to  it,  assuming  it  to  be  then  due.  5 

Although  an  accommodation  note  is  invalid  in  the  hands  of 
the  person  for  whose  benefit  it  was  made,  and  if  discounted 
for  him  at  an  usurious  rate,  is  equally  invalid  in  the  hands  of 
the  person  who  thus  receives  it;  still,  if  the  payee  for  whose 

1  Tuthill  v.  Davis,  20  John.  R.,  286. 

*  Kent  v.  Walton,  7  Wend.  R.,  256;  Smedberg  v.  Simpson,  2  Sand.,  85. 

*  Munn  v.  Commission  Co.,  15  Johji.  R.,  44;  2  Sand.  R.,  60;  1  Kern.,  368. 
4  Powell  v.  Waters,  17  John.  R.,  176;  S.  C.,  8  Cowen,  670. 

*  8  Cowen  R.,  669,  and  authorities  there  cited;  Marvin  v.  McCullum,  20 
John.  R.,  288;  Seymour  v.  Strong.  1  Hill,  663.    In  Aeby  v.  Rapelye,  (1  Hill, 
9;)  accommodation  notes  were  sold  in  the  market  by  the  person  for  whose 
accommodation  they  were  made  at  more  than  the  legal  rate  of  discount;  held 
that  they  were  void;  Cockney  v.  Forrest,  3  Gill,  and  John.,  483. 


CONSIDERATION.  353 

accommodation  the  note  was  made,  transfers  it  as  business 
paper,  at  an  usurious  discount,  to  a  bona  fide  purchaser,  he 
cannot  afterwards  set  up  the  defence  of  usury  against  his  lia- 
bility on  the  note.  So  far  as  the  other  parties  to  the  instrument 
are  concerned,  it  is,  notwithstanding  the  misrepresentation  of 
the  vendor,  usurious  and  void ;  but  the  law  will  not  allow  him 
to  assert  that  the  representations  on  which  he  sold  the  note 
were  false,  and  thereby  make  a  profit  out  of  his  own  falsehood, 
at  the  expense  of  an  innocent  party,  i  For,  where  a  party, 
either  by  his  declarations  or  conduct,  has  induced  another  to 
act  in  a  particular  manner,  he  is  not  afterwards  permitted  to 
deny  the  truth  of  his  assertion,  to  the  detriment  of  the  per- 
son who  has  acted  upon  the  faith  of  his  representations.  2 

As  we  have  seen,  the  payee  of  an  available  note,  such  as  a 
note  given  to  him  on  a  purchase  of  merchandise,  may  sell  it 
with  impunity  for  a  higher  premium  than  the  legal  rate  of 
interest;  but  where  he  so  indorses  it  over  to  a  third  person 
for  less  than  the  face  of  the  note,  his  indorsee  is  entitled  to 
recover  thereon  in  an  action  against  him,  only  the  amount 
actually  advanced  upon  it  with  lawful  interest  from  the  time 
of  the  advance.  3  When  the  payee  transfers  the  note  without 
indorsing  it  or  guaranteeing  its  payment,  the  authorities  all 
agree  that  the  transaction  is  free  from  usury;  but  in  some  of 
the  states  where  the  payee  indorses  the  note  or  guarantees  its 
payment,  on  a  sale  for  less  than  its  face,  the  contract  between 
the  indorser  and  indorsee  is  held  usurious  and  void,  while  the 
latter  is  permitted  to  recover  against  the  maker  the  full  face 
of  the  note.  4  The  doctrine  as  held  in  this  state  is  clearly  the 

1  Dowe  v.  Schntt,  2  Denio,  621;  Holmes  v.  Williams,  10  Paige,  326;  '2  Hil!, 
622;  Truscott  v.  Davis,  4  Barb.  R.,  495. 

*  Wetland  Canal  Co.  v.  Hathaway,  8  Wend.,  483;  Dezell  v.  Odcll,  3  Ilill,  R., 
221;  4  Barb.,  495;  2  Denio 

'  Cram  v.  Hcndricks,  7  Wend.  R.,  569.  This  case  was  considered  at  great 
length;  and  the  opinions  of  the  court  of  errors  occupy  nearly  one  hundred 
pages.  1  Hill  R.,  9;  9  Barb.  R.,  647.  * 

4  Gaither  v.  The  Farmers'  and  Mechanics'  Bank  of  Georgetown,  1  Peters, 
R.,  37;  Ruffin  v.  Armstrong,  2  Hawk's  R.,  411;  Foltz  v.  May,  1  Bay.  R., 
486;  Johnson  v.  King  &  Jones.  8  McCord  L.  R.,  866;  Burt  v.  Gwin,  4  Harris 
and  Johns.  R.,  507;  Little  v.  Hord,  Hardin  R.,  81  j  Churchill  v.  Suitor.  4 
Mass.  R.,  162. 


354  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

most  logical ;  for  if  the  transfer  by  indorsement  for  a  higher 
premium  than  the  legal  rate  of  interest  is  pronounced  void, 
the  indorsee  cannot  trace  his  title  through  this  contract  of 
indorsement  in  an  action  against  the  maker  of  the  note;  and 
there  would  be  the  same  difficulty  in  the  way  of  a  subsequent 
holder's  recovering  upon  the  instrument  against  the  prior 
parties,  in  respect  to  whom  the  note  was  good  business  paper,  i 

Where  promissory  notes  that  have  been  made  in  the  regular 
course  of  business  for  a  valuable  consideration  are  hypothe- 
cated as  security  for  the  payment  of  a  usurious  loan,  the  lender 
acquires  no  title  to  the  notes;  he  holds  them  simply  as  col- 
lateral security,  and  as  such  they  must,  in  his  hands,  abide 
the  fate  of  the  principal  debt,  to  secure  which  they  were 
given.  2  But  the  validity  of  the  notes  is  not  impaired  as 
against  the  makers,  by  such  act  of  hypothecation,  and  the 
owner  of  them,  having  acquired  the  possession  of  the  paper, 
by  extinguishing  the  loan,  or  by  any  other  legal  means,  is 
restored  to  his  original  rights  as  a  bona  fide  holder.  3 

Exacting  a  premium  on  the  renewal  of  a  note,  beyond  the 
amount  due  with  legal  interest,  renders  the  new  security  usu- 
rious and  void;  but  does  not  extinguish  or  destroy  the  ante- 
cedent debt.  4  So,  if  the  new  security  be  given  for  two  or 
more  antecedent  loans,  one  of  which  was  infected  with  usury, 
the  whole  security  is  void.  The  instrument  cannot  be  void 
in  part,  and  good  for  the  residue;  for  the  statute  declares  that 
notes,  bonds,  bills  and  contracts,  whereupon  or  whereby  there 
shall  be  reserved,  taken  or  secured,  or  agreed  to  be  taken  or 
secured,  above  the  sum  of  seven  per  cent,  shall  be  void,  o  A 

1  Idem.  Where  such  a  rule  is  held,  it  is  qualified  materially;  and  the  maker 
is  not  allowed  to  set  up  usury  between  the  intermediate  parties  to  defeat  the 
action  brought  by  a  subsequent  bona  fide  holder,  notwithstanding  he  claims 
through  the  usurious  indorsement.  1  Bay  R.,  486;  4  Harris  and  Johns  R  , 
607;  Chapman  v.  Black,  2  Barn,  and  Aid.,  589. 

*  Bell  v.  Lent,  24  Wend.  R.,  230;  £wift  v.  Beers,  3  Denio,  70,  was  decided 
on  the  same  principle. 

*  Warner  v.  Gouverneur's  executors,  1  Barb.  R.,  36. 

4  Swartwout  v.  Payne,  19  John.  R.,  294;  Gray  v.  Fowler,  1  H.  Bl.,  462;  1 
Saund.,  295  a;  Markle  v.  Hatfield,  2  Johns.  R.,  455. 

*  Jackson  v.  Packard,  6  Wend.  R.,  415. 


CONSIDERATION.  355 

subsequent  agreement  for  usurious  interest,  as  the  considera- 
tion of  forbearance,  does  not  invalidate  a  previous  security; 
and  it  is  not  itself  a  valid  contract;  i  and  consequently  an 
agreement  to  extend  the  time  of  payment,  in  consideration  of 
an  executory  agreement  to  pay  a  usurious  premium,  is  void, 
and  does  not  suspend  the  remedy  of  the  creditor  against  the 
principal  debtor,  so  as  to  operate  as  a  discharge  of  sureties  on 
the  original  contract.  2 

Where  time  is  given  to  the  principal  debtor,  by  a  valid 
agreement,  which  ties  up  the  hands  of  the  creditor,  though  it 
be  for  a  single  day,  the  surety  is  discharged.  3  And  where 
the  creditor  takes  from  the  principal  debtor  a  bond  and  mort- 
gage payable  at  a  future  day,  covering  the  debt  in  question, 
and  also  one  that  is  tainted  with  usury,  it  does  not  lie  with 
him  to  repudiate  this  new  security  as  usurious  and  illegal.  4 
And  it  is  a  general  rule,  that  a  stranger  to  the  transaction 
cannot  insist  upon  the  invalidity  of  a  security  on  the  ground 
of  usury.  5 

The  statute  establishes  the  rate  of  interest,  and  then 
declares  void  all  bills  and  notes  and  other  contracts  where- 
upon or  whereby  there  shall  be  reserved  or  taken,  or  secured 
or  agreed  to  be  reserved  or  taken,  any  greater  sum  or  greater 
value,  for  the  loan  or  forbearance  of  any  money,  goods  or  other 
things  in  action,  than  the  rate  prescribed.  6  What  is  the  true 

1  Crane  v.  Hubbell,  7  Paige  Ch.  R.,  413. 

1  Vilas  v.  Jones,  10  Paige  R.,  79;  S.  C.,  1  Comst.  R.,  274;  Tudor  T.  Good- 
hue,  IB.  Monroe  L.  and  Eq.  R.,  322;  Kenningham  T.  Bedford,  id.  326, 
holds  that  such  a  contract  executed,  discharges  the  surety;  but  the  contrary 
opinion  is  strongly  expressed  in  Vilas  v.  Jones,  per  Bronson  and  Jewett, 
justices. 

*  Bangs  v.  Strong,  7  Hill  R.,  260.    Where  an  action  is  brought  on  a  judg- 
ment recovered  on  a  promissory  note  made  by  two  persons,  one  as  surety  for 
the  other,  both  of  the  defendants  are  to  be  regarded  as  principals.    La  Farge 
T.  Herter.  3  Denio,  167. 

4  La  Farge  v.  Herter,  4  Barb.  R.,  846. 

*  Post  v.  Dart,  8  Paige,  R.,  639;  9Cowen  R.,  233;  one  who  stands  in  privity 
with  the  debtor,  may  set  up  the  defence;  2  Hill,  622;  9  Paige,  137;  Churchill 
v.  Hunt,  3  Denio,  321.    The  obligor  in  a  bond  to  pay  or  indemnify  the  maker 
of  a  note  against  his  liability  thereon,  cannot  set  up  usury  in  the  note. 

*  2  R.  S.,  3d  ed.  66. 


356  BILLS   OF  EXCHANGE   AND    PROMISSORY  NOTES. 

construction  of  the  statute?  The  letter  of  the  law  pro- 
nounces void  all  contracts  and  securities  by  which  more  than 
the  prescribed  rate  shall  be  taken  or  secured;  but  it  is  evi- 
dently not  the  intention  of  the  act  to  render  a  contract  or 
security  void  on  account  of  a  mere  mistake  in  the  calculation 
of  interest,  i  or  in  drawing  the  instrument;  and  it  is  accor- 
dingly held  that,  where  more  than  seven  per  cent  is  uninten- 
tionally received  in  either  of  these  ways,  the  contract  is  not 
to  be  deemed  usurious,  a 

The  intention  of  the  contracting  parties  is  the  principal 
subject  of  inquiry,  in  determining  whether  a  contract  be 
usurious  or  not;  3  and  the  cases  go  upon  the  principle  that  a 
corrupt  agreement  is  the  essence  of  the  offence  :  4  so  that  in 
pleading  usury,  a  corrupt  agreement  must  be  alleged,  and 
upon  that  the  issue  is  taken.  5 

But  giving  and  receiving  intentionally  more  than  the  pre- 
scribed rate  of  interest,  is  in  the  sense  of  the  law  a  corrupt 
agreement;  notwithstanding  the  parties  act  upon  an  erro- 
neous interpretation  of  the  statute,  without  any  corrupt  inten- 
tion other  than  that  which  is  manifested  by  one  party's  allow- 
ing and  the  other  receiving  the  unlawful  interest.  6  The 
parties  are  supposed  to  know  what  the  law  of  the  land 
requires,  and  ignorantia  legis  neminem  excusat.  If  therefore 
they  plainly  contract  for  the  payment  of  more  than  lawful 
interest,  the  law  declares  the  agreement  between  them  corrupt 
and  usurious,  and  will  not  allow  the  intention  of  the  parties, 
however  innocent,  to  give  life  and  force  to  an  illegal  contract;  7 

1  N.  T.  Firemen  Ins.  Co.  v.  Sturges,  2  Cowen  R.,  664. 

9N.  Y.  Firemen  Ins.  Co.  v.jEly,  2  Cowen  R.,  678;  Nevison  v.  Whitley,  Cro. 
Car. ,501,  Buckley  v.  Guildbank,  Cro.  Jac..678;  Glassfordv.  Laing,!  Campb., 
149. 

1  Ord  on  Usury,  37;  2  Cowen,  704;  13  Barb.,  339. 

4  Bank  of  Utica  v.  Wager,  2  Cowen  R.,  712;  S.  C.,  8  Cowen,  398;  the  same 
v.  Smalley,  2  id.  770. 

5  Cloyes  v.  Thayer.  3  Hill  R.,  664;  Tate  v.  Wellmgs,  3  Term  R.,  531;  Car- 
lisle v.  Trears,  Cowp.,  671;  4  Paige,  533;  2  Chitty  PI.  46,  47;  Murray  v.  Har- 
ding, 2  Bl.  R.,  865;  19  John.  R.,  500;  16  id.  367. 

8  Bank  of  Maine  v.  Butts,  9  Mass.  R.,  49;  8  Cowen,  696. 
'  Marsh  v.  Martindale,  3  B.  and  P.,  153. 


CONSIDERATION.  357 

nor  will  it  permit  a  usage  of  trade,  a  custom  of  merchants,  or 
any  other  contrivance  to  evade  the  statute,  i 

Where  a  bank  discounted  a  note  for  one  thousand  dollars, 
payable  ninety  days  after  date,  and  received  eighteen  dollars 
and  nine  cents  for  the  loan,  calculating  interest  on  360  days  as 
a  year,  the  note  was  adjudged  usurious  and  void,  without  any 
other  evidence  of  a  corrupt  agreement.  2  But  under  our 
statutes,  thirty  days  are  now  the  twelfth  part  of  a  year,  for  the 
purpose  of  computing  interest. 

An  agreement  for  the  payment  of  compound  interest,  made 
after  the  interest  has  accrued,  does  not  constitute  usury ;  3  nor 
are  notes  given  for  the  balance  of  an  account,  on  which  interest 
has  been  cast  annually  and  added  to  the  principal,  usurious.  4 
Interest  is  justly  and  equitably  due  at  the  end  of  each  year, 
if  payable  annually;  and  there  is  no  legal  reason  why  the 
debtor  may  not  give  his  note  or  bond  for  its  payment.  5  A 
promissory  note  payable  three  or  five  years  after  date,  with 
interest  annually,  draws  the  established  rate  of  interest  and 
nothing  more;  but  there  are  cases  in  which  interest  upon 
interest  has  been  allowed  on  the  sum  due,  by  way  of  damages 

1  Dunham  v.  Gould,  10  John.  R..  367;  ex  parte  Aynsworth,  4  Vesey,  678. 

*  Bank  of  Utica  v.  Wager,  2  Cowen,  712;  8  id.  398;  Utica  Ins.  Co.  v.  Till- 
man,  1  Wend.,  555;  but  see  2  R.  S.,  58,  allowing  interest  to  be  calculated  in 
that  manner.    "  The  rule  for  casting  interest,  (as  laid  down  in  Connecticut  v. 
Jackson,  1  John.  Ch.  R.,  17,)  when  partial  payments  have  been  made,  is  to 
apply  the  payment,  in  the  first  place,  to  the  discharge  of  the  interest   then 
duo.     If  the  payment  exceeds  the  interest,  the  surplus  goes  towards  discharg- 
ing the  principal,  and  the  subsequent  interest  is  to  be  computed  on  the  balance 
of  principal  remaining  due.     If  the  payment  be   less  than  the  interest,  the 
surplus  of  interest  must  not  be  taken  to  augment  the  principal;  but  interest 
continues   on    the   former  principal   until    the   period   when   the  payments, 
taken  together,  exceed  the  interest  due,  and  then  the  surplus  is  to  be  applied 
towards  discharging  the   principal ;  and   interest  is  to  be  computed  on  tha 
balance  of  principal  as  aforesaid."     3  Cowen  R.,  87.    Under  this  rule  com- 
pound interest  is  wholly  excluded.    For  the  rule  in  regard  to  time,  see  2  R.  S., 
58,  3d  ed. 

*  1  John.  Ch.  R.,  14;  La  Grange  v.  Hamilton,  4  Term  R.,  618;  2  H.  Black., 
144;  Forbes  v.  Cantfleld.  8  Ohio,  17;  4  id.  !i73. 

4  Kellogg  v.  Hickok,  1  Wend.  R.,  621. 

Tylee  v.  Yates,  3  Barb.  R..  222.  The  creditor  is  entitled  to  interest  from 
the  time  a  debt  becomes  due.  Van  Rensaelaer  v.  Jewett,  2  Comst.,  135;  Dow 
T.  Drew,  3  N.  Hamp.,  40;  Mowry  v.  Bishop,  6  Paige,  98. 


358  BILLS   OF  EXCHANGE  AND  PROMISSORY    NOTES. 

for  its  detention,  i  In  other  cases  it  has  been  held  that 
interest  upon  the  annual  interest  cannot  be  recovered,  by  suit 
founded  upon  the  original  contract.  2  And  the  rule  appears 
to  be  settled  in  this  state  that  an  agreement  to  pay  interest 
upon  interest  which  is  to  accrue  subsequently,  cannot  be 
legally  enforced;  although  it  does  not  render  the  agreement 
usurious.  3  Upon  principle,  there  does  not  seem  to  be  any 
ground  of  distinction  between  an  agreement  to  pay  interest 
upon  interest  that  is  to  accrue,  and  an  agreement  to  pay  inter- 
est upon  interest  which  has  already  accrued.  4  A  compensation 
for  the  use  of  money  is  as  equitably  and  as  absolutely  due 
from  the  time  it  becomes  payable,  as  a  compensation  for  the 
use  of  land  in  the  shape  of  rent;  and  it  is  admitted  that  the 
landlord  may  recover  interest  upon  rent  due,  though  payable 
in  specific  articles.  5  It  is  said,  that  the  creditor  is  at  liberty 
to  demand  and  collect  his  interest  as  soon  as  it  becomes  due, 
and  that  by  neglecting  to  do  so  he  waives  his  right  to  recover 
anything  for  the  use  of  such  interest  money;  but  the  same 
thing  might  be  said  with  equal  reason  in  regard  to  rent. 
Indeed,  it  is  conceded  that  the  rule,  holding  prospective  agree- 
ments for  the  payment  of  compound  interest  invalid,  is  not 
founded  upon  the  usury  laws,  but  upon  public  policy,  6  and 
for  this  reason  the  rule  yields  to  considerations  of  equity.  7 

Taking  interest  in  advance  on  a  loan  of  money  is  not  usuri- 
ous; s  although  such  a  practice  undoubtedly  operates  to  give 
to  the  lender  more  than  the  rate  of  interest  prescribed  by  law.  9 

1  Pierce  v.  Rowe,  1  N.  Hamp.,  179;  Greenleaf  v.  Kellogg,  2  Mass.  R.,  568. 

*  Hastings  v.  Wiswall,  8  Mass.  R.,  455;  Doe  v.  Warren,  7  Greenl.  R.,  48; 
Sparks  v.  Garrigues   1  Binney  K.,  165. 

8  5  Paige  Ch.  R.,  98;  1  Barb.  R.,  632. 

4  Pawling  v.  Pawling,  4  Yeates  R.,  229;  Kennon  v.  Dickens,  Cam.  and  Nor. 
Rep.,  357. 

*  2  Comst.  R.,  135.     In  Pawling  v.  Pawling,  the  Supreme  court  of  Pennsyl- 
vania decided  that  an  agreement  to  pay  interest  upon  the  annual  interest  which 
should  not  be  punctually  paid  within  three  months  after  it  became  due,  was  a 
valid  agreement.     For  a  case  of  mistake  in  the  payment  of  compound  interest 
see  Boyer  v.  Pack,  2  Denio  R.,  107;  the  excess  may  be  recovered  back  in  such 
a  case. 

8  Quaekenbush  v.  Leonard,  9  Paige,  334;  8  Mass.  R.,  455. 
7  5  Wend.  R..  572. 

*  2  Cowen  R.,  678;  15  John.  B.,  168;  8  Wheat.,  838;  4  Wend.,  652. 

*  2  Cowea,  766. 


CONSIDERATION.  359 

If  a  person  loans  a  thousand  dollars  for  a  year,  and  at  the 
same  time  receives  from  the  borrower  seventy  dollars  for  the 
interest,  and  loans  that  also  on  interest,  he  will  receive  seventy- 
four  dollars  and  ninety  cents  on  his  capital,  instead  of  seventy 
dollars,  for  the  year.  By  extending  the  term  of  the  loan  a 
sufficient  length  of  time,  it  is  easy  to  see  that  the  interest 
would  in  this  manner ( absord  and  eat  up  the  principal.  But 
the  decisions  do  not  go  the  length  of  declaring  that  interest 
may  be  taken  in  advance  on  long  loans;  and  the  early  cases 
hold  explicitly  that  it  is  usurious  to  take  interest  in  advance 
on  a  loan  of  money  for  a  term  of  years,  i  Chief  Justice  Sav- 
age, in  the  Bank  of  Utica  v.  Wager,  expresses  the  opinion  that 
the  privilege  of  deducting  interest  by  way  of  discount  is  con- 
fined to  bankers,  and  those  who  deal  in  bills  of  exchange  or 
promissory  notes,  by  way  of  trade,  asserting  distinctly  that 
this  is  the  rule  in  England.  2  True,  an  authority  to  discount 
notes  and  bills  implies  the  right  to  take  interest  in  advance; 
and  where  the  authority  is  confered  by  an  act  of  the  legislature 
upon  particular  persons,  it  may  become  a  privilege.  But  in 
England,  "  where  no  statute  authorizes  bankers  to  make  dis- 
counts, it  has  been  solemnly  adjudged  that  the  taking  of 
interest  in  advance,  by  bankers,  upon  loans,  in  the  ordinary 
course  of  business,  is  not  usurious."  3 

In  an  early  case  decided  in  this  state  it  was  adjudged  that 
the  taking  of  interest  in  advance,  by  a  banking  institution,  on 
discounting  a  note,  is  not  usury;  and  this  decision  has  been 

1  In  Marsh  v.  Martindale,  (3  B.  and  P.,  154,)  the  late  plaintiff  discounted  a 
bill  of  exchange  payable  in  three  years  for  £6000,  and  deducted  the  three  years 
interest,  £760;  and  this  was  held  to  be  usurious  on  the  authority  of  Barnes  T. 
Worlich,  Cro.  Jac.  26. 

'  2  Cowen,  769.  Probably  the  practice  grew  up  among  the  class  of  persons 
alluded  to,  but  it  is  clearly  not  the  intention  of  the  statute,  or  of  the  people  to 
accord  to  them  any  superior  privilege  in  this  respect.  Maine  Bank  v.  Butts, 
9  Mass.  R.,  64. 

*  Fleckner  v.  The  Bank  of  the  U.  S-,  8  Wheat.  R.,  838.  The  cases  of  N. 
Y.  Firemen's  Insurance  Company  v.  Ely,  and  v.  Sturges,  hold  that  there  is  no 
distinction  between  bankers  or  banking  institutions  and  other  companies  and 
persons;  nor  is  it  easy  to  perceive  any  ground  for  such  a  distinction.  2  Cowen, 
664,  678. 


360  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

affirmed  and  the  principle  applied  to  other  companies  and 
persons  discounting  bills  of  exchange  and  promissory  notes,  i 

In  computing  interest  it  is  lawful  and  right  to  include  the 
three  days  of  grace,  for  the  money  is  not  practically  due  until 
the  third  day,  and  the  holder  cannot  compel  payment  till  after 
the  expiration  of  the  days  of  grace.  2 

Usury  is  a  defence  which  must  be  strictly  proved;  and 
,where  an  instrument  will  bear  two  constructions,  one  of  which 
will  render  it  operative  and  the  other  void,  the  former  should 
be  adopted.  3  Thus,  if  notes  promise  the  payment  of  interest 
from  a  time  anterior  to  their  date,  the  court  will  not  presume 
that  they  were  given  for  money  lent  at  the  time  they  were 
made ;  on  the  contrary,  the  fair  presumption  will  be  that  they 
were  given  for  goods  sold,  or  for  a  debt  due  at  the  time  from 
which  they  bear  interest.  4 

Where  a  country  bank  discounts  a  bill  payable  at  large,  for 
the  drawer,  who  desires  and  receives  for  it  drafts  on  New- York, 
it  is  not  usurious  for  the  bank  to  deduct,  in  addition  to  the 
usual  discount,  the  difference  of  exchange  between  the  two 
places;  in  effect,  this  is  only  a  double  contract;  it  is  an  ordi- 
nary discount,  and  a  sale  of  drafts  on  New- York.  5  Nor  is  it 
usurious  to  include  in  a  note  the  rate  of  exchange  between 
the  place  of  payment  and  the  residence  of  the  payee,  where 
the  note  is  made  payable  at  a  distant  place  for  the  accommo- 
dation of  the  maker.  6 

Neither  is  it  usurious  for  a  bank,  on  discounting  a  bill  of 
exchange  for  the  holder,  to  give  to  him  for  his  accommodation, 
certificates  of  deposit  payable  in  fifteen  days,  where  it  appears 

1  Utica  Ins.  Co.  v.  Bloodgood,  4  Wend.,  652;  3  id.  409.  In  this  state  bank- 
ing ''  associations  have  power  to  carry  on  the  business  of  banking,  by  discount- 
ing bills,  notes,  and  other  evidences  of  debt,  by  receiving  deposits,  &c."  1  R. 
S.,  1147,  4th  ed;  Marvine  v.  Hymers,  2  Kernan  R.,  223. 

2  Cowen,  712;  3  Pet.,  40. 

3  Cowen,  290. 

Marvin  v.  Feeter,  8  Wend.,  533. 

Cayuga  County  Bank  v.  Hunt,  2  Hill.  635;  10  Paige  R.,  109. 

Merritt  v.  Benton,  10  Wend..  116.  The  payee  resided  jn  New-York,  the 
maker  at  Little  Falls,  and  the  note  was  made  payable  at  Utica,  and  the  differ- 
ence of  exchange  between  New-York  and  Utica  was  included;  13  Barb.  R.,  339. 


CONSIDERATION.  361 

that  the  holder  of  the  bill  wants  to  use  the  money  at  a  distant 
place,  and  it  will  take  about  that  time  for  the  certificates  to 
be  sent  and  returned;  the  giving  of  the  certificates  not  being 
made  a  condition  of  discounting  the  bill.  1  Nor  is  it  per  se 
usurious  for  a  person  discounting  a  note,  to  give  to  the  bor- 
rower depreciated  notes  at  par,  where  he  seeks  the  accommo- 
dation on  the  ground  that  they  will  answer  his  purposes  the 
same  as  current  funds.  2  A  contrivance  to  evade  the  statute 
will  not  be  tolerated;  but  there  is  nothing  to  prevent  the  bor- 
rower from  receiving  bills  or  notes  at  par  that  are  worth  to  him 
par  in  his  business.  3  "  If  it  is  a  part  of  the  agreement  for 
the  loan  that  the  borrower  shall  take  uncurrent  bills  at  a 
higher  rate  than  their  actual  value,  and  for  more  than  they 
are  worth  to  either  party  in  cash  or  current  funds t  the  loan  is 
usurious."  4  So,  if  it  is  made  the  condition  of  a  discount  that 
the  borrower  shall  take  a  certain  number  of  shares  of  stock 
at  par  when  they  are  not  worth  par;  or  shall  take  bills  of 
exchange  or  uncurrent  notes  at  more  than  their  cash  value, 
the  transaction  is  usurious.  5 

It  makes  no  difference  whether  the  proposition  to  give  or 
take  a  thing  of  less  value  than  money,  on  a  loan  or  discount, 
comes  from  the  borrower  or  from  the  lender :  if  the  maker  of 
a  note  in  asking  for  a  discount  offers  to  take  a  certificate 
payable  at  a  future  day  with  less  than  legal  interest,  and  this 
offer  is  accepted,  it  avoids  the  note  just  the  same  as  if  the 
maker  had  offered  to  pay  eight  or  ten  per  cent  discount;  but 

1  Knox  v.  Goodwin,  25  Wend.  R.,  643.  The  borrower  wished  to  use  the 
funds  in  Ohio,  and  it  would  take  about  fifteen  days  for  certificates  sent  there 
to  be  returned.  But  such  certificates  are  illegal,  2  Hill  R.,  296;  3  Comst.  R.. 
19,  613 ;  3  Selden  R.,  864. 

•  Rockwell  v.  Charles,  2  Hill  R..  499. 

'  Slasson  v.  Duff,  1  Barb.  R.,  432.  In  this  case  the  question  was,  whether 
the  loan  of  uncurrent  funds,  which  were  about  three-fourths  of  one  per  cent 
below  par,  to  be  returned  within  a  week  in  current  funds,  was  in  itself  usurious; 
and  it  was  held  not  to  be  so. 

4  Cleveland  v.  Loder,  7  Paige  R.,  557;  Stewart  v.  The  Mechanics'  and  Far- 
mers' Bank,  19  John.  R.,4%;  Bank  of  the  United  States  v.  Waggoner,  9 
Peters,  378. 

1  Eggleston  v.  Shotwell,  1  Johns.  Ch.  R..  C36;  Pratt  v.  Adams,  7  Paige, 
615;  Rose  v.  Dickson,  7  John.  R.,  196. 

21 


362  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

if  he  voluntarily  accepts  such  a  certificate  after  the  transac- 
tion of  discount  has  been  closed,  it  does  not  affect  the  note,  i 
So,  if  a  person  in  his  proposition  for  a  discount  offers,  and  the 
bank  receives  at  par,  drafts  on  New- York  which  are  worth 
more  than  par,  it  is  of  no  consequence  that  the  offer  comes 
from  the  borrower :  if  more  than  the  law  allows  is  intention- 
ally received  for  the  use  of  the  money,  or  the  forbearance  of 
the  debt,  the  transaction  cannot  be  supported.  2  So,  where  a 
bank  at  Erie  discounted  bills  payable  in  New- York,  and  in 
addition  to  six  per  cent  allowed  by  its  charter  deducted  one 
half  of  one  per  cent  as  a  charge  for  collection,  at  a  time  when 
such  drafts  were  worth  at  that  place  one  half  of  one  per  cent 
premium,  the  transaction  was  regarded  as  usurious.  3  And 
so,  the  discount  of  a  note,  made  upon  an  agreement  that  the 
borrower  shall  receive  the  bills  of  the  discounting  bank,  and 
keep  them  in  circulation  until  the  note  becomes  due,  is  usu- 
rious. 4 

On  the  other  hand  it  has  been  held  that,  where  an  insurance 
company  is  applied  to  for  a  loan  of  money,  it  is  not  usurious 
for  them  to  stipulate  that  the  borrower  shall  effect  an  insur- 
ance with  the  company  at  usual  and  fair  rates.  5  Nor  is  it 
unlawful  for  a  commission  merchant,  who  under  an  agree- 
ment to  receive  produce  for  sale  on  commission,  undertakes  to 
accept  drafts  and  bills  in  advance,  to  agree  for  and  receive  a 
commission  of  two  and  a  half  per  cent  for  acceptances  or 
advances  met  otherwise  than  with  produce;  that  being  a  fair, 
usual  and  customary  allowance  for  the  trouble  and  incon- 

1  Gillett  v.  Averill,  5  Denio  R.,  85. 

2  The   Seneca  County  Bank  v.  Schemerhorn,  1  Denio,  183.     This  was  the 
case  of  a  renewal ;  the  defendant  gave  the  plaintiff  a  new  note  and  paid  the 
interest,  and  then  gave  to  the  bank  two  drafts  on  New-York,  for  $3,000,  in 
such  a  way  that  the  bank  received  the  premium  they  were  worth  in  the  market, 
namely,  twenty -two  dollars  and  a  half,  as  an  inducement  to  make  the  discount. 

8  Bank  of  U.  S.  v.  Davis,  2  Hill  R.,  451. 

4  Pratt  v.  Adams,  7  Paige,  615. 

B  Utica  Ins.  Co.  v.  Cadwell,  3  "Wend.  R  ,  296.  "  The  insurance  was  a  lawful 
act.  and  the  principal  business  of  the  plaintiffs ;  and  as  it  was  made  at  the 
usual  rates  of  premium,  there  could  be  no  shift  or  contrivance  in  this  transac- 
tion whereby  the  defendants  were  made  to  pay  more  than  seven  per  cent  in- 
terest on  the  loan  made." 


CONSIDEBATION.  363 

venience  in  transacting  the  business,  i  Neither  is  it  usurious 
for  an  agent  or  factor  to  stipulate  for  a  commission  to  be  paid 
to  him,  for  accepting  and  paying  bills  with  funds  to  be  fur- 
nished by  his  principal.  2  But  in  all  such  cases  the  true  point 
of  inquiry  is,  whether  the  arrangement  is  a  fair  business  trans- 
action, or  a  mere  device  for  the  loan  of  money  at  usurious 
rates. 

The  true  construction  of  the  statute  is  that  no  more  than 
the  prescribed  rate  of  interest  shall  be  taken,  on  a  loan,  or 
forbearance  of  money,  directly,  or  indirectly  by  way  of  loan 
of  goods  or  choses  in  action,  or  in  any  other  manner.  "  In- 
terest "  and  "  forbearance  "  cannot  be  predicated  of  any  other 
than  a  loan  of  money,  actual  or  presumed;  because  interest 
is  denned  to  be  a  certain  profit  for  the  use  of  the  loan;  and 
forbearance  is  the  giving  of  a  further  day,  when  the  time  ori- 
ginally limited  for  the  return  of  the  loan  has  passed.  3  And 
both  imply  that  the  thing  loaned  has  an  established  value,  so 
that  the  lender,  on  its  return,  with  the  compensation  fixed  by 
law  for  the  use  and  risk,  may  receive  a  "certain  profit;"  and 
this  he  can  only  do  where  there  is  a  loan  of  money,  all  other 
commodities  being  of  a  changeable  and  fluctuating  value.  4 

Accordingly,  a  loan  of  goods  or  chattels  is  not  within  the 
statute,  whatever  may  be  reserved  for  their  use;  because  there 
is  an  uncertainty  whether  the  thing  to  be  returned  will  at  the 
end  of  the  term  be  of  the  same,  or  less,  or  greater  value  than 
it  is  at  the  time  the  loan  is  made.  5  The  reason  of  the  rule 

1  Trotter  v.  Curtis,  19  John.  R.f  160;  Suydam  v.  Westfall,  4  Hill  R.,  211; 
De  Forest  T.  Strong,  8  Conn.  R.,  613. 

*  Suydam  v.  Bartle,  10  Paige  R.,  94. 

*  Ord  on  Usury,  80,  24j  per  Gardiner,  J.,  in  The  Dry  Dock  Bank  v.  The 
American  Life  Ins.  and  Trust  Co.,  8  Comst.  R.,  844,  reviewing  the  authorities 
on  the  subject. 

*  Money  itself  has  not  a  fixed  and  unchangeable  value,  but  it  comes  nearer 
to  it  than  any  other  article,  and  the  law  moreover  makes  it  the  measure  of  the 
value  of  other  property.    1  R.  S.,  780,  8d  ed. 

•Cummings  v.  Williams,  4  Wend  R.,  679.  Williams  loaned  Cummings  a 
two  year  old  heifer  and  calf,  and  Cummings  agreed  within  four  years  to  return 
the  heifer  and  another  heifer,  both  to  be  with  calf;  Williams  incurring  only  the 
risk  of  the  loaned  heifer's  being  killed  by  lightning.  At  the  time  of  the  loan 
the  heifer  was  worth  from  $15  to  $18,  at  the  time  of  the  return  from  $20  to 


364  BILLS  OF   EXCHANGE  AND    PROMISSORY   NOTES 

applies  to  agreements  for  the  loan  of  cattle,  grain  and  flocks, 
and  every  thing  except  money,  the  value  of  which  is  subject 
to  fluctuation,  i  Thus,  the  owner  of  stock  may  loan  it  on  the 
understanding  that  the  borrower  is  to  convert  it  into  money, 
pay  the  accruing  dividends  to  the  lender  for  its  use,  and  restore 
or  replace  the  stock  at  the  end  of  the  term;  for  such  a  con- 
tract is  really  in  the  nature  of  a  speculation  and  bargain  of 
hazard.  2  The  owner  bears  the  risk  of  depreciation,  and  has 
a  right  to  say  upon  what  terms  he  will  dispose  of  his  property 
for  a  given  length  of  time.  No  doubt  such  a  contract,  when 
the  hire  exceeds  the  rate  of  legal  interest,  may  be  converted 
into  a  usurious  loan  by  an  agreement  on  the  part  of  the  bor- 
rower to  return  similar  stock,  equal  in  value  to  that  loaned; 
for  by  so  doing  the  contract  becomes  in  substance  a  loan  of  so 
much  money,  in  the  form  of  stock,  to  be  returned  absolutely 
in  a  specified  article,  and  the  owner  is  thereby  exempted  from 
the  risk  of  depreciation.  3  Take  an  adjudged  case  for  illus- 
tration :  the  owner  of  a  flock  of  sheep  lets  them  for  fifty  cents 
a  head,  to  be  paid  annually,  on  an  agreement  for  the  return 
of  the  same  number  of  sheep,  of  the  same  quality  and  age : 
this  is  clearly  not  an  usurious  loan;  on  the  contrary  it  is  a 
sale,  —  it  cannot  be  determined  as  a  matter  of  law  what 
will  be  the  value  of  the  flock  to  be  returned.  4  But  suppose 
the  parties  had  in  their  contract  estimated  the  value  of  the 
sheep  at  a  certain  sum,  and  agreed  for  the  return  of  that  sum 
in  sheep  of  a  particular  quality;  here,  manifestly,  the  ques- 
tion would  be  whether  fifty  cents  a  head  per  annum  is  more 
than  the  legal  rate  of  interest  on  the  loan.  5 

1  Steptoe  v.  Harvey,  7  Leigh,  500;  Tate  v.  Welling,  3  Term  R.,  538;  8 
East,  304. 

a  Pike  v.  Ledwell,  5  Esp.  R.,  164;  3  Term,  531;  "Wilson  v.  Kilburn,  1  J.  J. 
Marsh.  494. 

3  Comyn  on  Usury,  114. 

4  Hall  v.  Haggart,  17  Wend.  R.,  280. 

6  Barnard  v.  Young,  17  Ves.,  44;  White  v.  Wright,  5  Dowl.  and  Ryl.,  110; 
Whipple  v.  Powers,  7  Verm.  R.,  457;  Rice  v.  Bull,  1  Selden,  315. 

$25,  and  the  other  heifer  to  be  returned  was  worth  from  $15  to  $18.  Held  that 
the  contract  was  not  usurious.  Spencer  v.Tilden  is  to  the  same  effect,5  Cowen  R., 
144,  and  Holmes  v.  Wetmore,  id.  149 ;  and  Hamlin  v.  Fitch,  Kir  J.  Conn.  R  j  26), 


CONSIDERATION.  365 

A  sale  of  credit  made  in  good  faith  is  no  more  within  the 
prohibition  against  usury  than  a  sale  of  merchandise,  i  For 
example,  the  owner  of  a  bond  and  mortgage  may  sell  the  same 
for  less  than  the  amount  due,  and  execute  to  the  purchaser  a 
valid  bond,  conditioned  that  the  mortgagor  shall  pay  the  full 
amount  of  the  mortgage; 2  any  person  may  sell  his  indorse- 
ment, and  take  a  percentage  on  the  amount  of  the  note 
indorsed;  3  or  sell  his  guaranty  to  be  indorsed  on  a  promissory 
note.  4  For,  as  the  law  now  stands,  a  man  has  as  good  a  right 
to  sell  his  credit  as  he  has  to  sell  his  goods  or  his  lands;  and 
if  he  deal  fairly,  he  may  take  as  large  a  price  as  he  can  get 
for  either  of  them.  Of  course  the  principle  applies  to  every 
engagement,  direct  or  collateral,  assumed  in  good  faith,  by 
one  man  for  another,  for  a  stipulated  consideration.  5 

In  brief,  neither  sales  of  credit,  nor  loans,  nor  sales  of  pro* 
perty  other  than  money,  are  touched  by  the  statute.  But  the 
law  does  not  tolerate  usury  disguised  under  any  form;  either  in 
the  shape  of  a  sale  of  credit,  6  or  of  property,  7  or  a  loan 
of  either.  8  Where  the  contract  in  form  is  one  of  sale  or 
exchange,  if  the  court  looking  at  the  whole  transaction  can 
see,  that  the  value  secured  to  the  vendor,  was  in  good  faith 
but  the  price  of  the  thing  sold,  or  exchanged  by  him,  there 
can  be  no  usury,  whatever  the  price  may  be,  or  the  mode  in 
which  it  may  be  reserved.  9  But  where  the  object  of  the 
parties  is  a  loan  of  money,  and  something  else  under  the  form 
of  an  exchange  or  sale  is  evasively  substituted  for  it,  the 
principal  of  the  loan,  and  consequently  of  the  debt  contracted 

1  3  Comst.,  356;  19  John.  R.,  160;  4  Hill  R.,  211. 
1  Rapclye  v.  Anderson,  4  Hill  R.,  472. 
»  Ketchum  v.  Barber,  4  Hill  R.,  226;  S.  C.,  7  id.  444. 
4  More  v.  Howland,  4  Denio  R.,  264. 

*  Dunham  v.  Dey,  13  John.  R.,  40.    An  exchange  of  notes  for  a  commission 
was  not  treated  as  per  te  usurious. 

•  13  J  »lm.  R.,  40;  3  Comst.  R.,  344;  4  Selden  R.,  426. 

7  1  Bro.  Ch.  C.,  150;  Lowe  v.  Waller,  Dougl.,  786;  2  Campb.,  375;  Holt's 
K.  P.O. ,295. 

•  21  Wend.  R.,  103;  4  Hill,  224;  5  Barb.,  613,  2  John.  Ch.  R.,182;  2  Barb., 
56. 

*  Beebe  v.  Bloodgood,  4  B.  and  Cres.,453;  Van  Schaick  v.  Edwards,  2  John. 
Gas.,  336 ;  9  Peters,  378;  1  Hill,  227;  1  B.  and  P.,  151;  4  Comst.,  363,463. 


366  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

by  the  nominal  vendee,  will  be  the  value  in  money  of  the 
substitute;  and  any  consideration  paid  or  secured  to  the 
vendor  beyond  that,  will  in  general  be  considered  as  interest 
for  its  forbearance,  i 

Where  a  note  is  made  in  another  state  or  territory,  bearing 
eight  per  cent  interest,  and  is  not  made  payable  at  any  par- 
ticular place,  the  court  will  not  presume  it  to  be  usurious 
according  to  the  law  of  the  state  in  which  it  was  made :  2  nor 
will  a  contract  bearing  seven  per  cent  interest,  made  in  this 
state  by  a  corporation,  chartered  in  another  and  in  terms 
required  to  observe  its  usury  laws,  six  per  cent  being  its 
established  rate  of  interest,  be  declared  usurious  or  invalid;  3 
for  the  lex  loci  contractus  governs  in  both  cases.  Neither  will 
a  note  made  in  one  place  payable  in  another,  be  declared 
usurious  for  the  reason  that  the  rate  of  exchange  was  in  favor 
of  the  place  of  payment,  at  the  time  the  note  was  made.  4 
The  ground  of  decision  here  is  this;  it  cannot  be  presumed 
that  the  rate  of  exchange  will  continue  in  favor  of  the  place 
of  payment.  On  the  same  principle,  it  is  not  usurious  for  a 
country  bank,  discounting  paper  payable  in  New- York,  and 
giving  therefor  at  the  request  of  the  borrower,  drafts  on  the 
city,  to  deduct  interest  and  the  difference  of  exchange  between 
the  two  places.  5  Denio  J. :  "  The  exacting  of  a  premium 
of  exchange  on  the  drafts,  with  which  the  proceeds  of  the 
discounted  paper  were  paid,  presents  a  question  of  more 
difficulty.  Some  of  the  protested  paper,  which  formed  the 
consideration  of  note  sued  on,  was  payable  in  terms  in  the 
city  of  New-York;  and  the  evidence  tended  to  shew  that  por- 
tions of  the  proceeds  of  such  paper  were  paid  in  drafts  on 
New- York,  upon  which  a  premium  of  exchange  was  charged 
and  allowed.  Now,  if  the  contract  of  the  maker  or  acceptor 
of  this  paper  had  been  performed  according  to  its  terms,  the 

1  Dougl,  786;  1  Bro.  Ch.  C.,  150;  2  Campb.,  375;  Comyn  on  Usury,  94,  95j 
Brooks  v.  Avery,  4  Comst.  R.,  225;  1  Selden,  315. 
4  Davis  v.  Garr,  2  Selden,  124. 
"  Bard  v.  Poole,  2  Kernan  R.,  495. 
4  Cuyler  v.  Sandford,  13  Barb.  R.,  339. 
*  Marvine  v.  Hymers,  2  Kernan  R.,  223. 


CONSIDERATION.  367 

bank  would,  at  maturity,  have  received  payment  at  the  same 
place  at  which  its  drafts  were  payable,  and  consequently  of 
the  same  value;  and,  having  received  the  interest  for  the 
whole  period  of  credit,  it  would,  in  this  way,  secure  the 
amount  of  the  premium  of  exchange  in  addition  to  the  legal 
interest.  Independently  of  the  fact  that  the  bank  was  to  be 
ultimately  reimbursed  in  the  same  species  of  funds  which  it 
had  advanced,  there  is  no  objection  upon  principle  to  its 
securing  the  difference  of  exchange  upon  the  drafts  which  it 
gave  the  borrower  instead  of  its  own  circulating  notes.  It 
had  a  legal  right  to  loan  its  own  notes;  but  if  the  borrower 
elected  to  take  funds  more  valuable  because  they  were  on 
deposit  at  a  different  place,  it  was  quite  right  that  he  should 
pay  this  difference  in  value."  Besides,  neither  the  court,  nor 
the  parties  can  know  certainly  that  the  paper  discounted  will 
be  worth  a  premium,  because  payable  in  the  city  of  New- 
York,  at  the  time  it  matures.  The  course  of  trade  renders  it 
very  probable,  but  does  not  establish  it  with  that  certainty 
which  will  authorize  the  court  to  pronounce  on  it  as  a  question 
of  law.  i 

By  the  statutes  of  this  state,  all  contracts  for  or  on  account 
of  any  money  or  property  or  thing  in  action,  wagered,  bet  or 
staked  upon  any  race,  or  upon  any  gaming  by  lot  or  chance, 
or  upon  any  casualty,  or  unknown  or  contingent  event,  are 
declared  void; 2  and  contracts  and  securities  given,  made  or 
executed  for  or  on  account  of  any  raffle,  or  distribution  of 
money,  goods  or  things  in  action,  for  the  payment  of  any  money 
or  other  valuable  thing,  in  consideration  of  a  chance  in  such 
raffle  or  distribution,  or  for  the  delivery  of  any  money,  goods 
or  things  in  action,  so  raffled  for,  or  agreed  to  be  distributed, 
are  placed  upon  the  same  footing.  3 

Under  these  statutes,  bills  and  notes  given  for  the  amount 
of  a  gaming  debt,  or  in  the  execution  of  any  such  invalidated 

1  Cayuga  Co.  Bank  v.  Hunt,  2  Hill,  685,  commented  upon  by  Judge  Denio, 
2  Kernan,  232.  If  the  bank  discounting  the  paper  were  to  insist  upon  such  an 
arrangement  as  a  condition  of  the  discount  or  loan,  it  would  present  a  different 
question  from  that  passed  upon  by  the  court. 

«  1  R.  S.,  839,  3d  ed. 

» Id.  841,  of  raffling  and  lotteries. 


368  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

contract,  are  inoperative  and  void,  i  The  law  begins  by 
declaring  all  wagers  and  bets  unlawful,  and  concludes  by 
annulling  every  contract  growing  out  of  such  a  transaction.  2 
In  effect,  such  contracts  are  placed  in  the  same  category  with 
agreements  which  the  law  declares  void  on  account  of  usury; 
and  hence  the  same  qualifications  and  principles  are  applicable 
to  both  species  of  contract,  a  If  the  payee  of  a  usurious  note 
indorses  it  over  to  a  third  person,  who  takes  it  for  value  and 
without  notice  of  the  usury,  he  is  liable  on  his  indorsement 
as  on  a  new  contract;  and  so  the  holder  of  a  bill  taken  for  a 
gambling  debt,  who  indorses  it  over  to  another  person  for  a 
valuable  consideration,  is  liable  thereon,  he  is  estopped  from 
asserting  its  invalidity,  t 

As  between  the  immediate  parties  to  a  bill  or  note  given  for 
a  gaming  debt,  or  for  money  won  on  a  wager,  or  on  a  game  of 
chance,  the  law  refuses  to  enforce  it  in  favor  of  one  against 
the  other.  Thus,  where  the  owner  of  a  horse  worth  twenty- 
five  dollars,  sold  him  and  received  from  the  purchaser  in  pay- 
ment a  note  for  fifty  dollars,  payable  when  Martin  Van  Buren 
should  be  elected  president  of  the  United  States,  it  was  held 
that  the  note,  being  given  pending  the  election  and  while  that 
gentleman  was  a  candidate  for  the  office,  was  in  substance  a 

1  Bowyer  v.  Brampton,  2  Stra.,  1153. 
3  3  Denio  R.,  108,  340. 

3  McKnight  v.  Wheeler,  6  Hill  R.,  492;  Quids  v.  Harrison,  28  Eng.  Law  and 
Eq.  R.,  524.    This  was  an  action  upon  a  bill  of  exchange  drawn  by  one  Bennett 
upon  the  defendant,  payable  to  the  order  of  Bennett,  and  by  him  indorsed  to 
the  plaintiff.     The  transaction  was  as  follows  :  Bennett  had  advanced  money 
to  pay  bets  made  by  him  on  account  of  the  defendant,  and  had  paid  the  bets 
so  made  without  any  special  request  from  the  defendant  to  pay  them,  and  the 
bill  in  question  was  accepted  by  the  defendant  for  the  money  so  paid.     Held 
that  these  circumstances  did  not  furnish  any  defence  to  the  action.    Hay  v. 
Ayling,  3  id.  416;  action  by  the  drawer  against  the  acceptor  of  a  bill.    Th 
defence  was  that  the  consideration  of  the  acceptance  was  a  bet  lost  by  him  t< 
A.  B.,  and  that  the  defendant  had  notice  of  the  premises  at  the  time,  ant 
accepted  the  bill  at  the  request  of  A.  B.,  to  secure  the  payment  of  the  money 
so  lost  at  play.    Held  that  the  defence  was  good,  the  statute  5  and  6  Will.  4, 
c.  41,  §  1,  providing  that  such  securities  shall  be  deemed  to  have  been  made 
for  an  illegal  consideration,  and  thereby  making  them  void  except  in  the  hands 
of  a  bona  fide  holder. 

4  Edwards  v.  Dick,  4  Barn,  and  Aid.,  212. 


CONSIDERATION,  369 

wagering  contract,  and  therefore  void,  i  But  such  a  contract 
would  have  been  void  at  common  law,  whether  made  before 
the  election  or  after  it  and  before  the  result  was  known  to  the 
parties.  In  November,  1828,  the  defendant  promised  to  pay 
the  plaintiff  one  cent  for  every  vote  which  Mr.  Van  Buren 
had  received  for  the  office  of  governor  of  this  state,  at  the 
election  just  held,  over  twenty  thousand  more  than  were  given 
for  Smith  Thompson,  his  competitor  for  that  office;  and  as 
Mr.  V.  B.  received  over  thirty  thousand  more  votes  than  his 
opponent,  the  plaintiff  claimed  to  recover  one  cent  each  for 
the  excess  over  twenty  thousand;  but  it  was  adjudged  that 
such  betting  upon  the  result  of  an  election,  tending  as  it  does 
to  agitate  questions  affecting  the  validity  and  fairness  of  the 
canvass,  is  of  pernicious  influence,  and  therefore  not  to  be 
sanctioned  by  law.  2 

The  general  policy  of  the  law  favors  the  circulation  of  nego- 
tiable paper  and  holds  it  invalid  in  the  hands  of  a  bona  fide 
holder  only  in  obedience  to  the  positive  requirements  of  the 
statute.  3  But  where  the  statute  declares  affirmatively,  cer- 
tain securities  void,  such  as  those  given  for  money  won  at  play 
or  loaned  at  unlawful  interest,  th?  courts  are  not  at  liberty  to 
give  effect  to  them  in  any  form.  4 

Notes  or  bills  given  for  money  lent  to  game  with,  come 
under  the  prohibition  of  the  act,  and  are  void;  5  and  for  the 
same  reason  no  action  can  be  maintained  for  money  knowingly 
lent  for  an  illegal  purpose,  as  for  money  lent  to  be  staked  on 
the  event  of  a  horse  race.  6  The  rule  is,  that  the  law  will  not 

1  Danforth  v.  Evans,  16  Verm.,  638. 

1  Brush  v.  Keeler,  5  Wend.  R.,  250;  Lansing  v.  Lansing,  8  John.  R.,  354; 
Rush  v.  Gott,  9  Cowen  R.  169;  Visscher  v.  Yates,  11  John.  R.,  23.  In  Wil- 
liams v.  Smith,  it  was  held  that  a  note  made  payable  when  W.  H.  H.  should 
be  elected  president  was  valid;  3  Scam.,  524.  And  it  has  been  held  in  the 
same  state  that  a  note  given  for  a  wager  on  the  result  of  a  presidential  elec- 
tion, is  valid  in  the  hands  of  a  bona  fide  holder;  3  Scam.,  255. 

1  Churchill  v.  Suter,  4  Mass.  R.,  156. 

•  Bayley  v.  Taber,  5  Mass.  R.,  286.    As  to  the  rights  of  the  parties  under 
the  statutes,  see  Fowler  v.  Van  Surdam,  1  Deuio,  557,  and  cases  there  cited; 
Buckman  v.  Pitcher,  1  Comst.  R.,  392. 

•  2  Stra.,  1153. 

•  Ruckman  v.  Bryan,  3  Denio  R.,  340. 


370  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

countenance  an  action  that  goes  in  affirmance  of  an  illegal 
contract,  i  But  a  contract  is  not  treated  as  illegal  here,  if 
made  and  designed  to  be  performed  in  another  state  where  it 
is  valid :  in  such  a  case  it  is  enforced  out  of  respect  to  the 
foreign  law  and  upon  the  principles  of  comity.  2 

Stock  jobing  contracts,  that  is  to  say,  agreements  for  the 
sale  or  transfer  of  stocks  made  by  a  person  who  is  not  the 
owner  of  the  stock  at  the  time  the  contract  is  made  and  not 
authorized  by  any  person  to  sell  the  same,  are  declared  void ;  3 
they  are  in  substance  wagering  contracts.  And  hence  as 
between  the  immediate  parties,  bills  and  notes  founded  on  the 
transaction,  are  also  void.  But,  where  the  statute  does  not 
annul  all  such  securities,  they  are  valid  in  the  hands  of  a  bona 
fide  holder,  who  takes  them  for  value  and  before  maturity.  4 

In  relation  to  several  other  species  of  prohibited  contracts, 
it  is  sufficient  to  state  the  general  rule  of  commercial  law, 
that  the  illegality  of  the  consideration  of  a  note  or  bill  will 
not  invalidate  it  in  the  hands  of  a  bona  fide  holder,  if  taken 
in  the  usual  course  of  trade,  unless  made  void  by  statute.  5 
Savage  Ch.  J. :  "I  understand  the  rule  in  England  to  be, 
that  when  the  legislature  has  declared  that  the  illegality  of 
the  contract  or  consideration  shall  make  the  note  void,  the 
defendant  may  set  up  that  defence,  though  the  note  be  in  the 
hands  of  a  bona  fide  holder;  but  unless  it  has  been  so 
expressly  declared  by  the  legislature,  illegality  of  considera- 
tion will  be  no  defence  against  a  bona  fide  holder,  without 
notice,  and  for  sufficient  consideration,  unless  he  obtained  the 
note  after  it  became  due.  The  rule  is  the  same  in  this  court."  6 

The  latter  branch  of  this  rule  may  be  illustrated  by  such 
cases  as  these  :  A  note  given  for  a  pretended  title,  7  or  for 

1  5  John.  R.,  327. 

*  Thatcher  v  Morris,  1  Kernan  R.,  437. 

*  1  R.  S.,  892,  3d  ed. 

*  Day  v.  Stuart,  6  Bing.,  109;  13  Yes.,  313;  Caiman  v.  Brice,  3  B  and  Aid., 
179;  3  M.  and  W.,  434. 

6  Rockwell  v.  Charles,  2  Hill  R.,  499. 
8  Vallett  v.  Parker,  6  Wend.  R.,  615. 

*  Baker  v.  Arnold,  3  Cai.,  279. 


CONSIDERATION.  371 

the  purchase  money  of  lands  held  adversely;  i  a  note  issued 
by  a  corporation  in  violation  of  the  restraining  law,  it  being 
such  a  note  as  the  bank  might  give  in  some  cases ;  2  or  a  note 
taken  by  a  corporation  without  authority,  is  valid  in  the  hands 
of  a  bona  fide  holder.  3 

In  general,  no  person  is  entitled  to  be  considered  the  bona 
fide  holder  of  negotiable  paper,  unless  he  acquires  the  same 
before  it  becomes  due,  in  good  faith  and  for  value.  Receiving 
it  after  it  is  due  throws  a  suspicion  upon  the  transaction.  Re- 
maining unpaid  after  its  maturity,  the  bill  or  note  is  dishonor- 
ed, and  it  comes  disgraced  to  the  indorsee,  and  it  is  his  duty  to 
make  inquiries  concerning  it.  If  he  takes  it,  though  he  gives 
a  full  consideration  for  it,  he  does  so  on  the  credit  of  the 
indorser  and  subject  to  all  the  equities  with  which  it  may  be 
encumbered.  4 

In  good  faith.  It  is  manifest  that  no  one  can  be  considered 
a  bona  fide  holder  of  a  negotiable  note  or  bill  of  exchange 
unless  he  receives  the  same  in  good  faith,  or  as  it  is  sometimes 
expressed,  without  notice  of  the  facts  and  circumstances  going 
to  impeach  its  validity  or  to  diminish  the  amount  recoverable 
thereon.  Though  he  takes  the  note  before  it  is  due,  he  can- 
not recover  on  it  if  he  takes  it  with  knowledge  that  it  has 

1 6  Wend.,  615. 

*  Stoney  v.  The  American  Life  Ins.  Co.,  11  Paige  R.,  635. 

8  Willmarth  v.  Crawford,  10  Wend.  R.,  341 ;  see  also  4  Barb.,  453;  and  Bank 
of  Genesee  v.  Patchin  Bank,  3  KernanR.,  309. 

4  Tinson  v.  Francis.  1  Carapb.,  19;  Tucker  v.  Smith,  4  Greenleaf,  415; 
Andrews  v.  Pond,  13  Peters,  66.  In  Johnson  v.  Bloodgood,  Mr  J.  Kent  states 
the  reason  of  the  rule  thus  :  "  When  a  note  is  offered  for  sale,  after  it  becomes 
due.  and  at  a  discount,  what  is  the  necessary  inference  ?  Most  certainly  that 
the  maker  is  insolvent,  and  if  so,  his  effects  and  credits  ought  immediately  to 
enure  to  the  benefit  of  his  creditors,  and  he  be  regarded  only  as  their  trustee. 
The  presumption  will  be,  for  so  indeed  justice  would  dictate,  that  the  insolvent 
makes,  forthwith,  a  full  and  frank  disclosure  and  assignment  of  all  his  property 
for  the  payment  of  his  debts."  1  John.  Cas.,  55.  When  a  person  takes  a 
note  overdue,  he  takes  it  subject  to  all  equitable  defences;  and  suing  on  it,  he 
stands  in  the  place  of  the  payee,  4  Mass.  R.,  870;  5  John.  R.,  118,  so  that  a 
set-off  may  be  set  up  against  him,  or  any  other  defence  which  the  maker  has 
against  the  payee,  either  in  mitigation  of  damages  or  in  bar  of  a  recovery.  8 
Mass.,  418. 


372  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

been  paid,  l  But  he  may  recover  on  a  note  received  before  its 
maturity,  notwithstanding  it  is  transfered  to  him  by  a  special 
indorsement  importing  that  the  indorser,  one  of  a  firm,  does 
not  know  for  what  consideration  it  was  given.  2  If,  however, 
he  takes  the  note  with  such  information  as  would  naturally 
create  suspicion  and  ought  to  put  a  prudent  man  upon  inquiry; 
as  if  it  have  a  memorandum  on  the  back  that  it  was  made  on 
a  diiferent  day  from  that  on  wThich  it  bore  date,  and  it  is  not 
shewn  that  the  holder  gave  value  for  the  note;  he  cannot 
recover  as  a  bona  fide  holder.  3  The  mere  fact  that  a  note  is 
negotiated  before  the  day  on  which  it  bears  date,  is  not  in 
itself,  and  disconnected  from  other  circumstances,  a  legal 
ground  of  suspicion,  so  as  to  put  the  indorsee  upon  inquiry, 
and  subject  him  to  all  the  equities  existing  between  the  origi- 
nal parties.  4  Taking  a  note  mala  fide,  5  or  with  knowledge 
that  it  was  made  upon  some  condition,  6  or  as  security  for  an 
usurious  loan,  7  does  not  clothe  the  holder  with  the  rights  of  a 
person  acting  in  good  faith.  Nor  can  a  person  be  deemed  a 
bona  fide  holder  who  takes  partnership  paper  for  the  debt  of 
an  individual  partner,  s  or  who  takes  negotiable  paper  signed 
by  one  of  the  firm  in  the  partnership  name  "  as  sureties," 
without  ascertaining  that  the  other  partners  assent  to  the  tran- 
saction. 9 

For  value.  On  a  question  of  title,  where  negotiable  notes 
or  bills  have  been  misappropriated,  or  lost  or  stolen,  if  a 
subsequent  holder  takes  them  innocently  for  a  full  or  valuable 
consideration  by  giving  money,  or  money  and  goods  for  them, 

J  White  v.  Ribbing,  11  John.  R.,  128. 

•  Russell  v.  Ball  and  Cook,  2  John.  R.,  50.    The  presumption  in  favor  of 
notes  and  bills  is  not  overcome  by  a  refusal  of  the  indorser  to  make  himself 
responsible  on  them:  nor  by  his  declaration  that  he  does  not  know  for  what 
they  were  taken,  it  being  evident  that  the  paper  was  taken  by  his  partner. 

3  Wiggins  v.  Bush,  12  John.  R.,  306;  Smith  v.  Strong,  2  Hill  R.,  241,  295. 

4  Brewster  v.  McCardel,  8  Wend.  R.,  478 ;  1  Cowen,  337;  Passmore  v.  North, 
13  East,  516. 

6  5  Wend.,  600. 

•  1  Denio,  583. 

7  2  Sand.,  60. 

8  4  John.  R.,  251 ;  7  Wend.,  158. 

•  19  John.  R.,  154. 


CONSIDERATION.  373 

in  the  usual  course  of  trade,  he  is  entitled  to  recover  on 
them,  i  As  between  him  and  the  real  owner,  the  equities  are 
equal,  and  therefore  the  law  in  order  to  facilitate  the  negotia- 
tion of  commercial  paper,  allows  the  holder  who  has  acquired 
it  fairly  in  the  usual  course  of  business,  and  parted  with 
value  for  it,  to  hold  it  even  as  against  the  real  owner.  2  The 
same  rule  applies  in  many  other  cases;  and  may  be  invoked  to 
shut  out  a  defence  founded  on  the  illegality  of  the  considera- 
tion, when  the  instrument  itself  is  not  declared  void,  and  does 
not  carry  on  its  face  notice  of  the  illegality;  to  exclude  evi- 
dence of  a  want  or  failure  of  consideration;  and  to  protect 
the  holder  against  prior  equities  existing  between  the  imme- 
diate parties  to  the  paper.  3  The  object  of  the  law,  as  we 
have  seen,  is  to  secure  the  free  and  unembarrassed  circulation 
of  negotiable  notes  and  bills  of  exchange;  and  the  principle, 
of  protecting  the  bona  fide  holder  of  such  paper  who  has  paid 
value  for  it,  or  who  has  relinquished  some  available  security 
or  valuable  right  on  the  credit  thereof,  is  derived  from  and 
based  upon  a  rule  of  equity.  4  If  the  holder  has  acquired 
the  instrument  without  having  parted  with  value  for  it,  there 
is  no  good  ground  for  excluding  a  defence  interposed  by  the 
parties  to  the  bill  or  note.  5  And  hence  the  law  does  not 
protect  the  innocent  holder  of  negotiable  paper  against  an 
equitable  defence,  unless  he  has  received  it  in  the  usual 
course  of  business,  for  a  valuable  consideration:  it  is  not 
enough  that  it  be  a  valid  consideration,  as  between  the  parties 
to  the  transfer ;  it  must  be  also  valuable.  6 

A  word  as  to  the  consideration  of  accommodation  paper.  It 
is  an  elementary  rule  of  law,  that  the  acceptor  of  a  bill  of 
exchange  stands  in  the  same  relation  to  the  drawer  that  the 
maker  of  a  promissory  note  does  to  the  payee  and  indorsee. 

1  20  John.  R.,  637 

1  Grant  v.  Vaughan,  3  Burr.  1516;  Miller  v.  Race,  1  Burr.  R.,  452. 
» 10  Wend.,  86;  16  Wend.,  659;  12  Wend.,  623;  6  Hill,  93;  4  id.  442. 
4  Per  Chancellor  Walworth,  6  Hill,  96;  4  Comst.  R..  166. 

*  Edwards  v.  Jones,  7  Carr.  and  Payne,  633.    In  this  case   the  holder  had 
given  £49  for  a  note  for  £100,  and  he  was  allowed  to  recover  what  he  had  paid 
for  it. 

•  See  the  authorities  reviewed  in  Stalker  v.  M'Donald,  6  Hill,  93. 


374  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

The  acceptance  is  prima  facie  evidence  of  funds  in  the  hands 
of  the  drawee,  and  payment  discharges  the  obligation  and 
cancels  the  security.  The  bill  has  regularly  performed  its 
office  and  become  null  as  to  all  the  parties;  and  the  drawers 
are  as  fully  discharged  as  the  indorsers  of  a  promissory  note 
would  be  on  payment  by  the  maker,  i 

But  the  presumption  that  the  drawer  has  funds  in  the  hands 
of  the  acceptor  may  be  rebutted.  The  drawee  may  shew  that 
he  accepted  and  paid  the  bill  for  the  accommodation  of  the 
drawer;  and  then,  in  the  absence  of  any  express  stipulation, 
the  law  will  imply  an  undertaking  on  the  part  of  the  drawer 
to  indemnify  the  acceptor.  On  this  implied  obligation  the 
acceptor  may  have  an  action  against  the  drawer,  but  not  on 
the  bill  itself.  2  In  his  action  against  the  drawer  he  declares 
either  specially  on  the  implied  promise  to  indemnify,  or  gen- 
erally for  money  paid,  and  uses  the  bill  only  as  an  item  of 
evidence.  So,  if  one  man  lend  his  own  note  to  another,  and 
is  afterwards  obliged  to  pay  and  take  it  up,  the  law  implies  a 
promise  on  the  part  of  the  borrower  to  indemnify  the  maker; 
though  the  maker  evidently  cannot  sue  the  borrower  on  the 
note  itself.  3 

The  right  of  recovery  in  such  cases  accrues  after  the  surety, 
accommodation  maker  or  indorser  has  paid  the  demand;  but 
it  is  not  necessary  that  the  demand  should  be  paid  in  money, 
for  a  conveyance  of  land  in  discharge  of  the  debt  has  been 
held  equivalent  to  a  payment  in  money;  and  where  a  judg- 
ment has  been  recovered  against  the  accommodation  maker  of 
a  note,  and  satisfied  by  him,  he  is  entitled  to  recover  the 
amount  of  the  judgment,  with  interest,  including  the  costs.  4 
The  plaintiff  in  the  execution  has  the  right  to  exact  pay- 

1  Suydam  v.  Westfall,  2  Denio,  209 ;  3  John.  Gas.,  5;  1  Wils.  185;  3  Terra 
R.,  182;  3  Campb.,  101;  2  Wheat.,  385;  21  Wend..  505. 

a  Young  v.  Hockley,  3  Wils.,  346;  Griffith  v.  Reed,  21  Wend.,  502;  Westfall 
v.  Suydam,  4  Hill,  211 ;  Wing  v.  Terry,  5  Hill,  160.  The  last  three  cases  are 
overruled  in  Suydam  v.  Westfall.  2  Denio,  209,  but  not  on  the  doctrinejstated 
in  the  text. 

8  21  Wend.  R.,  505;  Seely  v.  Bonney,  2  Wend.,  481. 

4 2  Wend.,  481 ;  Ainslee  v.  Wilson,  7  Cowen  R..  668. 


CONSIDERATION.  375 

merit  in  money;  and  where  the  execution  is  satisfied,  it  is  of 
no  consequence  to  the  principal  debtor  that  the  payment  was 
in  fact  made  in  property,  or  money's  worth,  i 

An  accommodation  acceptor  is  at  liberty  to  pay  the  bill  on 
the  last  day  of  grace,  before  business  hours;  and  his  cause  of 
action  against  the  drawer  accrues  immediately  upon  the  pay- 
ment; so  that  if  he  pays  the  bill  by  si*  o'clock  on  the  morning 
of  the  last  day  of  grace,  he  has  a  right  of  action  at  that 
moment  against  the  drawer  for  his  indemnity.  2  The  general 
principle  is  that  the  obligor  in  a  bond,  the  promissor  in  a  note, 
and  the  acceptor  in  a  bill,  is  entitled  to  the  whole  of  the  day 
on  which  they  fall  due,  to  pay  them.  3  But  the  payment  may 
be  lawfully  made  on  any  hour  of  that  day  at  which  the  payer 
and  payee  meet  and  are  willing  to  transact  the  business.  4 

If  an  accommodation  indorser  who  has  been  properly 
charged  with  notice,  takes  up  the  note  indorsed  by  him,  he  is 
entitled  to  recover  the  amount  paid,  against  the  person  for 
whose  accommodation  the  indorsement  was  made;  and  it  is 
not  material  whether  he  pays  the  money  on  it  or  takes  it  up 
by  getting  another  note  made  by  himself  and  indorsed  by 
another,  discounted  in  place  of  it.  5  And  when  the  drawee 
accepts  and  pays  bills  for  the  accommodation  of  the  drawer, 
his  right  of  action  is  not  delayed  by  the  fact  that  he  has  in 
his  hands  a  collateral  security  for  the  payment  of  them.  6 

The  party  for  whose  accommodation  a  note  is  made,  or  in- 
dorsed, or  a  bill  accepted,  is  bound  to  indemnify  the  maker, 
indorser  or  acceptor,  as  the  case  may  be;  and  where  several 
persons  unite  in  drawing  a  bill  of  exchange  in  the  usual  form 
upon  a  person  in  whose  hands  they  have  no  funds,  and  the 
bill  is  accepted  and  paid,  neither  of  them  can  escape  liabi- 

1  Randall  v.  Rich,  11  Mass.  R.,  498. 

1  Whitwell  v.  Brigham,  19  Pick.  R.,  117. 

•  Leftley  v.  Mills,  4  Term  R.,  170;  4  Greenleaf,  479. 
4 19  Pick.,  117,  and  cases  there  cited. 

•  Cornwall  u.  Gould,  4  Pick.,  444;  3  Barb.  R.,  634. 

•  Beckwith  v.  Sibley,  11  Pick.,  482.    The  bills  in  this  case  were  drawn  by 
the  consignor  on  the  consignee,  and  paid;  the  goods  were  sold  on  a  credit,  and 
notes  taken  for  them,  and  the  maker  of  the  notes  had  failed  before  suit  brought. 
What  must  be  shewn  by  a  surety,  in  order  to  entitle  him  to  recover  ?    See 
Sisson  y.  Barrett,  2  Comst.  R.,  406. 


376  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

lity  by  showing  that  he  signed  as  surety  for  the  others  and 
that  the  drawee  knew  the  fact  when  he  accepted  the  bill.  1 
At  least  this  is  the  result  of  the  opinion  delivered  in  the  late 
court  of  errors,  reversing  the  previous  decision  of  the  supreme 
court.  The  action  was  for  money  paid,  and  was  brought  by 
the  drawee  who  accepted  and  paid  without  funds,  against  the 
drawers  on  the  implied  promise  to  indemnify  him  for  so 
doing.  2  One  of  the  drawers,  Westfall,  though  he  did  not  add 
the  word  "  surety  "  to  his  name  on  the  bill,  in  fact  signed  as 
surety  for  the  other  drawers;  and  the  question  was,  for  whose 
accommodation,  that  is,  at  whose  request  did  the  drawee 
accept  and  pay  the  bill  1  The  prevailing  opinion  in  the  court 
of  last  resort  lays  stress  upon  the  form  of  the  bill,  and  upon 
the  fact  that  it  contained  a  request  to  pay  and  charge  gener- 
rally  to  the  account  of  the  drawers,  and  seems  to  make  a  dis- 
tinction between  that  and  a  former  case  where  the  surety 
signed  as  such,  and  the  draft  was  drawn  in  a  different  man- 
ner. 3  The  supreme  court  had  held  that  the  law  would  not 
imply  a  promise  or  obligation  against  the  surety,  in  favor  of 
the  drawee  who  had  accepted  and  paid  without  funds;  that 
the  request  -in  the  draft  for  payment  was  made  by  the  princi- 
pal to  whose  account  the  money  was  to  be  charged;  and  that 
the  undertaking  of  the  surety  was  simply  that  the  bill  should 
be  accepted  and  paid,  and  was  available  only  to  such  persons 
as  should  discount  or  take  the  paper  before  it  became  due.  4 
From  what  has  been  said,  it  is  apparent  that  the  accommo- 
dation acceptor,  maker  or  indorser  of  negotiable  paper  does 
not  accept,  make  or  indorse  without  consideration;  certainly 
not  without  respect  to  the  recompense  or  remedy  which  the 

'J  Suydam  v.  Westfall,  4  Hill,  211;  S.  C.,  2  Denio,  205. 

1  The  draft  was  in  this  form:  "  Messrs.  Suydam,  Sage  &  Co.,  four  months 
after  date,  please  pay  to  the  order  of  C.  A.  Cook,  Esq.,  Cashier,  one  thousand 
dollars,  for  value  received,  and  charge  to  the  account  of  your  obedient  ser- 
vants. Norton,  Bartle  &,  McNeil.  Albert  Westfall." 

s  Griffith  v.  Reed,  21  Wend.,  502.  The  draft  in  question  was  in  this  form: 
"  $2,000.  Three  months  after  date  please  to  pay  to  the  order  of  H.  K.  Sanger, 
Esq.,  Cashier,  two  thousand  dollars,  for  value  received,  and  charge  to  account 
of  your  obedient  servant.  John  Dickson.  John  F.  Reed,  surety." 

4 21  Wend.,  506;  Douglass  v.  Reynolds,  7  Peters,  113. 


CONSIDERATION.  377 

law  furnishes  him  against  the  party  for  whose  benefit  he 
enters  into  the  engagement.  Accurately  speaking,  this  remedy 
is  not  a  legal  consideration  for  an  accommodation  acceptance 
or  indorsement;  but  as  a  matter  of  fact,  it  is  in  most  cases 
the  inducement  and  motive  argument  to  the  party  making  it.  i 
The  object  of  the  acceptance  or  indorsement  is  a  loan  of 
credit  to  the  person  to  be  accommodated,  excluding  the  idea 
of  a  valuable  consideration  received  by  the  party  accepting  or 
indorsing.  To  accomplish  its  object,  the  paper  is  made  capa- 
ble of  negotiation;  and  where  it  is  made  and  delivered  with- 
out any  restriction  as  to  the  mode  in  which  it  is  to  be  used, 
the  parties  to  the  instrument  hold  themselves  out  to  the  pub- 
lic as  the  responsible  makers  and  indorsers  of  the  paper;  so 
that  the  person  taking  it,  whether  for  value  or  in  payment  of 
a  precedent  debt,  is  entitled  to  recover  upon  it.  2  And  courts 
do  not  look  with  favor  upon  a  defence  interposed  to  such 
paper,  where  it  has  answered  the  design  of  the  parties  in  cre- 
ating it.  3 

1  Crofts  v.  Beale,  5  Eng.  Law  and  Eq.  R.,  408.  The  defendant  in  this  case 
who  was  sued  as  the  maker,  by  the  payee  of  a  promissory  note,  pleaded  that 
the  note  was  made  by  him  at  the  request  of  the  plaintiff,  as  collateral  security 
for  a  debt  due  from  one  John  Beale  to  the  plaintiff]  that  he,  the  defendant, 
was  not  liable  te  pay  the  debt,  or  to  give  the  note  as  security,  and  that  there 
was  no  other  consideration  for  the  note;  and  it  was  held  a  good  plea  of  want 
of  consideration  after  verdict. 

*  2  Sand.,  115. 

*  Fitch  v.  Redding,  4  Sand.,  130.     The  able  and  learned  Judge  Duer,  de- 
livered the  opinion  in  this  case,  remarking  that  the  rule  of  law  permitting  a 
defence  to  a  deliberate  and  written  promise,  on  the  ground  of  a  want  of  con- 
sideration, is  almost  peculiar  to  our  own  jurisprudence,  and  is  condemned  by 
the  general  sense  of  legislators  and  jurists,  as  well  as  of  merchants. 


22 


CHAPTER  VII. 

CONTRACT  OF  THE  DRAWER— PRESENTMENT  FOR,  AND 
ACCEPTANCE  OF  13ILLS. 

I.  CONTRACT  OF  THE  DRAWER. 

Where  the  drawer  of  a  draft  adds  to  his  signature  the  word 
agent,  and  the  payee  knows  for  whom  he  acts,  the  drawer  is 
not  responsible  thereon  personally  to  the  payee;  provided  he 
is  duly  authorized  by  his  principal  to  draw  the  draft,  i  By 
adding  the  word  agent  to  his  name,  where  he  acts  with 
authority  for  another,  the  drawer  gives  notice  that  he  does 
not  mean  to  make  himself  personally  liable.  2  But  where 
the  person  drawing  a  draft  or  signing  a  note  does  not  act  for 
and  bind  his  principal,  it  is  not  material  what  words  are  added 
to  his  name — he  binds  himself.  Thus,  where  the  maker  of  a 
note  added  under  his  name  these  words,  "  agent  for  the  Church- 
man," it  was  held  the  note  of  the  party  signing  it.  3 

The  drawing  and  negotiation  of  a  bill  of  exchange  implies, 
as  we  have  seen,  an  undertaking  from  the  drawer  to  the  payee, 
and  to  every  other  person  to  whom  the  bill  may  afterwards  be 
transfered,  that  the  drawee  is  a  person  capable  of  accepting 
the  bill  and  making  himself  responsible  for  its  payment;  that 
he  shall  if  applied  to  for  that  purpose  express  in  writing  upon 
the  bill  an  undertaking  to  pay  it  when  it  shall  become  payable; 
that  he  shall  pay  it  on  presentment  for  that  purpose  when  it 
becomes  payable;  and  that  if  the  drawee  fail  to  do  either, he, 
the  drawer  will  pay  the  amount  stated  in  the  bill  with  legal 

1  Hicks  v.  Hinde,  9  Barb.  R.,  528. 

"Conrov.  Port  Henry  Iron  Co.,  12  Barb.  R.,  27,  |54;  see  also  Walker  v. 
The  Bank  of  the  State  of  New-York,  5  Selden,  582. 
8  De  Witt  v.  Walton,  5  Selden,  571. 


CONTRACT   OF   THE   DRAWEE .  379 

damages  thereon,  provided  he  have  due  notice  of  the  dis- 
honor, i  The  original  theory  of  the  bill  is,  that  the  drawer 
has  money  in  the  hands  of  the  drawee,  and  directs  it  to  be 
paid  over  to  the  payee  or  to  his  order.  2  Assuming  this  to  be 
the  true  relation  of  the  parties,  the  law  implies  only  a  condi- 
tional contract  on  the  part  of  the  drawer;  namely,  that  in  case 
the  bill  is  dishonored,  he  will  pay  it  himself,  on  being  duly 
notified  that  the  drawee  refuses  to  accept,  or  fails  to  pay  the 
bill  at  its  maturity.  3  Having  funds  in  the  possession  of  the 
person  on  whom  he  draws,  or  what  is  the  same  thing,  a  right 
by  agreement  to  draw  upon  him,  he  expects  with  good  reason 
that  his  bill  will  be  duly  honored ;  and  the  law  presumes  that 
he  will  act  accordingly,  upon  the  understanding  that  it  has 
been  accepted  and  paid.  On  this  account  he  has  a  right 
to  prompt  notice  of  the  non-acceptance  or  non-payment  of  his 
bill,  so  that  he  may  take  immediate  measures  for  his  own 
security.  4 

Where  an  order  is  drawn  for  the  whole  of  a  particular 
fund,  it  amounts  to  an  equitable  assignment  of  that  fund,  and 
will  after  notice  to  the  drawee  bind  the  fund  in  his  hands.  5 
But  a  bill  of  exchange  drawn  in  the  ordinary  form,  against  a 
consignment  of  goods,  does  not  operate  as  an  equitable  assign- 
ment of  the  proceeds  thereof:  it  is  not  in  the  nature  of  an 
order  drawn  on  a  particular  fund,  and  is  not  payable  upon 
any  contingency.  6  When  so  drawn  that  it  operates  as  an 
equitable  assignment  of  funds  in  the  hand  of  the  drawee,  it 
no  longer  possesses  all  the  characteristics  of  a  bill  of  exchange; 

1  Bayley  on  Bills,  ch.  1,  §  13;  Chitty  on  Bills,  193;  Story  on  Bills,  §107; 
Wing  v.  Terry,  6  Hill  R.,  160. 

*  Commercial  Bank  of  Albany  v.  Hughes,  17  Wend.,  94;  4 'Mason,  113;  2 
H.  Black.,  836;  5  Mass.,  170;  7  Wend.,  168. 

1  It  is  sometimes  said  that  the  drawer  and  indorser  are  presumed  to  stipulate 
for  notice  of  non-acceptance  or  non-payment.  Ogden  v.  Saunders,  12  Wheat. 
R.,  213. 

4  Idem,  and  17  Wend.,  101;  12  Wend.  R.,  439. 

'  •  Mandeville  v.  Welch,  5  Wheat.,  277;  1  Hill  R.,  82;  Vreeland  v.  Blunt,  6 
Barb.  R.,  182;  1  Hill  R.,  583;  6  Paige  Ch.  R.,  632;  McMenomy  v.  Ferrers,  3 
John.  R.,  72. 

4  Cowperthwait  v.  Sheffield,  1  Sand.  R.,  416;  S.  C.,  3  Corast.,  243. 


380  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

for,  being  negotiated  in  that  form,  it  carries  information  upon 
its  face  making  it  dependent  upon  a  special  fund.  1  Hence, 
it  is  not  necessary  that  an  order  of  this  kind  should  be  form- 
ally accepted  as  a  bill  of  exchange;  2  being  itself  an  equitable 
assignment  of  the  fund  on  which  it  is  drawn,  that  takes  effect 
as  soon  as  the  drawee  is  notified  of  it. 

The  tenor  of  the  instrument  determines  whether  it  is  to  be 
considered  as  a  bill  of  exchange,  or  an  appropriation  of  an 
existing  or  accruing  fund  which  operates  as  an  equitable 
assignment.  The  intention  of  the  parties  not  expressed  in  the 
draft,  will  not  follow  the  instrument  so  as  to  diminish  or  qual- 
ify the  rights  of  a  bona  fide  holder;  but  if  a  principal  debtor 
provides,  in  the  hands  of  his  surety,  a  fund  to  pay  a  given 
debt  evidenced  by  a  bill  of  exchange,  the  creditor  is  entitled 
to  have  such  fund  applied  in  payment  of  that  debt.  3  But 
this  is  on  a  ground  of  equity,  and  not  on  the  principle  that 
parol  evidence  can  be  introduced  to  vary  the  terms  of  the 
contract  expressed  in  the  bill,  or  implied  by  law  from  its 
terms.  4 

Mr.  Chitty,  stating  the  substance  of  the  contract  implied  by 
law  on  the  part  of  the  drawer  to  the  payee  and  to  every  sub- 
sequent holder,  says  that  the  drawer  stipulates  that  the  drawee 
is  to  be  found  at  the  place  where  he  is  described  to  reside,  if 
that  description  be  mentioned  in  the  bill.  5  By  addressing  a 
bill  to  the  drawee  at  a  particular  place,  naming  the  number 
of  the  street  and  the  city  of  his  residence,  the  drawer  certainly 
asserts,  if  he  does  not  stipulate,  that  the  drawee  is  to  be  found 
there,  and  it  would  be  clearly  unreasonable  to  permit  him 
afterwards  to  raise  the  objection  that  that  was  not  the  proper 

1  Luffe  v.  Pope,  6  Hill  R.,  413;  S.  C.,  7  Hill,  577;  Harrison  v.  Williamson, 
2  Edw.  Rep.,  430. 

a  Morton  v.  Naylor,  1  Hill  R.,  583;  1  H.  Black.,  239,  242;  12  John.  R.,  279, 
289;  3  Paige,  373;  5  id.  632,  641. 

3  The  Marine  and  Fire  Ins.  Bank  of  Georgia  v.  Jauncey.  1  Barb.  R.,  486;  9 
Paige  Ch.  R.,  434;  6  Barb.  R.,  182. 

47CowenR.,249;  1   Hill,  116;  17  Wend.,  190;  5Denio,  514;  8  John  R./ 
190,  375;  1  Denio,  400;  13  John.  R.,  238. 

6  Chitty  on  Bills,  192. 


CONTRACT   OF  THE  DRAWER.  381 

place  to  present  the  bill  for  acceptance  or  for  payment,  i  But 
the  time  for  presenting  a  bill  for  acceptance  not  being  pre- 
scribed by  a  fixed  and  rigid  rule,  the  holder  has  an  opportunity 
to  make  full  inquiry  for  the  person  to  whom  the  bill  is  ad- 
dressed; and  in  case  he  has  removed,  it  was  formerly  held  to 
be  incumbent  upon  the  holder  to  endeavor  to  ascertain  to  what 
place  he  has  removed,  and  to  make  the  presentment  there.  2 
It  is  agreed,  however,  that  if  the  drawee  cannot  be  found  at 
the  place  where  the  bill  states  him  to  reside,  and  it  appears 
that  he  never  lived  there,  or  has  absconded,  or  the  house  be 
shut  up  and  no  one  there,  the  bill  is  to  be  considered  as  dis- 
honored. 3  And  where  the  bill  is  addressed  to  the  drawee  at 
a  particular  place,  and  he  cannot  be  found  there  in  business 
hours,  there  is  no  reason  for  saying  that  the  holder  is  bound 
to  follow  him  and  demand  acceptance  or  payment  in  a  different 
and  perhaps  distant  place.  4 

The  drawer  engages  that  the  drawee  is  capable  of  accepting 
the  bill  and  binding  himself  for  its  payment,  and  that  he  will 
pay  it  on  its  becoming  due.  The  scope  of  his  engagement  is 
such  as  to  make  him  answerable  without  any  regard  to  the 
nature  of  the  obstacle  that  may  lie  in  the  way  of  acceptance 
or  payment  of  the  bill.  Thus,  a  bill  was  drawn  in  London 
upon  Paris,  and  negotiated  through  Holland;  before  it  became 
due,  the  French  government  prohibited  the  payment  of  any 
bill  drawn  in  England,  in  consequence  of  which  it  was  dis- 
honored, and  sent  back  through  the  different  hands  by  which 
it  had  been  negotiated,  to  London;  and  the  drawer  was  held 

1  De  Wolf  v.  Murray,  2  Sand.  R.,  166;  Cayuga  Co.  Bank  v.  Hunt,  2  Hill 
R.,  365;  Wilkins  v.  Jadis,  2  Barn,  and  Adol.,  188. 

*  Collins  v.  Butler,  2  Stra.,  1087;  Bateman  v.  Joseph,  12  East,  483.    Mr. 
Justice  Story  states  the  rule  in  the  same  manner.    Story  on  Bills,  §  236;  3 
Campb.,262;  2  id.  461. 

*  Lord  Raym.,  743;  Hine  v.  Alleby,  4  Barn,  and  Adol.,  624;  2  id.  188. 

4  2  Sand.  R.,  166.  In  this  case,  the  bill  was  addressed  to  H.  O.  Collard, 
No.  18,  Chapel  Walks,  Liverpool,  and  was  presented  there  for  payment  by  the 
notary,  who  found  the  office  door  closed  and  no  person  there  to  give  an  answer 
respecting  the  bill ;  held  a  good  presentment  of  the  bill  to  charge  the  indorser. 
4  Barn,  and  Adol.,  624;  7  Barb.  R.,  623;  8  John.  R.,  202,  210;  18  Barb.  R., 
290. 


382  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

liable  for  the  whole  amount  of  the  re-exchange  between  the 
different  countries.  Buller  J.  "  What  is  the  engagement  of 
the  drawer  of  a  bill  of  exchange  ?  He  undertakes  that  the 
bill  shall  be  paid  when  due.  If  it  be  not  paid,  it  is  not  neces- 
sary for  the  holder  to  enquire  for  what  reason  it  is  not  paid, 
and  if  the  holder  has  been  guilty  of  no  default,  the  drawer  is 
answerable  for  the  amount  of  the  bill;  and  if  he  is  liable  for 
the  amount  of  the  bill,  he  must  also  be  liable  for  the  re-ex- 
change, which  is  a  consequence  of  the  bill  not  being  paid."  1 
The  rule  is  different  where  the  law  of  the  country  in  which 
the  drawer  has  his  domicil  interposes  and  forbids  the  perform- 
ance of  the  contract,  for  the  courts  of  a  state  cannot  carry 
into  effect  an  engagement  which  the  law  of  that  state  forbids, 
nor  can  they  enforce  it  in  an  illegal  manner.  2 

When  the  place  of  payment  is  specified  in  a  bill,  it  is  a 
material  part  of  the  drawer's  contract  that  the  payment  shall 
be  made  at  the  place  designated;  and  on  a  failure  in  this 
respect  he  is  answerable  for  the  damages.  3 

The  drawer  contracts  with  the  payee  and  with  every  subse- 
quent holder,  that  the  drawee  will  accept  the  bill  when  duly 
presented  for  that  purpose.  Accordingly,  where  a  bill  drawn 
payable  a  certain  number  of  days  after  sight,  is  presented  for 
acceptance  and  dishonored,  the  holder,  giving  proper -notice  of 
the  non-acceptance,  has  an  immediate  right  of  action  thereon 
against  the  drawer.  4  The  giving  of  the  bill  is  not  simply  an 
agreement  that  it  shall  be  paid  at  maturity;  it  is  also  an 
undertaking  that  it  shall  be  honored  and  thus  made  capable 
of  negotiation  as  accredited  paper. 

Moreover,  this  contract  on  the  part  of  the  drawer  is  an 
undertaking  that  the  drawee  shall  accept  unconditionally 

5  Mellish  v.  Simeon,  2  H.  Black.,  378.  The  bill  was  drawn  in  July,  1793, 
pending  the  first  French  revolution. 

2  Pollard  v.  Herries,  3  Bos.  and  Pull.,  340. 

8  2  H.  Black.,  378;  3  Bos.  and  Pull.,  340;  3  John.  R.;  202,  208;  12  John. 
R.,  17;  ISand.  R.,  416. 

4  Ballingalls  v.  Gloster,  3  East.  R.,  481;  Milford  T.  Meyor,  Domgl.,  64 j 
Mason  v.  Franklin,  3  John.  R.,  202;  2  Hill  R.,  227. 


CONTRACT    OF   THE   DRAWER.  383 

according  to  the  tenor  of  the  bill,  i  Any  thing  less  than  this 
the  holder  is  not  bound  to  take;  for  he  is  entitled  to  require 
from  the  drawee  an  absolute  engagement  to  pay  in  money 
according  to  the  terms  of  the  bill,  unincumbered  with  any 
condition  or  qualification.  2  The  holder  may  if  he  choose 
take  from  the  drawee  either  a  conditional  or  a  qualified  accep- 
tance; but  he  cannot  thereby  introduce  into  the  contract  of 
the  drawer  any  new  condition  or  qualification  whatever. 
His  engagement  as  implied  by  law  makes  him  responsible  for 
the  payment  of  the  bill  on  certain  conditions  precedent;  and 
if  those  conditions  are  not  complied  with,  he  is  discharged. 
If  therefore  the  holder  take  from  the  drawee  an  acceptance 
extending  the  time  of  payment,  or  altering  the  place  of  pay- 
ment, the  drawer  cannot  be  held  liable  on  the  bill,  unless  he 
consents  to  the  change  or  qualification  so  made.  3  For  instance, 
if  a  bill  be  drawn  on  a  person  residing  in  the  city  of  New- 
York,  without  stating  any  place  of  payment,  and  accepted  by 
him  payable  at  a  banking  house  in  Buffalo,  or  Boston,  the 
acceptance  is  not  according  to  the  tenor  of  the  bill;  for  if 
accepted  generally,  as  drawn,  it  would  be  presentable  for 
payment  at  the  place  of  business  or  residence  of  the  drawee 
in  New- York,  and  a  change  in  the  place  of  payment  may 
operate  to  the  prejudice  of  the  drawer,  by  delaying  the  pay- 
ment or  preventing  so  early  a  notice  of  non-payment  as  might 
have  been  received  from  the  town  on  which  the  bill  was 
drawn.  But  there  is  not  the  same,  nor  indeed  any  objection 
to  an  acceptance  making  the  bill  payable  at  a  bank  or  broker's 
office  in  the  city  where  the  acceptor  resides;  for  no  prejudice 
can  possibly  arise  to  the  drawer  from  the  holder's  taking  an 
acceptance  which  changes  the  place  of  payment  from  the 

1  Walker  v.  The  Bank  of  the  State  of  N.  York,  13  Barb.  R  ,  636.  In  this 
case  the  bill  was  drawn  for  the  payment  of  five  thousand  dollars,  five  months 
after  date,  and  addressed  to  E.  C.  Hamilton,  and  the  acceptance  was  as  fol- 
lows :  "  Accepted  payable  at  Am.  Ex.  Bank,  Clayville  Mills,  by  E.  C.  Hamil- 
ton, Treas."  Held  insufficient,  in  an  action  against  the  defendant  for  neg- 
ligence in  not  giving  notice  of  non-acceptance,  the  same  not  being  according  to 
the  tenor  of  the  bill.  S.  C.  6  Seld.,  582. 

s  Byles  on  Bills,  149. 

1  Rowe  T.  Young,  2  Brod.  and  Bing.,  1C5. 


384  BILLS    OF  EXCHANGE   AND   PROMISSORY  NOTES. 

acceptor's  counting-house  to  the  house  of  his  banker  in  the 
same  town.  1 

The  indorser  is  considered  in  almost  every  respect  as  a  new 
drawer;  and  the  nature  and  extent  of  the  liabilities  incurred 
by  each  are,  as  we  have  seen,  determined  by  the  law  of  the 
place  where  the  bill  is  drawn  or  the  indorsement  made.  2 

The  contract  of  both  the  drawer  and  indorser  is  implied  by 
law,  but  it  is  absolute  in  its  terms  and  conditions;  and  cannot 
be  modified  by  any  act  of  theirs,  any  more  than  a  contract  of 
a  different  kind  can  be  changed  by  the  act  or  volition  of  only 
one  of  the  contracting  parties.  But  the  obligations  assumed 
by  the  drawer  may  be  discharged  or  released  by  the  laches  or 
neglect  of  the  holder;  for  where  a  party  takes  a  negotiable 
security,  he  takes  it  subject  to  the  principles  of  the  law  inci- 
dent to  the  paper.  3  If  the  bill  be  drawn  payable  at  sight,  or 
a  certain  number  of  days  after  sight,  the  law  implies  a  duty 
on  the  part  of  the  holder  to  use  diligence  in  presenting  the 
same  for  acceptance,  in  order  that  the  period  may  commence 
from  which  the  payment  is  to  take  place.  4  And  though  the 
law  does  not  prescribe  any  fixed  time  within  which  such  a 

1  In  Rowe  v.  Young,  cited  above,  a  bill  of  exchange  was  drawn  by  a  person 
at  Gosport,  upon  a  person  at  Torpoint,  requiring  him  in  general  terms  to  pay 
at  two  months  after  date  a  certain  sum  of  money  to  the  order  of  the  drawer, 
and  the  drawee  accepted  the  bill  payable  at  a  banking  house  in  London ;  and 
it  was  held  necessary  for  the  holder  to  aver  and  prove  a  presentment  for  pay- 
ment at  the  banking  house  in  London.  The  case  being  carried  to  the  House 
of  Lords,  one  of  the  questions  presented  to  the  twelve  judges  was  this : 
"  Whether,  if  A  draw  a  bill  upon  B  in  favor  of  C,  for  100/j  and  C,  without 
the  previous  authority  or  subsequent  assent  of  A,  take  an  acceptance  of  the 
bill  for  the  whole  amount  of  the  100/.  but  an  acceptance  qualified  as  to  the 
time  or  place  of  payment ;  C  could,  notwithstanding  his  taking  such  acceptance, 
maintain  an  action  upon  the  bill  against  A  ?•''  And  the  general  opinion  was 
that  the  action  could  not  be  sustained.  By  way  of  illustration  one  of  the 
judges  puts  the  case  of  a  bill  drawn  in  general  terms  upon  a  banking  house  in 
London,  and  by  them  accepted  payable  at  Dublin  or  Amsterdam,  and  says  it 
would  certainly  discharge  the  drawer  if  taken  without  his  assent.  And  Mr. 
Justice  Best  says  plainly  that  a  qualified  acceptance,  making  the  bill  payable 
at  another  town,  without  the  assent  of  the  drawer,  will  discharge  the  drawer. 

4  Aymar  v.  Sheldon,  12  Wend.  R.,  439. 

3  Chitty  on  Bills,  194. 

4  Muiliman  v.  D'  Eguino,  2  H.  Black.,  565;  Robinson  v.  Ames,  20  John.  R., 


CONTRACT    OF   THE   DRAWER.  386 

bill  must  be  presented,  it  does  make  the  holder  responsible 
for  laches  in  not  presenting  the  bill  for  acceptance  within 
a  reasonable  time,  or  not  putting  it  in  circulation,  i  In  this 
respect  also,  the  engagement  of  the  drawer  is,  like  that  of  a 
surety,  conditional  in  its  nature;  for  laches  or  negligence  in  a 
creditor  do  not  operate  to  discharge  an  unconditional  obliga- 
tion to  pay  a  given  debt.  2 

We  shall  see,  as  we  proceed,  under  what  circumstances  the 
drawer  is  discharged  or  released,  on  account  of  the  negligence 
or  default  of  the  payee  or  holder  of  the  bill.  But  in  this  con- 
nection, it  is  proper  to  state  that  the  contract  of  the  drawer  is 
not  only  raised  and  determined  by  the  law  of  the  place  where 
it  is  made,  but  is  also  discharged  by  the  same  law.  If  a  per- 
son draws  a  bill  of  exchange  in  Louisiana,  and  is  afterwards 
discharged  from  his  debts  as  an  insolvent  debtor  under  the 
laws  of  that  state,  the  discharge  operates  according  to  the 
lex  /oct,  upon  the  contract  of  the  drawer.  3 

This  statement  must,  however,  be  taken  with  a  qualification : 
if  the  parties  to  the  bill  reside  in  the  same  state,  the  discharge 
of  the  drawer  under  the  insolvent  law  of  the  state  pronounces 
his  release  from  the  contract;  not  so  where  the  payee  or  holder 
of  the  bill  is  a  resident  of  another  state.  In  respect  to  resi- 
dents of  the  state,  they  are  presumed  to  stipulate  with  refer- 
ence to  the  existing  law,  and  cannot  therefore  claim  that  the 
law  involves  a  violation  of  the  obligation  of  the  contract; 
while  in  respect  to  citizens  and  residents  of  other  states,  the 
same  presumption  does  not  arise.  Thus,  where  a  resident  of 
Kentucky  drew  a  bill  of  exchange  on  Ogden  of  New- York, 
who  accepted  the  bill  at  his  residence  and  was  afterwards 

1  Gowan  v.  Jackson,  20  John.  R.,  176.  A  foreign  bill  payable  ninety  days 
after  sight,  circulated  through  several  hands,  was  held  properly  presented  six 
months  after  date. 

1  2  Wheaton,  385;  9  Mass.  R.,  60;  4  Dana  R.,  352;  7  Wend.,  227;  Green 
v.  Goings,  7  Barb.  R.,  652.  The  defendant  who  has  accepted  a  bill  payable  at 
a  particular  bank,  is  liable  without  any  demand;  but  he  may  defeat  a  suit  by 
shewing  that  he  was  at  the  place,  ready  to  pay. 

'Smith  v.  Smith,  2  John.  R.,  242;  Hicks  v.  Brown,  12  John.  R.,  142;  Potter 
v.  Brown,  6  East,  131;  3  Mass.  R.,  81;  6  Cranch,  221;  12  Wend.,  443;  6 
Conn.,  480;  2  Blackf.,  394. 


386  BILLS  OF   EXCHANGE  AND   PROMISSORY  NOTES. 

discharged  as  an  insolvent  debtor,  under  the  laws  of  this  state? 
the  Supreme  Court  of  the  United  States  decided  that  such 
discharge  did  not  operate  to  release  him  from  this  debt  due  to 
the  citizen  of  another  state,  though  the  contract  was  made 
here.  The  law  of  the  state  has  no  extra-territorial  operation,  i 
So,  where  a  bill  was  drawn  in  Maine  in  favor  of  a  citizen  of 
that  state,  upon  and  accepted  by  a  citizen  of  Massachusetts, 
it  was  held  that  a  discharge  of  the  acceptor,  under  the  insol- 
vent laws  of  Massachusetts,  was  not  a  bar  to  an  action  against 
him  by  the  payee,  who  had  not  proved  his  claim  thereon 
against  the  insolvent's  estate.  2  But  it  has  been  held  in  this 
state  that  where  the  holder  of  such  a  bill  comes  in  and  proves 
his  claim  and  accepts  a  dividend  from  the  insolvent's  estate, 
he  becomes  a  party  to  the  proceedings,  which  thereupon 
operate  as  a  discharge  of  the  debt.  3  It  is  easy  to  apply  the 
principle  of  these  cases  to  the  contract  of  the  drawer. 

II.  PRESENTMENT  FOR  ACCEPTANCE. 

The  form  of  a  bill  of  exchange  and  the  nature  of  the 
undertaking  entered  into  by  the  drawer  and  indorser  of  it, 
shew  plainly  that  the  holder  of  the  bill  has  an  interest  in 
having  it  presented  for  acceptance  without  any  unreasonable 
delay.  If  it  be  drawn  payable  at  sight,  or  a  certain  number 
of  days  or  months  after  sight,  or  after  demand,  the  present- 

1  Ogden  v.  Saunders,  12  Wheat.,  213;  6  Peters,  348,  642;  Van  Hook  v. 
"Whitlock,  26  Wend.,  63;  11  Barb.  R:,  558.  The  contract  of  acceptance  is 
made  in  such  cases  where  the  bill  is  accepted.  Wilde  v.  Sheridan,  11  Eng. 
Law  andEq.  R.,  380;  Barker  v.  Sterne,  25  id.  502. 

The  contract  of  drawer  and  indorser  being  very  nearly  the  same  thing,  it  is 
proper  to  mention  here  the  case  of  Moore  v.  Cross  and  McGervey,  the  report 
of  which  has  just  appeared,  23  Barb.  R.,  584.  The  plaintiff  sold  McGervey  a 
quantity  of  coal,  on  condition  the  latter  should  give  therefor  notes  indorsed  by 
Cross,  and  the  notes  were  drawn  payable  to  the  plaintiff,  James  Moore,  or 
order,  and  indorsed  by  Cross,  in  blank,  and  then  delivered  by  McGervey  to 
the  plaintiff  for  the  coal ;  the  coal  being  sold  on  the  strength  of  Cross's  indorse- 
ment. And  the  plaintiff  was  allowed  to  recover  on  a  complaint  setting  forth 
the  facts,  and  alleging  the  usual  demand  and  notice  of  dishonor. 

a  Fisher  v.  Foster,  10  Mete.,  597. 

3  Gardner  v.  Oliver  Lee  Bank,  11  Barb.  R.  558;  Clay,  v.  Smith,  3  Peters, 
411. 


PHESENTMENT    FOB   ACCEPTAKCX.  387 

ment  is  necessary  in  order  to  fix  the  time  when  it  shall  become 
payable;  and  the  law,  not  deeming  it  wise  or  equitable  to 
prescribe  a  fixed  period  within  which  such  a  bill  is  to  be 
presented  for  acceptance,  so  as  to  charge  the  drawer  and 
indorsers,  declares  briefly  that  it  must  be  presented  within  a 
reasonable  time,  and  leaves  it  to  the  court  to  determine  what 
is  reasonable  time  under  the  circumstances  of  each  particular 
case,  i  When  the  bill  is  drawn  payable  a  specified  length  of 
time  after  date,  or  on  a  day  certain,  it  is  well  settled  that  the 
holder  need  not,  for  the  purpose  of  charging  the  drawer  and 
indorsers,  present  it  for  acceptance  until  it  becomes  due  and 
payable.  2  Nevertheless,  it  is  expedient  for  the  owner  of  the 
bill  to  have  it  presented  at  an  early  day  for  acceptance;  for  if 
accepted,  he  acquires  thereby  the  additional  security  of  the 
acceptor;  and  if  the  drawee  refuses  to  accept,  recourse  may 
be  had  immediately  to  the  drawer  and  indorsers  for  payment.  3 
When  a  bill  is  drawn  payable  a  specified  time  after  sight 
or  after  demand,  the  holder  acting  within  the  rule  that 
requires  him  to  use  diligence  in  presenting  the  same  for 
acceptance,  has  a  right  to  make  the  time  from  which  payment 
is  to  be  made  commence  when  he  pleases.  On  the  face  of  the 
bill  it  is  apparently  left  entirely  to  his  option  to  make  the 
presentment  soon  or  late :  and  it  is  only  by  considering  the 
nature  of  the  instrument  and  the  relation  in  which  the  several 
parties  stand  to  each  other,  that  we  perceive  the  reason  of  the 

1  Aymar  v.  Beers,  7  Cowen  R.,  705;  Sice  v.  Cunningham,  1  id.  397;  20  John. 
R.,  146;  Field  v.  Nickerson,  13  Mass.  R.,  131;  Mullick  v.  Radakisson,  28  Eng. 
Law  and  Eq.  R.,  86.  The  law  does  not  fix  a  time  for' presentment  of  bills  for 
acceptance,  where  they  are  drawn  payable  on  or  after  sight;  the  rule  in  such 
case  is,  where  there  is  no  usage  of  trade,  that  the  bill  must  be  presented  within 
a  reasonable  time,  which  is  a  mixed  question  of  law  and  fact,  to  be  determined 
by  the  jury  with  the  assistance  of  the  judge.  In  doing  so,  the  interest  of  both 
the  holder  and  drawee  is  to  be  considered.  But  these  rules  in  relation  to  bill* 
do  not  apply  to  banker's  checks,  which  are  peculiar  instruments. 

*  Allen  v.  Suydam,  20  Wend.,  321  j  S.  C.,  17  id.  868. 

•  3  John.  R.,  202;  3  East,  481 ;  Dougt.,  64.    If  the  holder  present  the  bill 
for  acceptance,  though  not  bound  to  do  so,  he  must  give  notice  of  the  non- 
acceptance  to  the  drawer  and  indorser,  without  delay.    Townaley  T.  Sumrall, 
2  Peters  R.,  170;  Goodall  y.  Dolley  1  Term  R.,  712. 


388  BILLS   OF  EXCHANGE  AND  PROMISSORY  NOTES. 

rule  qualifying  the  discretion  of  the  holder  in  this  respect.  1 
Lord  Mansfield,  in  a  leading  case,  says  :  "  a  bill  of  exchange 
is  an  order  or  command  to  the  drawee  who  has,  or  is  supposed 
to  have  effects  of  the  drawer  in  his  hands,  to  pay.  When  the 
drawee  has  accepted,  lie  is  the  original  debtor;  and  due  diligence 
must  be  used  in  applying  to  him.  The  drawer  is  only  liable 
in  default  of  payment  by  him,  due  diligence  having  been 
used :  and  therefore  if  the  acceptor  is  not  called  upon  within 
a  reasonable  time  after  the  bill  is  payable,  and  happens  to 
break,  the  drawer  is  not  responsible  at  all."  2  What  is  here 
said  with  reference  to  the  duty  of  the  holder  in  making  a 
demand  of  payment  applies  equally  to  the  duty  of  making  a 
presentment  for  acceptance,  where  that  is  necessary,  to  the 
end  that  the  time  within  which  payment  is  to  be  made  may 
commence  to  run. 

In  regard  to  foreign  bills,  it  is  sufficiently  evident  that 
what  would  be  reasonable  time  in  one  case  would  be  entirely 
inadequate  in  another.  Thus,  a  bill  drawn  in  Antigua,  one 
of  the  West  India  islands,  upon  a  merchant  residing  in  Lon- 
don would  require  time  for  transmission,  and  that  again 
would  depend  upon  the  regularity  and  frequency  of  the  estab- 
lished communication  between  the  two  places ;  so  that  if  put 
into  circulation  and  negotiated  through  several  hands,  a  delay 
of  six  months  in  presenting  the  bill  for  acceptance  would  not 
be  unreasonable.  3  So,  a  bill  drawn  in  London  on  Calcutta, 
and  purchased  at  the  exchange  for  a  firm  in  Paris,  requires 
not  only  time  for  transmission  to  India,  but  also  time  for  a 
previous  communication  between  London  and  Paris;  so  that  if 
the  main  voyage  cannot  be  accomplished  short  of  about  six 
months,  a  delay  of  eight  months  in  presenting  the  bill  for 
acceptance  would  not  be  unreasonable,  although  it  yas  not 

'Muilman  v.  D'  Eguino,  2  H.  Black,,  565.  This  case  holds  that  the  pur- 
chaser of  a  foreign,  i.  e.,  a  bill  drawn  on  Calcutta,  payable  after  sight,  is  not 
bound  to  send  it  out  by  the  earliest  opportunity.  He  must  use  diligence  and 
present  it  within  a  reasonable  time ;  what  is  reasonable  time  is  a  question  for 
the  jury. 

2  Heylyn  v.  Adamson,  2  Burr.  669. 

1  So  held  in  Gowan  y.  Jackson,  20  John.  R.,  176. 


PRESENTMENT    FOR   ACCEPTANCE.  389 

transmitted  by  the  first  opportunity  to  the  place  of  its  destina- 
tion, i  Take  another  illustration  :  a  bill  is  drawn  at  Augusta 
in  the  state  of  Georgia  upon  merchants  residing  in  the  city  of 
New-5fork,  payable  sixty  days  after  sight:  the  mail  passes 
from  one  place  to  the  other  in  ten  days,  leaving  the  former 
place  three  times  a  week;  and  the  usual  course  of  business  is 
to  send  the  bill  by  one  mail  and  advice  by  the  next;  the 
payee  transfers  the  bill,  putting  it  into  circulation;  and  though 
it  is  not  presented  for  acceptance  until  seventy-five  days  after 
it  is  drawn,  it  has  been  adjudged  that  this  is  not  an  unreason- 
able delay.  2 

When  a  bill  payable  after  sight  is  negotiated,  and  kept  in 
circulation  from  hand  to  hand,  the  courts  have  been  very 
cautious  not  to  fix  any  precise  time  within  which  it  must  be 
presented  for  acceptance.  Negotiation  is  the  purpose  and 
nature  of  the  bill,  and  if  it  take  the  ordinary  and  natural 
course  of  negotiable  paper,  the  drawer  cannot  complain  that 
it  goes  by  a  circuit  which  he  did  not  contemplate.  If,  for 
example,  a  bill  be  drawn  in  London  on  a  merchant  in  Lisbon, 
payable  thirty  days  after  sight,  and  negotiated  through  France 
and  Italy,  so  that  it  is  more  than  three  months  on  its  journey 
before  it  arrives  and  is  presented  for  acceptance,  the  drawer 
is  not  discharged,  though  the  drawee  may  have  failed  in  the 
meantime;  for  the  bill  has  followed  and  obeyed  the  law  of 
negotiable  paper.  3 

Where  a  bill  payable  after  sight  is  not  negotiated  or  put 
into  circulation,  the  rule  requiring  it  to  be  presented  for 
acceptance,  is  stated  in  the  same  terms;  it  must  be  presented 
within  a  reasonable  time.  But  the  time  which  would  be  rea- 
sonable in  the  case  of  a  negotiated  bill  would  be  quite  unrea- 
sonable in  the  case  of  one  that  has  not  been  transfered.  4  The 

1  So  decided  in  Muilman  v.  D>  Eguino,  the  bill  being  payable  sixty  days  after 
sight.  2  H.  Black.,  565. 

*  7  Robinson  v.  Ames,  20  John.  R.,  146.  It  was  shewn  in  this  case  that  the 
first  mail  leaving  Augusta,  after  the  bill  was  drawn,  was  lost;  but  it  was  not 
shewn  that  the  first  of  exchange  was  sent  by  that  mall. 

1  Goupy  v.  Harden,  7  Taunt.  R.,  159;  2  Com.  Law  R^  58. 

4  Fry  v.  Hill,  7  Taunt.,  39?. 


390  BILLS   OF   EXCHANGE  AND  PROMISSORY    NOTES. 

payee  of  the  bill,  where  he  does  not  negotiate  it,  is  not  bound 
to  present  it  immediately  for  acceptance;  neither  is  he  at 
liberty  to  lock  it  up  for  an  indefinite  length  of  time,  i  A 
delay  of  two  months  beyond  the  time  within  which  the  pre- 
sentment might  have  been  made,  unexplained,  is  sufficient 
evidence  of  negligence.  2  A  delay  of  four  days  is  not  suffi- 
cient evidence  of  laches,  even  where  no  explanation  is  given 
and  the  drawee  fails  on  the  morning  of  the  day  on  which  the 
bill  is  presented.  3  There  is  a  close  analogy  between  a  bill 
payable  a  given  number  of  days  after  sight,  and  a  promissory 
note  payable  on  demand,  so  far  as  respects  the  use  of  due  dili- 
gence. In  both  cases,  an  unreasonable  delay  will  exonerate; 
in  the  former  it  exonerates  the  drawer  and  indorser,  in  the 
latter  the  indorser  only.  4  In  the  case  of  such  a  note,  a  delay  of 
two  months  and  a  half,  where  no  excusing  circumstances  are 
disclosed,  is  unreasonable.  5  But  as  in  the  case  of  the  bill, 
the  question  of  diligence  depends  upon  the  circumstances  and 
situation  of  the  parties  in  each  particular  instance;  upon  the 
understanding  of  all  the  parties  as  to  the  length  of  credit  to 
be  given  and  upon  such  other  facts  as  go  to  shew  what  is  a 
reasonable  time,  considering  the  relation  in  which  the  parties 
stand  towards  each  other.  6 

While  a  promissory  note  continues  in  its  original  shape  of 
a  promise  from  one  man  to  another,  it  bears  no  similitude  to 
a  bill  of  exchange-  When  it  is  indorsed,  the  resemblance 
begins;  for  then  it  is  an  order  by  the  indorser,  upon  the  maker 

1  Straker  v.  Graham,  4  Mee.  and  Wels.,  721;  2  H.  Black.,  565. 

a  4  Mee.  and  Wels.,  721. 

8  7  Taunt.,  397. 

4  Furman  v.  Haskins,  2  Caines  R.,  369;  Sice  v.  Cunningham,  1  Cowen  R., 
397;  Van  Hoesen  v.  Van  Alstyne,  3  Wend.  R.,  75. 

6  Losee  v.  Dunkin,  7  John.  R.,  70.  In  this  case  the  note  was  held  dishonored 
so  as  to  let  in  proof  of  payment  to  the  payee  before  indorsement. 

8  An  understanding  between  the  maker  and  payee  will  not  affect  the  indorser 
unless  he  is  privy  to  the  arrangement,  1  Cowen,  397.  If  the  note  bears  interest 
it  is  a  circumstance  that  shews  an  immediate  demand  was  not  contemplated. 
Wethey  v.  Andrews,  3  Hill  R.,  582.  Field  v.  Niekerson,  13  Mass.  R.,  131, 
discountenances  the  idea  of  a  verbal  understanding  to  extend  the  time  of  de- 
mand, and  there  is  a  recent  statute  of  that  state  requiring  that  a  note  on 
demand  shall  be  demanded  within  thirty  days.  Id. 


PRESENTMENT    FOR   ACCEPTANCE.  391 

of  the  note,  (his  debtor,  by  the  note,)  to  pay  to  the  indorsee; 
and  this  is  the  very  definition  of  a  bill  of  exchange.  The 
indorser  is  the  drawer;  the  maker  of  the  note  is  the  acceptor, 
and  the  indorsee  is  the  person  to  whom  it  is  made  payable. 
The  indorser  only  undertakes  in  case  the  maker  of  the  note 
does  not  pay,  and  the  indorsee  takes  the  note  upon  that  con- 
dition, and  must  therefore  use  diligence  in  making  a  demand 
of  payment  and  in  giving  notice  of  non-payment;  just  as  the 
person  to  whom  the  bill  of  exchange  is  made  payable  must 
shew  a  demand  or  due  diligence  to  get  the  money  from  the 
acceptor,  before  he  brings  an  action  against  the  drawer,  i  The 
analogy  here  is  perfect,  with  one  exception;  in  a  bill  that  has 
not  been  negotiated,  there  are  in  the  beginning  but  two  parties; 
whereas  the  note  does  not  become  analogous  to  the  bill  until 
it  has  been  indorsed,  and  there  are  three  parties  to  the  instru- 
ment. This  done,  a  promissory  note  payable  on  demand  is 
like  a  bill  payable  at  sight;  so  that,  as  in  the  latter  case  the 
holder  must  present  his  bill  for  acceptance  within  a  reason- 
able time,  in  order  to  charge  the  drawer;  so  in  the  former, 
the  indorsee  must  make  demand  of  payment  on  the  promisor 
within  a  reasonable  time  in  order  to  charge  the  indorser.  2 

In  England  the  question  whether  the  holder  has  used  dili- 
gence in  presenting  a  bill  for  acceptance,  is  treated  as  one  of 
fact,  to  be  passed  upon  by  the  jury  under  the  rule  of  law  laid 
down  by  the  court;  and  as  might  be  expected,  it  occasionally 
happens  that  different  conclusions  are  arrived  at  on  substan- 
tially the  same  state  of  facts.  3  In  this  state,  the  question  is 
considered  one  of  law  to  be  decided  by  the  court;  4  and  where 
the  facts  are  not  disputed,  this  seems  to  be  the  general  doc- 
trine in  similar  cases.  5 

The  law  on  the  subject  of  presenting  bills  for  acceptance  is 
founded  on  the  custom  of  merchants;  and  therefore  a  general 

1 2  Burr.  676,  per  Lord  Mansfield. 

*  Per  Chief  Justice  Parker  in  Field  v.  Nickerson,  13  Mass.,  136. 

*  2  H.  Black.,  565;  4  Mee.  and  Wels.,  721;  Mellish  v.  Rawdon,  9  Bing.,  416. 
4  Aymer  v.  Beers,  7  Cowen  R.,  705,  and  cases  there  cited. 

*  Tindal  v.  Brown,  1  Term  R.,  163  j  Bell  v.  Wardell,  Willes  Rep.,  204;  Fur- 
man  v.  Haskins,  2  Caines,  375;  20  John.  R.,  146;  13  Mass.,  181;  1  Cowen  R., 
397  j  1  Peters,  578;  10  Wend.,  304. 


392  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

and  uniform  custom  may  be  shewn  by  way  of  establishing  the 
duty  of  the  payee  of  a  bill  to  send  it  forward  for  acceptance, 
or  by  way  of  excusing  his  delay.  1  Delay  caused  by  negli- 
gence in  the  holder,  or  in  his  agent  and  a  post  office  clerk,  is 
no  excuse.  2  But  a  non-presentment  is  excused,  where  it  is 
shewn  to  have  been  impossible  to  present  the  bill  in  due  time  : 
thus,  where  a  bill  drawn  on  Leghorn  was  not  presented  in 
due  time,  owing  to  the  political  state  of  the  country,  that 
place  being  then  occupied  by  the  enemy,  it  was  held  that  the 
due  presentment  of  a  bill  necessarily  implies  an  exception  in 
favor  of  those  unavoidable  accidents  which  must  prevent  the 
party  from  doing  it  within  the  regular  time.  3  On  the  same 
principle,  delay  in  making  the  presentment  within  a  proper 
time,  may  be  excused  by  illness,  or  other  reasonable  cause  or 
accident  not  attributable  to  misconduct  of  the  holder.  And 
hence,  where  a  bill  was  drawn  in  New- York  on  Richmond  in 
Virginia,  and  delivered  to  the  payee,  who  carried  it  with  him 
to  his  residence  about  twenty  miles  from  the  latter  place,  and 
being  in  feeble  health,  traveled  slow  and  was  confined  to  his 
house  for  several  days  after  his  arrival  home;  it  was  adjudged 
that  twenty-nine  days  delay  were  not  sufficient  to  discharge 
the  drawer.  4  What  is  reasonable  time  is  to  be  determined  by 
the  circumstances  of  each  particular  case,  and  the  sickness  of 
the  holder  is  one  of  those  circumstances  which  are  to  be  con- 
sidered. 

The  object  for  which  a  bill  is  drawn,  or  where  it  is  purchased 
in  the  market  like  an  article  of  merchandise,  the  intention  of 
the  purchaser  is  material,  it  seems,  in  determining  the  ques- 
tion of  diligence :  as,  if  a  traveler  purchase  bills  in  New- York 
on  the  different  European  cities  through  which  he  expects  to 
pass,  or  if  a  dealer  in  the  article  buys  bills  on  'Change  with  the 

1  9  Bing.  R.,  416;  Story  on  Bills,  §  231. 

a  Schofleld  v.  Bayard,  3  Wend..  488;  Allen  v.  Suydam,  20  Wend.,  321.  On 
this  ground,  if  an  agent  fails  to  present  for  acceptance,  he  is  liable  for  damages. 
A  delay  caused  solely  by  the  neglect  of  the  post-office  official,  will  be  excused. 

*  The  bill  was  drawn  on  the  10th  of  September,  1800,  and  was  not  presented 
until  the  31st  of  December;  and  the  delay  was  excused  on  the  ground  of 
impostibility.    Patience  v.  Townley,  2  Smith's  Rep.,  223. 

*  Aymar  v.  Beers,  7  Cowen  R.,  705. 


PRESENTMENT  FOR  ACCEPTANCE.  393 

design  of  selling  them  again  for  better  prices.  1  In  a  late 
action  brought  by  the  holder  against  the  drawer,  on  a  bill  of 
exchange  that  had  been  drawn  in  London  on  Rio  de  Janeiro, 
payable  sixty  days  after  sight,  it  was  shewn  on  the  trial  that 
foreign  bills  were  constantly  bought  and  sold  in  the  market  for 
the  purpose  of  speculation,  and  that  this  course  of  business 
was  so  general  that  the  defendant  could  not  but  have  known 
of  its  existence :  and  Tindal  C.  J.,  before  whom  the  cause  was 
tried,  instructed  the  jury  that  they  were  to  determine  on  the 
evidence  before  them,  whether  there  had  been  an  unreasonable 
delay  on  the  part  of  the  plaintiff,  the  holder  of  the  bill,  in 
sending  it  forward  for  acceptance,  or  putting  it  into  circula- 
tion; and  that  in  order  to  arrive  at  the  proper  determination 
of  that  question,  they  were  to  take  into  their  consideration 
the  situation  and  interests,  not  of  the  drawer  only,  or  of  the 
holder  only,  but  the  situation  and  interests  of  both;  and  to 
say,  whether  under  all  the  circumstances,  the  delay  in  the 
case,  which  amounted  to  four  months  and  twenty-two  days, 
was  unreasonable  or  not.  And  the  jury  having  found  a 
verdict  for  the  plaintiff,  the  instruction  was  approved  in  the 
court  of  Kings  bench.  2  The  following  sentences,  while  they 

1  Story  on  Bills,  §  231.  "  la  respect  to  foreign  bills,  the  conveniences  if  not 
the  necessities  of  trade,  seem  to  require  that  a  very  liberal  allowance  of  time, 
both  for  the  transmission  and  presentment  of  bills,  should  be  allowed  to  every 
successive  holder." 

*  Mellish  v.  Rawdon,  9  Bing.  R.,  416.  On  the  trial  there  was  no  evidence  of 
any  such  unvarying  course  having  been  observed  with  respect  to  foreign  bills 
payable  at  a  given  time  after  sight,  as  that  the  holder  should  send  them  for- 
ward for  acceptance  within  any  certain  time;  as,  by  the  first  or  second  packet 
that  sailed  after  they  came  into  his  hands;  on  the  contrary,  there  was  con- 
flicting evidence  given  by  the  merchants  on  that  point;  some  stating  that  such 
was  their  understanding  of  the  course  and  practice,  others  stating  that  they 
understood  foreign  bills  were  usually  kept,  without  being  forwarded  for  accep- 
tance, as  long  as  it  suited  the  convenience  or  interest  of  the  holder.  But  it 
appeared  that  where  drawers  of  such  billa  are  desirous  of  limiting  the  time  of 
their  responsibility,  there  are  various  modes  which  they  are  accustomed  to 
pursue  to  attain  that  object;  either,  they  are  in  the  habit  of  sending  forward 
one  part  for  acceptance,  and  bringing  another  part  of  the  bill  to  the  market, 
upon  which  is  noted  the  time  at  which  the  first  was  forwarded ;  or,  they  make  it 
a  matter  of  stipulation  with  the  purchaser  to  send  it  forward  within  a  limited 
time.  And  all  the  witnesses  agreed  that  once  put  into  circulation,  it  might  be 

23 


394  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

exhibit  the  ground  of  the  decision,  may  also  serve  to  illustrate 
the  considerations  appropriately  bearing  on  the  question  of 
diligence. 

"  There  was  no  evidence  in  the  cause  of  any  such  unvarying 
course  having  been  observed  with  respect  to  foreign  bills  pay- 
able at  a  given  time  after  sight,  as,  that  the  holder  who  kept 
them  in  his  own  hands  sent  them  forward  for  acceptance 
within  any  certain  time,  as  for  instance,  by  the  first  or  second 
packet  which  sailed  after  they  came  to  his  hands.  Had  there 
been  proof  of  any  such  general  usage,  it  would  have  put  an 
end  to  all  doubt;  the  parties  would  be  taken  to  have  dealt 
with  each  other  on  the  footing  of  such  usage;  the  reasonable 
time  for  forwarding  the  bill  would  then  have  been  marked 
with  the  same  precision  as  the  reasonable  time  for  giving 
notice  of  the  dishonor  of  an  inland  bill;  and  the  only  point 
for  the  consideration  of  the  jury  would  then  have  been,  wheth- 
er the  bill  had  been  sent  forward  within  such  a  limited  time 
or  not.  But  there  was  no  such  evidence  of  usage;  on  the  con- 
trary, there  was  conflicting  evidence  of  the  judgment  and 
opinion  of  merchants  on  that  point;  some  stating  that  such 
was  their  understanding  of  the  course  and  practice,  others  on 
the  contrary  stating,  that  they  understood  that  foreign  bills 
were  usually  kept  without  being  forwarded  for  acceptance,  as 
long  as  it  suited  the  interests  or  convenience  of  the  holder. 
Again,  there  is  no  definite  time  prescribed  by  the  law  of  Eng- 
land, within  which  such  presentment  for  acceptance  must 
take  place.  In  some  countries,  as  in  France,  the  times  within 
which  a  foreign  bill  payable  at  sight,  or  any  certain  time  after, 
must  be  presented  for  acceptance  to  the  drawee,  are  fixed  by 
positive  law,  according  to  the  place  where,  and  the  place  on 
which  the  bill  is  drawn.  Thus,  for  instance,  where  it  is 
drawn  from  the  continent  of  Europe,  or  the  isles  of  Europe, 
and  payable  in  the  European  possessions  of  France,  such 
presentment  for  acceptance  must  be  made  within  six  months 
from  the  date;  in  default  of  which  the  holder  can  have  no 

sent  to  any  part  of  the  world,  provided  each  successive  holder  kept  it  only  a 
reasonable  time.  The  above  may  serve  to  shew  the  range  of  inquiry  permitted 
on  the  trial. 


PRESENTMENT    FOR   ACCEPTANCE.  395 

remedy  against  the  drawer  or  indorsers.  i  But  there  is  no 
such  law  in  England;  and  in  the  absence  of  any  such  positive 
regulation,  or  of  any  general  usage,  or  course  of  trade,  no 
other  rule,  as  it  appears  to  us,  can  be  laid  down  as  the  limit 
within  which  the  bill  must  be  forwarded  to  its  destination, 
than  that  it  must  take  place  within  a  reasonable  time  under 
all  the  circumstances  of  the  case,  and  that  there  must  be  no 
unreasonable  or  improper  delay." 

The  court  then  go  on  to  say  that  it  cannot  be  required  of 
the  holder  instantly  to  send  forward  the  bill  for  acceptance 
or  put  it  in  circulation,  without  regard  to  circumstances;  that 
such  a  rule  would  greatly  impede  if  not  altogether  destroy 
the  market  for  buying  and  selling  foreign  bills,  to  the  great 
injury,  no  less  than  to  the  inconvenience  of  the  drawer  him- 
self; and  that  in  determining  the  question  whether  there  has 
been  reasonable  diligence  used  in  any  particular  case,  the 
jury  are  to  consider  the  interest  of  both  the  drawer  and  the 
holder.  The  interest  of  the  drawer  is,  that  the  bill  should 
be  presented  as  early  as  possible  after  he  has  sold  it;  for  the 
longer  the  delay  the  greater  the  risk  he  runs  of  the  insolvency 
of  the  drawee.  The  interest  of  the  holder  is,  that  he  may  be 
allowed  to  keep  the  bill  until  he  can  make  a  profit  on  it,  or 
at  all  events,  save  himself  from  loss.  When  these  interest  are 
found  to  clash  one  with  the  other,  the  jury  are  to  determine 
what,  regarding  fairly  the  interest  of  both  drawer  and  holder^ 
is  reasonable  time  within  which  to  present  the  bill.  2 

1  Code  de  Commerce,  liv.  1,  tit.  8,  §  11. 

*  "  In  the  present  case,  on  the  10th  of  Sept.,  1830,  the  bill  was  sold  in  the 
market  by  the  defendant's  order,  and  purchased  by  the  plaintiff.  It  was  kept 
by  the  plaintiff  in  his  own  hands  until  the  first  of  February,  1831,  when  it  was 
again  sold  by  him  in  the  market,  and  put  into  circulation.  But  the  rate  of 
exchange  in  the  market  fell  immediately  after  the  purchase  of  the  bill  by  the 
plaintiff,  and  during  the  whole  of  the  interval  down  to  the  very  time  of  the 
sale  of  the  bill  by  him,  continued  lower  than  it  was  at  the  time  plaintiff  pur- 
chased the  bill.  •  •  •  It  was  further  proved  at  the  trial,  that  foreign  bills 
were  constantly  bought  and  sold  at  the  market  for  the  purpose  of  speculation; 
that  this  course  of  business  was  so  general  that  the  defendant  could  not  but 
know  that  it  existed;  and  the  jury  might  probably  infer,  and  if  they  did  so,  we 
think  they  were  warranted  by  the  evidence  in  so  doing,  that  the  defendant 
must  have  known  that  the  particular  bill  in  question  had  been  purchased  by 
the  plaintiff  for  that  purpose.  As,  therefore,  the  drawer  chose  his  own  time 


396  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

A  check  drawn  on  a  bank  is  a  bill  of  exchange  payable  on 
demand,  i  If  drawn  on  a  foreign  bank  it  is  a  foreign  bill; 
and  although  the  current  of  decisions  in  this  state  seems  to 
warrant  a  distinction  between  a  check  and  a  bill,  in  regard  to 
the  effect  of  omiting  to  present  the  same  to  the  drawee 
within  a  reasonable  time,  it  is  very  clear  that  the  drawer  of 
a  check,  as  well  as  the  drawer  of  any  other  bill  or  draft,  is 
discharged,  if  in  consequence  of  unreasonable  delay  in  pre- 
senting the  check  an  injury  or  loss  is  sustained  by  him.  2  It 
is  clear  also  that  in  an  action  against  the  drawer  of  a  check, 
the  holder  cannot,  in  general,  recover  unless  he  shews  that  it 
has  been  presented  for  payment  and  dishonored,  and  that 
notice  of  non-payment  has  been  properly  given.  3  But  the 
holder  of  a  negotiable  check,  in  order  to  charge  the  drawer,  has 
not  been  generally  held  responsible  for  the  use  of  the  same 
degree  of  diligence  as  the  law  requires  of  the  holder  of  an 
ordinary  bill  of  exchange.  4  Unless  the  bank  on  which  the 
check  is  drawn,  fails  before  it  is  presented  for  payment,  the 
drawer  loses  nothing  by  the  delay.  Great  stress  is  laid  upon 
this  fact  as  the  ground  of  a  distinction  between  a  bill  and  a 
check;  but  exactly  the  same  thing  may  be  said  in  either  case. 

1  Chapman  v.  White,  2  Selden  R.,  412.  In  this  case  the  same  principles  are 
applied  to  a  check  as  are  applicable  to  an  ordinary  draft  or  bill  of  exchange ; 
and  the  court  holds  distinctly  that  the  drawee  owes  no  duty  to  the  holder  until 
after  the  check  or  bill  is  accepted.  Barker  v.  Anderson,  21  Wend.,  373,  and 
cases  there  cited;  1  Hall,  80;  Bellamy  v.  Majoribanks,  8  Eng.  Law  and  Eq., 
628;  11  Paige  Ch.  R.,  616. 

a  Little  v.  The  Phenix  Bank,  2  Hill  R.,  425;  S.  C.,  7  Hill  R.,  359. 

3  Barker  v.  Anderson.  21  Wend.  R.,  372. 

4  Murray  v.  Judah,  6  Cowen  R.,  484;  2  Hill  R.,  425. 


for  bringing  the  bill  into  the  market,  the  jury  might  not  think  it  unreasonable 
that  the  purchaser  should  have  the  privilege  of  keeping  it  until  the  state  of 
the  market  was  such  as  to  enable  him  to  part  with  it  without  any  great  loss. 
And  if  such  was  their  opinion,  we  are  not  able  to  say  that  it  was  unreasonable 
or  contrary  to  law."  The  drawer  might  have  stipulated  for  an  early  present- 
ment, or  otherwise  have  guarded  himself  against  delay.  Ordinarily,  the 
holder  has  a  sufficient  interest  in  having  the  bill  presented  at  an  early  day; 
since,  by  delay,  he  loses  not  onlj  the  interest  on  the  amount  of  the  bill,  but 
also  runs  the  risk  of  the  parties  remaining  solvent.  23  Eng.  Com.  Law  R., 
324. 


PRESENTMENT    FOR    ACCEPTANCE.  397 

If  the  drawee  does  not  fail,  the  drawer  is  not  injured  by  the 
omission  to  present  a  bill  for  acceptance,  or  a  check  for  pay- 
ment i 

The  nature  of  the  rule  requiring  diligence  in  the  present- 
ment of  a  check  is  shewn  by  the  cases  that  excuse  a  non-pre- 
sentment :  if  the  drawer  have  no  funds  in  the  bank,  or  if  the 
bank  itself  be  restrained  by  an  order  of  court  from  paying 
out  money  or  transacting  business,  presentment  is  excused; 
because  the  law  does  not  require  the  performance  of  acts  that 
are  merely  ceremonial  and  nugatory,  and  because  the  drawer 
is  not  injured  by  the  omission.  2  Here  again,  a  bill  and  a 
check  £and  upon  nearly  the  same  footing;  for  if  it  be  clearly 
shewn  that  the  drawer  of  a  bill  of  exchange  had  no  funds  in 
the  hands  of  the  drawee  and  no  right  to  expect  that  his  bill 
would  be  honored,  or  if  it  be  shewn  affirmatively  that  no 
damage  could  arise  to  him  in  consequence  of  the  omission,  the 
necessity  for  presentment  and  notice  does  not  exist.  3  Indeed, 
most  of  the  cases  involving  the  question  of  diligence  in  the 
holder  of  a  check,  have  arisen  in  those  instances  where,  in 
consequence  of  the  drawee's  becoming  insolvent,  the  question 
arises  as  to  who  shall  sustain  the  loss.  4 

In  truth  the  distinction  between  the  two  classes  of  cases  is 
more  one  of  evidence  than  of  principle.  The  check  is  always 
presumed  to  be  drawn  on  actual  funds.  5  And  if  the  holder 
has  been  guilty  of  laches  in  not  presenting  it  in  due  time,  it 

1  If  a  check  is  drawn  payable  at  a  future  day,  it  is  treated  exactly  as  a  bill 
of  exchange.  Bowenv.  Newell,  4  Selden  R.,  190;  Martin  v.  Bailey  &  Burgess, 
4  Amer.  Law  Reg.,  632,  Ohio  case;  Marzetti  v.  Williams,  1  Barn,  and  Adol., 
415. 

*  Lovett  v.  Cornwell,  6  Wend.,  367.    In  this  case  the  check  was  given  in  the 
afternoon,  and  an  injunction  was  served  upon  the  bank  the  next  morning,  half 
an  hour  after  it  opened  for  business,  effectually  arresting  its  capacity  for  busi- 
ness.  Held  that  no  presentment  was  necessary  to  be  made  or  shewn.  21  Pick.» 
327;  14  Mass.,  449. 

*  Commercial  Bank  of  Albany  v.  Hughes,  17  Wend.,  94;  5  Mass.  R.,  170; 
1  Serg.  and  Rawle,  834;  7  Wend.,  165.    Injury  to  the  drawer  of  a  bill  is  pre- 
sumed, where  the  bill  is  not  presented  in  time  and  notice  of  non-acceptance 
given. 

4  Per  Ch.  J.  Nelson,  2  Hill  R.,  430,  431;  Boddington  v.  Schlencker.  1 
and  Mann.,  540;  S.  C.,  4  Barn,  and  Adol.,  762. 

*  White  v.  Ambler,  4  Selden  R.,  170. 


398  BILLS  OF   EXCHANGE   AND  PROMISSORY  NOTES. 

is  incumbent  on  him  to  shew  that  the  drawer  has  not 
injured  by  the  delay :  and  if  he  shews  that  the  drawer  has 
himself  drawn  out  the  fund  against  which  he  drew  the  check, 
the  burden  of  proving  actual  damages  is  shifted  upon  the 
drawer,  i  And  if  on  the  whole  case  it  appear  that  the  holder 
has  been  guilty  of  negligence,  to  the  injury  of  the  drawer,  the 
latter  is  discharged.  2. 

To  charge  the  indorser  of  a  check,  it  must  be  presented  for 
payment  with  diligence  at  least  equal  to  that  required  in  the 
case  of  a  draft  or  bill  of  exchange;  but,  as  between  a  bonafide 
holder  and  the  drawer  of  a  dishonored  check,  no  delay  in 
demanding  its  payment  is  deemed  to  be  so  unreasonable  as  to 
bar  a  recovery  by  the  holder,  unless  it  appears  that  it  has 
worked  an  actual  injury  or  loss  to  the  drawer.  A  failure  of 
the  bank  on  which  the  check  was  drawn,  in  consequence  of 
which  the  drawer  loses  his  funds  which  have  been  deposited 
to  meet  the  draft,  presents  the  usual  if  not  the  only  case  in 
which  the  drawer  is  injured  by  delay  in  presenting  the  check.  3 

According  to  the  general  rule,  the  check  ought  to  be  presented 
as  early  as  the  next  day  after  its  date  or  its  receipt.  4  But 
where  the  check  has  been  certified,  a  delay  of  a  year  does  not 
prejudice  the  rights  of  the  holder,  as  against  the  drawee;  5 
nor  can  the  drawer  complain  of  the  delay  that  does  him  no 
injury. 

There  is  no  distinction  between  a  foreign  and  an  inland  bill 
in  regard  to  the  duty  of  the  payee  or  holder  to  present  the 
same  for  acceptance  within  a  reasonable  time.  He  has  no 
right  to  lock  up  the  bill  for  any  considerable  length  of  time, 
nor  is  he  bound  to  transmit  it  for  acceptance  at  the  earliest 
opportunity.  '  Whether  negotiated  or  not,  it  is  sufficient  if 

1  Conroy  v.  Warren,  3  John.  Cas.,  259 ;  id.  6. 

*  Little  v.  Phenix  Bank,  2  Hill  R.,  425.     The  drawing  of  a  check  on  a  hank 
where  the  drawer  has  no  funds  is,  when  unexplainedj  a  fraud.    Franklin  v. 
Vanderpoel,  1  Hall,  78. 

*  Harbeck  v.  Crafts,  4  Duer  R.,  122. 

4  4  Bing.  N.  C.,  268;  5  Scott,  694;  10  Wend.,  304. 

*  4  Duer  R.,  219. 


PRESENTMENT    FOR   ACCEPTANCE.  399 

it  be  forwarded  in  the  natural  and  regular  course  of  busi- 
ness, i 

Bills  should  be  presented  for  acceptance  during  the  usual 
hours  of  business;  and  these,  except  where  the  presentment 
is  made  at  a  bank,  generally  range  through  the  whole  day 
down  to  bed  time  in  the  evening.  2  When  made  at  a  bank,  it 
should  be  within  the  usual  banking  hours.  3 

When  a  bill  is  addressed  to  the  drawee  at  a  particular 
place,  the  presentment  should  be  made  at  that  place;  and  in 
case  he  has  removed  to  another  part  of  the  same  city,  it  is 
doubtless  the  duty  of  the  holder  to  make  diligent  inquiry  to 
ascertain  his  place  of  residence  or  business,  and  present 
it  to  him  for  acceptance.  4  But  if  it  appear  that  the 
drawee  never  lived  there,  or  has  absconded,  or  has  remov- 
ed to  a  distant  place,  or  if  his  house  be  shut  up  and  no  one 
found  there  to  answer  the  demand,  the  bill  is  to  be  treated 
as  dishonored.  5  But  where  the  bill  is  not  addressed  to 
any  particular  place,  the  presentment  should  be  made  at 
the  residence  or  domicil  of  the  drawee  without  regard  to  the 
place  where  it  is  payable :  6  and  in  case  he  has  remov- 
ed to  another  place  of  residence  in  the  same  state,  the 
holder  should  make  diligent  search  and  inquiry  for  him,  and 
present  the  bill  at  his  place  of  business  or  residence  for 
acceptance.  7  If  he  be  absent  from  the  state,  the  bill  may  be 
presented  at  his  house,  or  to  his  agent  if  he  leave  one.  8  But 

1  Fry  v.  Hill,  7  Taunt.,  397;  Shute  v.  Bobbins,  Mood,  and  M.,  183;  3  C.  and 
P.,  80;  7  Cowen,  705;  Wallace  T.  Agry,  4  Mason,  836;  S.  C.,  6  id.  118;  10 
Wend..  304. 

»  Cayuga  Co.  Bank  v.  Hunt,  2  Hill  R.,  635;  Parker  v.  Gordon,  7  East,  885; 
Elford  v.  Teed,  1  Maule  and  S.,  28;  6  id.  44. 

'  Barclay  v.  Bailey,  2  Campb.,  527.  A  common  trader  has  no  peculiar  or 
fixed  hours  of  business,  like  a  bank.  7  East,  885. 

4  De  Wolf  v.  Murray,  2  Sand.  R.,  166;  2  Hill  R.,  635;  Wilkina  r.  Jadis,  2 
Barn,  and  Adol.,  188. 

•  Idem;  Wolf  T.  Jewett,  10  Curry,  (Louis.,)  884;  Chitty  on  Bills,  279,  280. 

•  Chitty  on  Bills,  279;  Story  on  Bills,  §  286,  286. 

T  Anderson  v.  Drake,  14  John.  R.,  114;  19  John.  R.,391;  Taylor  T,  Snyder, 
8  Denio,  145;  3  John.  R.,  207. 

•  Phillips  T.  Astling,  2  Taunt.,  206;  Cromwell  T.  Hynson,  2  Esp.  R.,  211. 


400  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

if  he  have  removed  from  the  country,  it  is  certain  the  holder 
is  not  bound  to  follow  him.  i 

The  presentment  should  be  made  to  the  drawee  himself  or 
to  his  authorized  agent;  and  it  should  be  made  in  such  a 
manner  as  to  give  him  an  opportunity  to  act  deliberately.  2 
If  the  drawee  desire  it,  the  bill  should  be  left  with  him  twen- 
ty-four hours,  unless  in  the  interim  he  either  accepts  or 
declares  a  resolution  not  to  accept.  3  The  object  is  to  give 
the  drawee  time  to  look  over  his  accounts  and  see  whether  he 
has  sufficient  funds,  so  that  he  can  decide  intelligently  wheth- 
er he  will  accept  or  not.  4 

In  general,  the  presentment  for  acceptance  should  be  made 
by  the  rightful  holder;  but  the  party  in  possession  is  presumed 
to  have  a  right  to  demand  payment  of  the  bill,  and  there  is 
the  same  reason  for  saying  that  the  holder  or  person  having 
the  bill  in  his  possession  may  make  a  valid  presentment  for 
acceptance.  5  Possession  of  the  instrument  is  prima  facie 
evidence  of  title  to  it,  and  the  drawee  is  not  bound  to  know 
or  to  ascertain  through  what  channel  it  came  into  the  hands 
of  the  person  presenting  it.  6  And  though  he  accept  the  bill 
when  presented  by  a  person  having  no  title  to  it,  he  is  not 
precluded  from  afterwards  disputing  the  genuineness  of  the 
successive  indorsements;  for  his  acceptance  admits  only  the 
genuineness  of  the  drawer's  signature.  7 

Where  a  bill  is  drawn  upon  two  persons  who  are  not  part- 
ners, it  should  be  presented  to  them  both  for  acceptance;  for 

1 14  John.  R.,  114.  The  states  are  considered  in  respect  to  each  other  as 
foreign  governments,  but  whether  the  rule  would  apply  in  this  case  or  not, 
does  not  seem  clear.  2  Taunt.,  206;  9  Wheat.,  698;  3  Greenl.,  82. 

*  2  R.  S.,  53.  3d  ed;  Cheek  v.  Roper,  5  Esp.  R.,  175;  Chitty  on  Bills,  279. 
8  Bayley,  ch.  7,  §  1;  2R.  S.,  53. 

4  Bellasis  v.  Hester,  1  Lord  Raym.,  281;  Ingraham  v.  Foster,  2  Smith  R., 
242  Marius  on  Bills,  15,  16;  Story  on  Bills,  237. 

6  Bank  of  Utica  v.  Smith,  18  John.  R.,  230;  Freeman  v.  Boynton,  7  Mass. 
B.,  483;  Story  on  Bills,  §  229. 

*  3  John.  Cas.,  5,  259;  8  Wend.,  600;  7  Page  Ch.  R.,  615;  6  Hill  R.,  336;  1 
Denio,  116. 

1  Canal  Bank  v.  Bank  of  Albany,  1  Hill  R.,  287. 


PRESENTMENT    FOR   ACCEPTANCE.  401 

in  this  case  neither  of  them  has  the  right  to  bind  the  other,  i 
But  where  a  bill  is  drawn  on  a  firm,  an  acceptance  by  one  of 
them  will  bind  his  co-partners;  and  though  one  of  them  be 
dead,  it  has  been  held  that  no  demand  of  payment  need 
be  made  upon  the  personal  representative  of  the  deceased 
partner.  2  If,  however,  a  bill  be  drawn  upon  a  single  indi- 
vidual, his  death  does  not,  it  seems,  discharge  the  holder  from 
the  duty  of  presenting  the  bill  to  the  legal  representative;  3 
for  although  the  executor  or  administrator  has  no  right  to 
bind  the  estate  of  the  deceased  by  accepting  the  bill,  it  is 
incumbent  upon  the  holder  to  take  the  proper  steps  to  charge 
the  drawer  and  indorsers.  4  Upon  principle,  it  is  not  easy  to 
see  upon  what  ground  the  holder  is  bound  to  present  a  bill 
drawn  upon  the  deceased  to  his  executor  or  administrator  for 
acceptance.  An  acceptance  by  the  representative  binding 
himself  personally,  is  not  according  to  the  tenor  of  the  bill; 
neither  is  an  acceptance  qualified  so  as  to  render  him  responsi- 
ble to  pay  out  of  the  assets  that  may  come  into  his  hands.  5 
But  the  drawer  and  indorser  having  acted  in  good  faith,  are 
entitled  to  notice  that  the  bill  has  been  dishonored.  6  So, 
where  the  drawee  has  absconded,  or  is  a  bankrupt,  or  is 
insolvent,  the  bill  should  be  properly  presented,  in  order  that 
due  notice  of  its  dishonor  may  be  given  to  the  parties  liable 
thereon;  for  the  insolvency  of  the  drawee  does  not  alter  the 

1  Willis  v.  Green,  6  Hill  R.,  232;  Bayley  on  Bills,  ch.  6,  §  1. 

*  Cayuga  Co.  Bank  v.  Hunt,  2  Hill  R.,  685. 

1  Mr.  Chitty  says,  if  on  presentment  it  appear  that  the  drawee  is  dead,  the 
holder  should  inquire  after  his  personal  representative,  and,  if  he  live  within  a 
reasonable  distance,  should  present  the  bill  to  him.  Chitty  on  Bills,  280.  Mr. 
Story  says  the  death  of  the  drawee  is  no  excuse  for  the  omission  of  present- 
ment. Story  on  Bills,  §  280. 

*  6  Hill  R.,  282.    A  general   unqualified   acceptance  by  an  executor  on 
account  of  debts  due  from  his  testator,  is  an  admission  of  assets,  and  will  bind 
him  personally  unless  be  accepts  to  pay  out  the  estate  of  the  deceased.    Chitty 
on  Bills,  807;  2  Brod.  and  Bing.,  460;  Lovett  v.  Cornwall,  6  Wend.,  873. 

'  Tombekbee  Bank  v.  Dumell,  5  Mason,  56.  In  this  case  it  waa  held  that  a 
bill  drawn  upon  a  firm  before  and  accepted  by  one  of  the  partners  after  a  dis- 
solution, binds  only  the  partner  who  accepts. 

*  Tebbitts  v.   Dowd,  23  Wend.,  379;  Gunson  v.  Metz,  1  Barn,  and  Cress, 
193;  6  Hill  R.,  282. 


402  BILLS  OF   EXCHANGE  AND   PROMISSORY  NOTES. 

nature  of  the  contract  entered  into  by  the  drawer  and  indorser.  1 
But  where  the  drawer  has  no  effects  in  the  hands  of  the 
drawee  and  no  reasonable  ground  to  expect  that  his  bill  will 
be  honored,  he  cannot  complain  of  the  want  of  notice.  2 

Bills  of  exchange  sometimes  contain  a  direction  that  in  case 
of  need,  au  besoin,  application  is  to  be  made  to  another  person; 
in  these  cases  if  the  drawee  refuse  to  accept,  the  bill  should 
then  be  presented  to  the  person  so  named.  3 

We  have  said  that  it  is  for  the  interest  of  the  owner  of  a 
bill,  payable  a  specified  length  of  time  after  date,  or  on  a  day 
certain,  to  have  it  presented  at  an  early  day  for  acceptance; 
since  by  the  acceptance  he  acquires  an  additional  security  for  the 
payment  of  his  debt.  Though  he  is  not  required  by  any  rule 
of  law  to  have  a  bill  so  drawn  presented  for  acceptance,  he 
has  a  right  to  demand  that  it  be  accepted.  On  this  ground  it 
has  been  adjudged  that  an  agent  who  receives  a  bill  of 
exchange  for  collection  which  has  not  been  accepted,  is  bound 
to  present  the  same  for  acceptance  without  unreasonable  delay, 
as  well  as  to  present  the  same  for  payment  when  it  becomes 
due,  or  he  will  be  liable  to  his  principal  for  the  damages  which 
the  latter  sustains  by  such  negligence.  4  If  the  debt  be  lost 
in  consequence  of  the  agent's  neglect,  he  is  presumptively 

1  May  v.  Coffin,  4  Mass.  R.,  341;  Barton  v.  Baker,  1  S.  and  R.;  334  •  Gibbs 
v.  Cannon,  9  id.  201 

*  Valkv.  Simmons,  4  Mason,  T13;  Warden  v.  Tucker,  7  Mass.  R.,  452. 

8  Chitty  on  Bills,  274;  Story  on  Bills,  §  219,  229.  When  such  third  person 
accepts  the  bill,  he  has  his  remedy  against  the  party  for  whose  account  the 
acceptance  is  so  made. 

4  Allen  v.  Suydam,  20  "Wend.  R.,  321;  S.  C.,  17  Wend.,  368.  The  action 
was  brought  against  the  defendant  for  negligence  in  not  presenting  a  draft 
within  a  reasonable  time.  The  draft  was  drawn  on  a  firm  in  New  Hampshire, 
at  Concord,  payable  two  months  after  date,  and  dated  July  21;  on  the  16th  of 
August,  it  was  placed  in  the  hands  of  the  defendants  for  collection;  on  the  2d 
of  September,  it  was  sent  by  them  to  the  cashier  of  a  bank  in  Concord,  for 
presentment;  it  was  presented  by  him  on  the  7th  and  10th  of  September,  and 
on  the  latter  day  refused  and  protested  for  non-acceptance,  and  came  back  to 
the  defendants  on  the  16th;  and  the  drawer  died  insolvent  on  the  9th  of  Octo- 
ber following.  And  it  was  shewn  that  the  drawee  had  honored  drafts  drawn 
by  the  same  person  to  a  larger  amount  up  to  the  middle  of  August. 


PBESENTMENT    FOR   ACCEPTANCE.  403 

liable  for  the  face  of  the  billj  but  may  shew  any  circumstances 
tending  to  mitigate  or  reduce  the  damages  to  a  merely  nominal 
amount,  i  This  principle  applies  to  banks  or  bankers  that 
receive  negotiable  paper  for  collection  and  thereby  become 
responsible  to  take  the  necessary  measures  to  charge  the 
drawer  and  all  the  other  parties  upon  default  or  refu- 
sal to  pay  or  accept.  The  ground  of  the  rule  is,  that  the 
acceptance  of  such  paper  deposited  for  collection,  forms  an 
implied  undertaking  to  make  the  demands  and  give  the  notices 
required  by  law  or  mercantile  usage  for  the  perfect  protec- 
tion of  the  holder's  rights  against  all  previous  parties;  for 
which  undertaking  the  use  of  the  funds  thus  temporarily  ob- 
tained or  of  the  average  balances  thereof,  for  the  purposes  of 
discount  or  exchange,  forms  a  valuable  consideration.  2 

But  what  is  the  extent  of  the  duty  of  collection  so  assumed  1 
Let  us  suppose  a  bill  of  exchange  drawn  in  New- York  upon  a 
person  resident  in  Philadelphia,  is  deposited  for  collection  in 
a  New- York  bank,  is  received  for  that  purpose,  and  duly 
transmitted  to  their  correspondent  and  agent,  a  Philadelphia 
bank,  the  notary  of  which  is  guilty  of  a  neglect,  whereby  on 
refusal  to  accept  at  Philadelphia,  payment  from  the  New- York 
drawer  or  indorser  is  lost :  Is  the  New- York  bank  first  receiv- 
ing the  paper  for  collection,  responsible  for  the  loss  or  damage 
arising  from  the  default  of  its  Philadelphia  agent  1  Upon  this 
question  the  Court  for  the  correction  of  Errors  resolved,  that 
when  a  bank  or  broker,  or  other  money  dealer,  receives  upon 
a  good  consideration,  a  note  or  bill  for  collection,  in  the  place 
where  sucli  bank,  broker  or  dealer  carries  on  business,  or  at  a 
distant  place,  the  party  receiving  the  same  for  collection  is 
liable  for  the  neglect,  omission  or  other  misconduct  of  the 
bank  or  agent  to  whom  the  note  or  bill  is  sent,  either  in  the 
negotiation,  collection  or  paying  over  the  money,  by  which 
the  money  is  lost,  or  other  injury  sustained  by  the  owner  of 
the  note  or  bill,  unless  there  be  some  agreement  to  the  con- 

1  Van  Wart  T.  Woolley,  5  Dowl.  and  Ryl.,  874. 

•Smedes  v.  Bank  of  Utica.  20  John.  R.,  372;  and  S.  C.,  3  Cowen,  663> 
McKinster  v.  Bank  of  Utica,  9  Wend.,  46;  11  id.  473,  S.  C. 


BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

trary  express  or  implied,  i  In  Connecticut,  it  has  been  ad- 
judged that  a  bank  receiving  a  note  for  collection,  is  not 
answerable  for  the  default  or  negligence  of  a  foreign  agent.  2 
And  it  has  been  held  that  where  a  bill  is  received,  not  for  col- 
lection, but  for  transmission  to  another  bank  to  be  collected, 
the  bank  to  which  it  was  thus  transmitted  becomes  the  agent 
of  the  holder.  3  But  in  this  state  where  there  is  no  agreement 
to  the  contrary  express  or  implied,  and  it  becomes  necessary 
for  a  bank  receiving  a  bill  for  collection,  to  employ  some  other 
bank  or  individual  to  make  the  collection  at  a  distant  place 
where  it  is  payable,  the  bank  or  individual  so  employed  be- 
comes the  agent  of  the  former  bank  and  not  of  the  owner. 
The  principle  is,  that  when  a  trust  is  confided  to  an  agent, 
and  he  whose  interest  is  intrusted  is  damnified  by  the  neglect 
of  a  person  whom  the  agent  employs  in  discharge  of  the  trust, 
the  agent  is  answerable  to  his  employer.  4  The  holder  of  the 
bill  is  the  principal,  and  the  bank  receiving  it  for  collection 
is  his  agent.  5  So  that  the  true  inquiry  is,  what  is  the  scope 
of  the  contract  entered  into  by  the  agent  1  If  he  undertakes 
the  collection,  he  is  bound  to  take  the  necessary  steps  and  to 
use  all  expedient  means  to  insure  the  performance  of  his 

1  Allen  v.  The  Merchant's  Bank  of  New- York,  15  "Wend.  R.,  482;  S.  C.,  20 
Wend.,  215.  The  supreme  court  were  unanimous  in  the  opinion  that  the  New- 
York  bank  was  not  responsible  for  the  negligence  of  their  correspondent  and 
agent  in  Philadelphia,  and  the  chancellor  and  nine  senators  in  the  court  of 
errors  were  in  favor  of  affirming  the  judgment  pronounced  in  the  supreme 
court ;  while  fourteen  senators  agreed  with  the  opinion  delivered  by  the  accom- 
plished senator  Verplanck. 

1  East  Haddam  Bank  v.  Soovil,  12  Conn.  R.,  303.  In  Van  Wartv.  Wooley, 
8  Barn,  and  Cress.,  419,  the  defendants  at  Birmingham  received  a  bill  upon 
London  to  get  accepted,  and  forwarded  it  to  their  London  banker,  who  failed 
to  protest  it  for  non-acceptance,  and  give  the  proper  notices;  and  the  defend- 
ants were  held  liable  for  the  neglect  of  their  agent. 

*  Bank  of  Washington  v.  Triplett  &  Neale,  1  Peters,  25;  see  Fabens  v.  The 
Mercantile  Bank,  23  Pick.,  330.    This  case  agrees  with  the  decision  of  the 
supreme  court  of  this  state  in  Allen  v.  The  Merchants  Bank  of  the  city  of 
W.  Y..  15  Wend..  482. 

4  Denny  v.  The  Manhattan  Co,  2  Denio,  115;  S.  C.,  5  Denio,  639;  Colvin  v. 
Holbrook,  2  Corns.,  126;  Montgomery  Co.  Bank  v.  Albany  City  Bank,  3  Selden 
R.,  459. 

*  Commercial  Bank  of  Penn.  v.  Union  Bank  of  New- York,  1  Kernan  R., 
203  and  cases  there  cited. 


ACCEPTANCE.  405 

engagement;  and  if  in  the  prosecution  of  his  undertaking  it 
becomes  necessary  for  him  to  act  through  the  agency  of  a 
third  person,  he  is  answerable  for  the  conduct  of  that  person.  1 
Where  a  bank  with  whom  a  note  is  deposited  for  collec- 
tion fails  to  take  the  proper  steps  to  charge  the  drawer  or 
indorser,  in  consequence  of  which  the  holder  is  unable  to  col- 
lect the  amount  of  the  bill,  the  measure  of  damages  is  the 
face  of  the  bill  with  interest;  the  costs  of  an  unsuccessful  suit 
against  the  party  not  charged,  cannot  be  recovered  against  the 
bank.  2 


III.  ACCEPTANCE  OF  BILLS. 

An  acceptance  is  an  engagement  to  pay  a  bill  according  to 
the  tenor  of  the  acceptance,  and  a  general  acceptance  is  an 
engagement  to  pay  according  to  the  tenor  of  the  bill.  3  The 
act  of  accepting  a  bill  of  exchange,  is  like  the  making  and 
delivery  of  a  promissory  note;  it  is  the  execution  of  a  contract, 
by  which  the  acceptor  undertakes  to  pay  the  amount  men- 
tioned in  the  bill  to  the  payee  or  holder  thereof  when  the 
same  becomes  due.  The  drawee  is  therefore  no  party  to  the 
instrument  until  he  accepts  the  bill.  4  Having  funds  in  his 
hands  belonging  to  the  drawer,  it  is  his  duty  according  to  mer- 
cantile usage  to  honor  the  bill  by  accepting  it;  but  he  is  not 
legally  bound  to  do  so,  any  more  than  a  debtor  is  bound  to 
give  to  his  creditor  a  promissory  note  for  the  amount  due.  5 
If  he  has  been  supplied  with  funds  expressly  to  meet  the  bill, 
or  have  money  on  deposit  under  such  circumstances  as  to 
imply  a  contract  on  his  part  to  accept  the  draft,  he  owes  it  as 
a  duty  to  the  drawer  to  honor  the  bill ;  just  as  a  bank  or  a 

1  2  Denio,  115;  5  id.  639.  It  seems  not  to  have  been  decided  that  the  bank 
to  whom  a  bill  is  transmitted  for  collection  is  not  also  the  agent  of  the  owner 
of  the  bill.  Bank  of  Orleans  v.  Smith,  8  Hill,  560;  1  Kernan,  203. 

*  Downer  v  The  Madison  Co.  Bank,  6  Hill  R.,  648. 
1  Bayley  on  Bills,  ch.  6,  §  1. 

4  Chitty  on  Bills,  281. 

*  Story  on  Bills,  §  113,  117,  238.     "  We  hare  already  seen  that  it  U  the  duty 
of  the  drawee,  upon  whom  a  bill  is  regularly  drawn,  and  who  has  funds  appro- 
priated for  the  purpose  in  his  hands,  or  who  has  authorized  the  draft,  to  accept 
and  pay  the  bill  according  to  its  tenor." 


406  BILLS   OF  EXCHANGE  AND    PROMISSORY   NOTES. 

banker  is  bound  to  honor  and  pay  checks  drawn  by  customers 
on  a  cash  account,  i  But  the  drawee,  like  the  banker,  owes 
to  the  holder  of  the  bill  no  legal  duty  until  he  has  accepted 
or  agreed  to  accept  the  bill;  2  and  it  has  been  expressly 
adjudged  that  a  bill  of  exchange  does  not  give  to  the  holder, 
either  in  law  or  equity,  a  lien  upon  the  funds  of  the  creditor 
in  the  hands  of  the  debtor  until  an  acceptance  by  the  latter.  3 

Where  a  bank  is  the  drawee  of  a  check,  and  certifies  it  to 
be  good,  the  certificate  endorsed  upon  the  check  is  an  admis- 
sion that  it  is  drawn  on  funds,  and  an  undertaking  that  it  shall 
be  paid  on  presentment; — it  is  tantamount  to  an  acceptance 
of  the  draft.  Accordingly,  when  the  teller  of  a  bank,  having 
a  general  authority  to  certify  checks,  qualified  with  a  direction 
not  to  certify  them  without  funds  and  to  enter  them  in  a 
proper  book,  colludes  with  a  customer  of  the  bank  and  certi- 
fies his  cheek  in  violation  of  duty;  the  person  purchasing  the 
check  thus  certified  in  good  faith,  is  entitled  to  recover  there- 
on against  the  bank.  4 

The  act  of  certifying  the  check  to  be  good  imposes  upon 
the  bank  an  obligation  to  hold  a  sufficient  amount  of  the  funds 
of  the  drawer  to  meet  the  check;  5  and  it  seems  that  though 
the  agent  of  the  bank  be  guilty  of  a  fraud  towards  his  princi- 
pal, in  the  exercise  of  the  authority  entrusted  to  him,  the 
principal  is  nevertheless  answerable  to  a  bona  fide  holder,  on 
the  instrument.  The  object  of  certifying  the  check  is  to  give 
it  currency — is  to  induce  third  persons  to  accept  it  as  freely 
as  they  would  bills  of  the  bank;  and  hence  it  does  not  lie 
with  the  bank  to  assert,  that  though  the  bill  was  "  good  "  on 
the  day  it  was  certified,  it  has  since  become  worthless  by  the 
the  withdrawal  of  the  drawer's  funds.  Unless  the  certificate 

I  Marzetti  v.  Williams,  1  Barn,  and  Adol.,  415;  20  Eng.  Com.  Law  R.,  412. 
In  this  case  a  banker  was  held  answerable  in  an  action  of  tort,  for  not  honoring 
a  check  drawn  upon  a  cash  account. 

II  Chapman  v.  White,  2  Selden  R.,  412;  Cowperthwait  v.  Sheffield,  3  Comst. 
R.,  243;  Winter  v.  Drury.  1  Selden  R.,  525. 

•  Harris  v.  Clark,  3  Comst.  R.,  118,  243;  8  Eng.  L.  and  Eq.,  523. 

4  The  Farmer's  and  Mechanic's  Bank  of  Kent  Co.  v.  Butcher's  and  Drover's 
Bank,  4DuerR.,  219. 

*  Wjlletg  v.  The  Phoenix  Bank,  2  id.  121. 


ACCEPTANCE.  407 

be  .treated  as  a  contract  or  engagement  that  the  check  shall  be 
paid,  it  fails  to  answer  the  purpose  for  which  it  is  sought  and 
given,  i 

Where  there  is  no  local  statute  to  the  contrary,  it  is  a  set- 
tled rule  of  commercial  law  that  an  unconditional  promise 
in  writing  to  accept  a  bill  of  exchange,  if  made  within  a  rea- 
sonable time  before  or  after  the  date  of  the  bill,  describing  the 
same  in  terms  not  to  be  mistaken,  is  a  virtual  acceptance 
thereof,  in  favor  of  any  person  taking  the  bill  on  the  inspection 
and  credit  of  the  promise.  2  Such  a  promise  to  accept  is 
simply  a  contract  with  the  drawer  until  it  is  acted  upon  by  a 
third  person,  who  takes  the  bill  upon  the  faith  of  the  prom- 
ise. 3  Kent  Ch.  J. :  "Every  one  will  agree  that  an  accept- 
ance by  a  collateral  paper  may  be  good,  and  if  that  paper  be 
shown  to  a  third  person  so  as  to  excite  credit,  and  to  induce 
him  to  advance  money  on  the  bill,  such  third  person  ought 
not  to  suffer  by  the  confidence  excited."  4  Lord  Mansfield; 
"  there  is  no  cloubt  but  an  agreement  to  accept  may  amount 
to  an  acceptance,  and  it  may  be  couched  in  such  words  as  to 
put  a  third  person  in  a  better  condition  than  the  drawer.  If 
one  man,  to  give  credit  to  another,  make  an  absolute  promise 
to  pay  his  bill,  the  drawer,  or  any  other  person,  may  show 
such  promise  upon  the  exchange  to  get  credit;  and  a  third 
person  who  should  advance  his  money  upon  it,  would  have 
nothing  to  do  with  the  equitable  circumstances,  which  might 
subsist  between  the  drawer  and  acceptor."  5  And  the  supreme 

1  Masxay  v.  The  Eagle  Bank.  9  Mete..  311.  In  this  case  the  supreme  court 
of  Massachusetts  denied  the  authority  of  the  teller  to  bind  the  bank,  but  con- 
strued the  certificate  given  by  authority  as  an  engagement  that  the  check  was 
and  should  remain  good. 

«  Greele  v.  Parker,  6  Wend.  R.,  414;  S.  C.,  2  id.  645.  The  English  doc- 
trine is  slightly  different. 

*  Goodrich  v.  Gordon,  15  John.  R.,  6. 

4  McEvers  v.  Mason,  10  John.  R.,  207 ;  Coolldge  v.  Payson,  2  Wheaton,  66; 
Clarke  v.  Cock,  4  East,  60;  Wynne  v.  Raikes,  5  East,  514;  Milne  v.  Priest,  4 
Campb.,  393;  Wilson  v.  Clements,  8  Mass.,  1;  Storcr  v.  Logan.  9  id.  55; 
Boyce  v.  Edwards, 4  Peters,  111;  Carrollton  Bank  v.  Tayleur,  16  Louis.,  490; 
Vance  v.  Ward,  2  Dana,  95;  Carnegie  v.  Morrison,  2  Metcalf,  381,  406. 

*  Mason  v.  Hunt,  Doug.,  297.    In  order  to  make  the  promise  operate  as  an 
acceptance  it  must  be  accompanied  by  circumstances  such  as  to  induce  a  third 
person  to  take  the  bill,  Pierson  v.  Dunlop,  Cowp.,  571. 


408  BILLS  OF    EXCHANGE  AND    PROMISSORY  NOTES. 

court  of  the  United  States  have  decided  "  upon  a  review  of 
the  cases  which  are  reported,  that  a  letter  written  within  a 
reasonable  time  before  or  after  the  date  of  a  bill  of  exchange, 
describing  it  in  terms  not  to  be  mistaken,  and  promising  to 
accept  it,  is,  if  shown  to  the  person  who  afterwards  takes  the 
bill  on  the  credit  of  the  letter,  a  virtual  acceptance,  binding 
the  person  who  makes  the  promise."  i 

In  England,  by  statute  enacted  some  thirty-five  years  ago, 
no  acceptance  of  any  inland  bill  of  exchange  is  sufficient  to 
charge  any  person,  unless  made  in  writing  on  the  bill,  or  on 
a  part  of  it,  where  it  is  drawn  in  parts.  2  But  the  acceptance 
of  foreign  bills  is  left  to  the  regulations  of  the  law-merchant; 
under  which  it  has  been  held  that  a  promise  to  pay  a  bill  is 
equivalent  to  an  acceptance,  on  the  principle  that  where  a 
man  undertakes  for  the  substance,  he  undertakes  for  the 
formal  parts;  if  he  undertakes  to  pay  the  acceptance,  he 
undertakes  to  accept.  3  And  this  undertaking,  in  the  case  of 
an  existing  bill,  may  be  made  by  parol;  4  or  it  may  be  made 
by  letter,  and  will  be  valid  though  not  written  until  the  bill 
has  become  due  and  the  drawer  is  dead.  5  In  the  case  of  an 
ordinary  negotiation  for  the  sale  of  property,  which  the  owner 
has  offered  to  sell  on  certain  terms  by  a  letter  sent  to  a  distant 
place,  the  death  of  the  owner  before  the  writing  and  send- 
ing of  a  reply  accepting  the  proposition,  prevents  the  comple- 
tion of  the  contract.  6  Not  so  in  relation  to  a  letter  accepting 
a  bill,  that  is  negotiated  on  the  faith  of  the  letter  of  accept- 
ance. 7  Rightly  stated,  the  bill  is  in  the  initiatory  proposition, 
where  no  communication  precedes  it,  and  the  letter  of  reply 

1  Coolidge  v.  Payson,  2  Wheaton,  66. 

11 1  and  2  Geo.  4,  c.  78,  passed  July  2d,  1821. 

8  Fairlee  v.  Herring,  3  Bing,,  625,  decided  in  1826,  13  Eng.  Com.  Law  R., 
78. 

4  In  Fairlee  v.  Herring,  the  acceptance  was  by  parol. 

'Billing  v.  Devaux  and  another,  3  Manning  and  Granger,  565;  S.  C.,  42 
Eng.  Com.  Law,  297. 

•  Edwards  on  Bailm.,  122-124;  6  Wend.,  103;  1  Kernan  R.,  446. 

7  Billing  v.  Devaux  and  another,  decided  in  1841;  the  administrator  trans- 
ferred the  bill  to  the  plaintiff,  at  the  same  time  shewing  him  the  letter  of 
acceptance ;  and  the  plaintiff  recovered  notwithstanding  the  drawer  had  died 
insolvent. 


ACCEPTANCE. 


409 


promising  to  pay  the  bill  completes  the  contract  of  acceptance. 
And  hence,  it  is  not  material  whether  the  letter  of  acceptance 
reaches  the  drawer  before  or  after  it  becomes  due  and  paya- 
ble, i 

According  to  the  commercial  law,  where  it  is  not  modified 
by  special  enactments,  a  parol  acceptance  of  a  bill  of  exchange, 
whether  foreign  or  inland,  is  as  valid  and  binding  as  if  made 
in  writing.  2  But  in  England  a  parol  promise  to  accept  a  bill 
not  yet  drawn  does  not  amount  to  an  acceptance  of  it;  although 
the  bill  be  discounted  for  the  drawer  on  the  faith  of  such 
promise.  3  And  certainly  there  is  a  substantial  reason  of  pub- 
lic convenience  in  favor  of  this  doctrine;  for  if  a  verbal 
acceptance  is  held  valid,  so  that  a  bill  accepted  in  that  man- 
ner is  transferable  from  hand  to  hand,  the  instrument  in  that 
form  would  be  of  as  little  value  in  a  commercial  point  of  view 
as  an  ordinary  contract  for  the  payment  of  money.  But  this 
remark  does  not  apply  with  the  same  force  to  a  written  prom- 
ise to  acept  a  bill  of  a  particular  description;  for  here  it  is 
easy  to  attach  the  written  promise  to  the  bill,  in  such  a  way 
that  the  acceptance  may  accompany  and  give  currency  and 
credit  to  the  paper.  4 

The  Revised  Statutes  of  New- York  have  somewhat  modified 
and  considerably  improved  the  commercial  law,  in  regard  to 
the  acceptance  of  bills.  5  The  enactments  were  as  follows  : 

1  Wynne  v.  Raikes,  6  East,  514;  2  J.  P.  Smith,  98. 

*  Leonard  v.  Mason,  1  Wend.,  522;  Ward  v.  Allen,  2  Metcalf,  53,  and  id.  406. 

*  Bank  of  Ireland  v.  Archer,  11  Meeson  and  Welsby,  383,  decided  in  1848. 
Farke.  B.  "  The  point  reserved  by  my  brother  Colt  man  in  this  case  was. 
whether  a  parol  promise  to  accept  a  foreign  bill  of  exchange  before  it  was 
drawn,  amounted  to  an  acceptance,   such  promise  having  been  communicated 
to  the  indorsees,  the  plaintiffs,  and  the  bill  having  been  taken  by  them  on  the 
faith  of  it."     See  Ontario  Bank  v.  Worthington ,  12  Wend.,  593. 

4  See  the  opinion  of  Thompson,!  Ch.  J.,  in  Goodrich  v.  Gordon,  15  John. 
R.,  6,  13.  "  The  testimony  in  the  case  before  us  is  very  full  to  shew,  that  this 
letter  of  the  defendant  authorising  the  drawing  of  the  bill,  accompanied  it  at 
all  times,  and  that  it  was  upon  the  credit  of  that  letter  that  the  bill  was  taken 
by  the  plaintiff."  Kennedy  v.  Geddes,  8  Porter,  263. 

*  2  R.  S..  53,  §  6-10,  3d  ed.    These  statutes  took  effect  on  the  Erst  of  Janua- 
ry 1630. 

24 


410  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

§6.  No  person  within  this  state  shall  be  charged  as  art 
acceptor  on  a  bill  of  exchange,  unless  his  acceptance  shall  be 
in  writing,  signed  by  himself,  or  his  lawful  agent. 

§  7.  If  such  acceptance  be  written  on  a  paper,  other  than 
the  bill,  it  shall  not  bind  the  acceptor,  except  in  favor  of  a 
person  to  whom  such  acceptance  shall  have  been  shewn,  and 
who,  on  the  faith  thereof,  shall  have  received  the  bill  for  a 
valuable  consideration. 

§  8.  An  unconditional  promise  in  writing  to  accept  a  bill 
before  it  is  drawn,  shall  be  deemed  an  actual  acceptance,  in 
favor  of  every  person  who,  upon  the  faith  thereof,  shall  have 
received  the  bill  for  a  valuable  consideration. 

§  9.  Every  holder  of  a  bill,  presenting  the  same  for  accept- 
ance, may  require  that  the  acceptance  be  written  on  the  bill. 
A  refusal  to  comply  with  such  request,  shall  be  deemed  a 
refusal  to  accept,  and  the  bill  may  be  protested  for  non- 
acceptance. 

§10.  The  four  last  sections  shall  not  be  construed  to  impair 
the  right  of  any  person  to  whom  a  promise  to  accept  a  bill 
may  have  been  made,  and  who  on  the  faith  of  such  promise 
shall  have  drawn  or  negotiated  the  bill,  to  recover  damages 
of  the  party  making  such  promise,  on  his  refusal  to  accept 
such  bill. 

The  design  of  these  provisions  is  very  evidently  to  discour- 
age the  taking  of  separate  acceptances,  and  engagements  to 
accept;  for  where  anything  less  than  a  written  acceptance  on 
the  bill  is  taken,  the  instrument  is  left  encumbered  with  con- 
ditions and  qualifications  greatly  impairing  its  character  as  a 
negotiable  instrument.  For  instance,  the  party  taking  a  bill 
that  has  been  accepted  by  a  writing  on  a  separate  piece  of 
paper,  cannot  recover  thereon  against  the  acceptor  without 
shewing  that  he  took  the  bill  upon  the  faith  of  such  accep- 
tance and  gave  a  valuable  consideration  therefor,  i  He  must 
shew  that  the  existence  of  the  acceptance  was  disclosed  to  him 
at  the  time  he  took  the  bill,  that  he  acted  upon  the  faith  of  it, 
and  gave  value  for  the  bill.  2 

1  Ontario  Bank  v.  Worthington,  12  Wend.,  693. 
'  Bank  of  Michigan  y.  Ely,  17  Wend.,  608. 


ACCEPTANCE.  411 

The  acceptance  must  be  in  writing,  and  it  must  be  signed 
by  the  acceptor  or  by  his  agent,  i  According  to  the  law  mer- 
chant, any  words  written  by  the  drawee  on  a  bill,  not  putting 
a  direct  negative  upon  its  request,  such  as  "  accepted,"  "  pre- 
sented," "seen,"  the  day  of  the  month,  or  a  direction  to  a  third 
person  to  pay  it,  is  prima  facie  a  complete  acceptance.  2 

Under  the  statute,  the  acceptance  must  also  be  signed ;  but 
the  signature  of  the  drawee  written  across  the  face  of  the  bill, 
is  a  sufficient  writing  and  signing  to  satisfy  its  requirement.  3 
Under  the  English  statute  which  requires  the  acceptance  of 
inland  bills  to  be  made  in  writing  on  the  bill,  it  has  been  held 
that  an  acceptance  written  across  the  bill,  before  it  had  been 
signed  by  the  drawer  or  filled  up,  is  valid.  Lord  Ch.  J.  Tin- 
dal :  "  This  being  an  action  against  the  defendant,  as  the 
acceptor  of  the  bill, he  is  estopped  from  saying  that  he  accept- 
ed it  before  it  was  drawn."  4 

A  letter  of  credit  that  confers  an  absolute  authority  upon 
the  person  to  whom  it  is  addressed  to  draw  bills  upon  the 
writer,  is  an  unconditional  promise  in  writing  to  accept,  within 
the  meaning  of  the  eighth  section  of  the  statute  above  quoted.  5 
The  written  promise  to  accept  need  not  contain  a  particular 
description  or  identification  of  the  bill  to  be  drawn  :  it  is 
enough  that  it  be  drawn  in  pursuance  of  the  authority.  A 
bill  of  exchange  was  drawn  and  negotiated  to  the  plaintiff  on 
the  faith  of  a  letter  written  by  the  defendant  and  addressed  to 
the  drawer  in  these  words :  "  I  hereby  authorise  you  to  draw 

1  See  §  6.  above quoted;  Luff  v.  Pope,  5  Hill  R.,  418;  S.  C.,  7  Hill,  577. 

*  Baylcy  on  Bills,  ch.  6,  §  1;  Story  on  Bills,  §  243;  10  John.  R.,  207;  16  id.  6. 

*  Spear  v.  Pratt,  2  Hill,  582. 

4  Malloy  T.  Delves,  5  Moore  and  Payne's  R.,  275,  decided  in  1831.  The 
plaintiff  alleged  that  the  bill  was  drawn,  and  that  the  defendant  aftertcardi 
accepted  it  according  to  the  custom,  &c.,  but  this  was  held  immaterial,  and  it 
was  decided  that  the  plaintiff  need  not  give  any  evidence  to  shew  that  it  was 
the  custom  of  merchants  so  to  transact  business.  S.  C.,  4  Carr.  and  Payne, 
492. 

*  The  Ulster  Co.  Bank  v.  McFarlan,  6  Hill  R.,  432;  S.  C.,  3  Denio  R.,  553. 
There  was  no  dissenting  opinion  in  the  supreme  court,  while  in  the  court  of 
errors  Senator  Hand  alone  expressed  the  opinion  that  the  promise  was  not 
sufficient  because  not  definite  in  describing  the  bill  to  be  drawn.    See  17  Weud., 
608-  2  id.  545,  and  6  id.  414. 


412  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

on  me  at  ninety  days,  from  time  to  time,  for  such  amounts  as 
you  may  require,  provided  that  the  whole  amount  running 
and  unpaid  shall  not  exceed  three  thousand  dollars.  The 
above  letter  of  credit  to  be  good  and  binding  for  one  year  only 
from  this  date."  And  the  prevailing  opinions  delivered  in 
the  action  agree  in  holding  this  an  unconditional  promise  to 
accept  bills  drawn  in  conformity  with  its  terms,  and  hence  to 
be  deemed  an  actual  acceptance  of  them,  i 

Where  there  are  only  two  parties  to  a  letter  of  credit,  the 
writer  and  the  person  to  whom  it  is  addressed,  and  it  contains 
an  engagement  to  honor  bills  of  a  certain  description,  it  is 
clearly  a  virtual  acceptance  of  bills  drawn  in  the  manner  speci- 
fied. 2  Not  so  where  there  are  three  parties  to  the  transac- 
tion ;  as  wrhere  a  merchant  in  New- York  writes  a  letter  to  a 
firm  in  Liverpool,  opening  a  credit  in  favor  of  a  concern,  for 
a  given  amount,  to  be  negotiated  by  the  latter  in  Eio  de 
Janeiro,  by  drafts  on  the  firm  in  Liverpool.  The  writer  of 
such  a  letter,  who  concludes  it  by  assuring  the  firm  in  Liver- 
pool that  the  concern  doing  business  in  Rio  will  keep  them  in 
funds,  is  not  liable  to  a  third  person  to  whom  the  drafts  drawn 
in  the  manner  prescribed  are  transfered  on  the  faith  of  the 
letter;  for  the  letter  is  not  a  negotiable  instrument,  and  cannot 
therefore  be  acted  upon  by  any  one  else  except  the  house  to 
which  it  is  addressed.  3 

In  some  respects  the  Revised  Statutes  of  this  state  are  only 
a  legislative  declaration  of  the  law  as  it  stood  before  they 
were  enacted.  The  eighth  section  clearly  contains  nothing 
new :  it  implies  that  a  parol  promise  to  accept  a  bill  to  be 
drawn  in  future  is  not  to  be  deemed  a  virtual  acceptance  of 
it,  and  there  had  been  previous  decisions  to  the  same  effect.  4 

I  The  point  stated  in  the  text  was  fairly  involved  in  the  case  cited,  because 
the  action  was  brought  against  the  defendant  as  the  acceptor ;  but  the  suit 
turned  on  the  construction  of  the  letter,  the  court  holding  that  the  authority 
was  limited  to  bills  drawn  payable  ninety  days  after  sight.    3  Denio,  553. 

II  Russell  v.  Wiggin,  5  Law  Reporter,  533;  2  Mete..  381. 

3  Birckhead  v.  Brown,  5  Hill  R.,  634.     The  judgment  below  was  affirmed  in 
the  court  of  errors  by  a  vote  of  eleven  to  eleven,  but  there  was  difference  of 
opinion  in  the  latter  court  on  the  question  whether  a  third  person  could  acquire 
any  interest  in  the  letter  by  acting  on  the  faith  of  it.     2  Denio  R.,  375. 

4  Johnson  v.  Colling,  1  East,  98;  12  Wend.,  598. 


ACCEPTANCE.  413 

It  gives  effect  to  a  written  promise  to  accept  a  future  bill, 
when  the  bill  is  taken  upon  the  faith  of  the  promise  and  a 
consideration  is  paid  therefor;  and  the  same  rule  had  been 
previously  sanctioned  on  good  authority,  i  It  makes  the 
written  promise  an  actual  acceptance  only  when  taken  by  a 
third  person  for  value;  and  that  was  the  ground  on  which  it 
was  previously  held  tantamount  to  an  acceptance.  2 

While  as  between  the  drawer  and  the  drawee  a  written 
promise  to  accept  a  future  bill  has  never  been  held  a  virtual 
acceptance,  it  has  always  been  treated  as  a  valid  undertaking 
or  agreement;  3  and  the  tenth  section  quoted  above  declares 
that  the  previous  sections  are  not  intended  to  impair  or  take 
away  the  right  of  the  promisee  to  recover  damages  for  a  breach 
of  promise  to  accept.  So  that  where  there  is  a  valid  engage- 
ment to  accept,  the  party  to  whom  it  is  made  is  entitled  to 
recover  thereon,  as  for  the  breach  of  any  other  contract.  4 

The  distinction  between  an  action  on  a  bill,  as  an  accepted 
bill,  and  one  founded  on  a  breach  of  promise  to  accept, 
deserves  attention.  To  maintain  the  former,  the  promise  must 
be  applied  to  the  particular  bill  alleged  to  have  been 
accepted.  In  the  latter,  the  evidence  may  be  of  a  more  gene- 
ral character,  and  the  authority  to  draw  may  be  collected 
from  circumstances,  and  extended  to  all  bills  coming  fairly 
within  the  scope  of  the  promise. 

There  is  a  marked  difference  between  the  English  and 
American  doctrine  on  the  subject  of  collateral  acceptances. 
According  to  the  law  of  England,  a  promise  in  writing  to 
accept  a  non-existing  bill  is  not  equivalent  to  an  acceptance 
of  it.  It  is  merely  a  contract  made  by  the  party  promising 

'Goodrich  v.  Gordon,  15  John.  R,6;  2  Wend.,  648,  "A  promise  to 
accept  a  bill  thereafter  to  be  drawn,  specifying  the  amount  and  time  of  pay- 
ment, so  as  to  leave  no  reasonable  doubt  as  to  the  identity  of  the  bill  intended 
to  be  accepted,  is,  if  shewn  to  a  third  person,  who,  on  the  faith  of  such  promise, 
takes  the  bill  for  a  valuable  consideration,  in  point  of  law.  an  acceptance  bind- 
ing the  person  who  makes  the  promise."  Not  so  where  the  bill  is  not  taken 
on  the  faith  of  the  promise,  10  John.  R.,  207. 

*  Ontario  Bank  v.  Worthington,  12  Wend.,  693;  Mason  v.  Hunt,  Doug.,  296. 

*  Idem,  and  Story  on  Bills.  §  249. 

4  Boic«  &.  Henry  v.  Edwards,  4  Peters'  Rep.,  11 1.  Per  Mr.  Justice  Thomp- 
son, 4  Peters,  122. 


414  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

with  the  party  to  whom  the  promise  is  made,  i  The  rule  as 
settled  in  this  country,  and  already  stated  as  the  rule  of  com- 
mercial law,  holds  a  written  promise  to  accept  a  bill  not  yet 
drawn  a  virtual  acceptance  of  it  in  favor  of  a  person  who 
afterwards  takes  the  bill  on  the  credit  of  the  promise.  2  It 
is  not  a  virtual  acceptance  unless  acted  upon  by  a  third  per- 
son; that  is  to  say,  it  is  not  of  itself  equivalent  to  an  accep- 
tance. But  where  a  person  takes  the  bill  on  the  strength  of 
the  promise,  and  pays  value  for  it,  the  law  does  not  permit 
the  promisor  to  say  that  he  has  not  given  credit  to  the  bill.  3 
On  the  other  hand,  if  no  person  has  taken  the  bill  on  the  faith 
of  the  promise  to  accept,  there  is  no  reason  why  the  drawer 
should  not  be  left  to  his  action  on  the  contract  to  accept. 
Indeed,  courts  have  latterly  leaned  very  much  against  extend- 
ing the  doctrine  of  implied  acceptances,  so  as  to  sustain  an 
action  upon  the  bill;  prefering  rather  to  leave  the  parties  to 
the  rights  and  remedies  and  liabilities  growing  out  of  the 
engagement  into  which  they  have  entered.  Following  this 
leaning  of  the  authorities,  Mr.  Justice  Story  maintains  that 
the  doctrine  is  not  applicable  to  bills  drawn  payable  at  so 
many  days  after  sight :  and  whatever  may  be  thought  of  the 
argument  by  which  he  sustains  the  distinction  between  such 
bills  and  those  drawn  payable  on  demand  or  a  certain  time 
after  date,  all  must  agree  with  him  that  an  undertaking  to 
accept  is  a  very  different  contract  from  the  acceptance  of  a 
bill.  4 

1  Russell  v.  Wiggin,  2  Story  C.  C.  R.,  214,  opinion  of  Sir  Frederick  Pollock; 
Bank  of  Ireland  v.  Archer,  11  Mees.  and  Welsby.  383,  is  cited  to  the  same 
effect.  But  in  the  latter  case  the  point  decided  is,  that  a  parol  promise  to 
accept  a  bill  not  yet  drawn  is  not  an  acceptance  of  it. 

*  Coolidge  v.  Payson,  2  Wheat.,  75;  1  Peters'  Rep.,  284;  4  id.  121;  Storer 
T.  Logan,  9  Mass.,  55;  Banorger  v.  Hovey,  5  Mass.,  23;  Wallace  v.  Agry,  4 
Mason,  336;  3  Denio,  553;  Grant  v.  Shaw,  16  Mass.,  341. 

*  Greele  v.  Parker,  2  Wend.,  545j  5  Wend.,  414;  9  Mass.,  55. 

4  Wildes  v.  Savage,  1  Story  C.  C.  R.,  28.  Mr.  Story,  J.  :  "  But  it  does  not 
appear  to  me  that  the  doctrine  was  ever  applicable,  or  could  be  applied,  to  any 
bills  of  exchange,  except  such  as  were  payable  on  demand,  or  at  a  fixed  time 
after  date.  Where  bills  are  drawn  payable  at  so  many  days  after  sight,  it  is 
impracticable  to  apply  the  doctrine;  for  there  remains  a  future  act  to  be  done, 
the  presentment  and  sight  of  the  bill,  before  the  period,  for  which  it  is  to  run 


ACCEPTANCE.  415 

It  seems  that  the  principal  object  of  the  Revised  Statutes  of 
this  state,  which  have  been  adopted  in  the  main  in  several 
other  states  of  the  Union,  is  to  obviate  the  inconvenience  of 
the  former  rule,  that  gave  effect  to  a  parol  acceptance.  1 

It  is  scarcely  necessary  to  say  that  an  engagement  to  accept 
must,  like  all  other  contracts,  be  supported  by  a  valid  consid- 
eration. 2  In  this  respect,  it  differs  from  an  acceptance;  3  and 
shews  itself  to  be  a  distinct  species  of  contract.  If  the  holder 
presents  a  bijl  payable  at  sight,  and  the  drawee  declines  to 
pay  it,  alleging  that  he  has  not  funds,  but  says  he  will  pay  it 
at  the  beginning  of  the  next  quarter,  and  the  holder  does  not 
accede  to  the  promise,  the  offer  to  pay  does  not  amount  to  an 

1  Spear  v.  Pratt,  2  Hill,  582.  For  the  statutes  of  the  different  states  on  the 
subject  see  note  on  former  page. 

1  Strohecker  v.  Cohen,  1  Speers,  349. 

1  Raborg  v.  Peyton,  2  Wheat.,  386 ;  9  Mass.,  60.  The  law  implies  a  sufficient 
consideration  to  support  the  acceptance,  and  hence  it  is  not  within  the  statute 
of  frauds. 


and  at  which  it  is  to  become  payable,  can  commence,  whether  it  be  accepted  or 
dishonored.  How  can  the  time  be  calculated  upon  such  a  bill  before  it  is  pre- 
sented ?  If  a  letter  is  written,  promising  to  accept  a  non-existing  bill,  to  be 
thereafter  drawn  at  six  months  sight,  when  is  the  acceptance  to  be  deemed 
made  ?  At  the  date  of  the  bill  ?  Certainly  not;  for  that  would  be  at  war  with 
the  obvious  intent  of  the  parties,  which  plainly  is,  that  the  acceptance  shall  be 
on  a  future  sight  of  the  bill.  If  it  is  said  that  the  acceptance  is  to  be  treated 
as  made  when  the  bill  is  actually  presented  for  acceptance,  and  it  is  dishonored 
by  the  drawee,  it  is  plain  that  we  set  up  a  prior  intent  or  promise  against  the 
fact.  Upon  what  ground  can  a  court  say,  when  a  party  promises  to  do  an  act 
in  future,  such  for  example  as  to  accept  a  bill  when  it  shall  be  drawn  and  pre- 
sented to  him  at  a  future  time,  that  his  promise  overcomes  his  act  at  that 
time  ?  That  his  refusal  to  perform  his  promise  amounts  to  a  performance  of 
it  ?  It  is  quite  another  question,  whether  the  holder,  who  has  taken  such  a 
bill  upon  the  faith  of  such  promise,  may  not  have  some  other  remedy,  either 
at  law  or  in  equity,  for  the  breach  of  it,  against  the  promisor.  My  judgment 
is,  that  the  doctrine  of  a  virtual  acceptance  of  a  non-existing  bill,  by  a  prior 
promise  to  accept  it,  when  drawn,  has  no  application  to  a  bill  drawn  payable 
at  some  fixed  period  after  sight ;  for  it  then  amounts  to  no  more  than  a  pro- 
mise to  do  a  future  act.  I  have  looked  into  the  authorities;  and  I  do  not  find 
in  any  one  of  them,  that  the  bill  drawn,  and  to  which  the  doctrine  was  applied, 
was  a  bill  drawn  payable  at  or  after  sight.-'  Russell  v.  Wiggiu,  2  Story  C.  C. 
R.,  214,  decided  in  1842. 


416  BILLS    OF   EXCHANGE  AND    PROMISSORY  NOTES. 

acceptance;  i  nor  is  it  an  agreement  of  any  kind.  2  So  where 
the  drawee  says  to  a  stranger,  "  I  must  pay  the  bill,  or  shall 
have  to  accept  and  pay  it,"  such  conversation  not  being 
addressed  to  the  holder  amounts  to  nothing.  3 

There  is  a  class  of  cases  in  which  no  formal  acceptance 
is  necessary  in  order  to  charge  the  drawee  —  a  class  in 
which  the  act  of  drawing  the  bill  is  in  itself  an  acceptance. 
Thus,  where  a  person  draws  a  bill  upon  himself,  or  does  not 
address  it  to  any  one,  it  is  to  be  regarded  as  an  accepted 
bill.  As  drawer  he  undertakes  that  it  shall  be  accepted 
and  paid,  and  it  would  be  an  idle  ceremony  to  require  it  to 
be  presented  for  acceptance.  4  So,  the  act  of  drawing  a 
bill  of  exchange,  by  one  partner  in  his  own  name,  upon  the 
firm  of  which  he  is  a  member,  for  the  use  of  the  partnership 
concern,  as  for  the  purchase  of  goods,  is  in  contemplation  of 
law  an  acceptance  of  the  bill  by  the  drawer  in  behalf  of  the 
firm;  and  the  holder  of  the  bill  may  sustain  an  action  thereon 
against  the  firm  as  on  an  accepted  bill.  5  The  same  rule  has 
been  applied  to  a  bill  drawn  by  one  upon  another  officer  of 
the  same  corporation.  "  The  instrument  offered  in  evidence 
in  this  case,  was  in  the  form  of  a  bill  of  exchange.  It  was 
drawn  by  the  corporation,  under  the  signature  of  the  presi- 
dent and  secretary,  by  order  of  the  board  of  trustees,  who  by 
the  act  under  which  the  corporation  was  organized,  were  the 
managers  of  its  concerns  and  had  control  over  its  funds  in  the 
hands  of  its  treasurer.  It  was  drawn  upon  the  treasurer  of 
the  corporation,  who  was  but  the  officer,  the  agent  of  the  cor- 
poration, and  whose  acceptance  must  have  been  considered 
the  acceptance  of  the  corporation.  It  was,  then,  a  bill  drawn 
by  the  corporation  through  its  proper  officers  upon  the  same 
corporation,  represented  by  another  officer;  in  other  words  a 
bill  drawn  by  the  corporation  on  itself."  So  that  no  demand 

1  Peck  v.  Cochran,  7  Pick.  R.,  34.  , 

*  Corning  v.  Colt,  5  Wend.,  523.    An  unaccepted  offer  can  never  be  made 
the  basis  of  an  action.     Bruce  v.  Pearson,  3  John.  R.,  534. 

*  Martin  v.  Bacon,  2  South  Car.  R.,  132. 

4  Cunningham  v.  Wardell,  12  Maine  R.,  466,  decided  in  1835;  Lent  v.  Hodg- 
man,  15  Barb.,  274. 

*  Dougal  v.  Cowles  &  Smith,  5  Day  (Conn.)  R.,  611,  decided  in  1813. 


ACCEPTANCE.  417 

of  payment  or  notice  of  non-payment  need  be  shewn,  i     In 
legal  effect  such  a  bill  is  a  promissory  note.  2 

If  the  drawee  of  a  bill  to  whom  the  same  is  delivered  for 
acceptance  destroys  it  or  refuses  to  return  it  within  twenty- 
four  hours,  accepted  or  non-accepted,  he  is  deemed  to  have 
accepted  the  bill.  3  The  holder  has,  under  the  ninth  section 
of  the  above  statute,  a  right  to  require  a  written  acceptance 
on  the  bill,  and  where  that  is  refused  should  protest  it  for 
non-acceptance.  The  commercial  law  is  substantially  the 
same,  though  not  quite  so  explicit.  4  Lord  Ellenborough,  in 
a  case  tried  before  him  at  Nisi  Prius,  where  it  appeared  that 
the  drawee  had  destroyed  the  bill,  held  this  language;  "the 
person  on  whom  a  bill  of  exchange  is  drawn,  when  it  is  pre- 
sented to  him  for  acceptance,  ought  to  determine  whether  he 
will  accept  it  or  not;  and  if  he  determine  not  to  accept  it,  he 
is  bound  to  return  it;  for  the  party  is  entitled  to  the  immedi- 
ate use  of  the  thing,  and  if  the  drawee  deprive  him  of  the 
use  of  the  instrument  by  destroying  it,  he  is  liable  as  if  he 
had  written  his  name  upon  it."  5  The  King's  bench,  though 
not  expressly  dissenting  from  the  rule  laid  down  on  the  trial, 
agreed  that  it  was  not  applicable  in  the  case,  where  the  holder 
had  left  the  bill  in  the  hands  of  the  drawee  a  considerable 
length  of  time  without  calling  for  it,  and  the  acceptance  had 
been  refused  before  it  had  been  destroyed.  6  In  another  case 
•where  the  bill  had  been  sent  to  the  drawee  in  a  letter,  with  a 
request  that  he  would  accept  and  return  it,  and  he  detained 
the  bill  some  three  months  until  it  became  due,  it  was  held 

1  Hasey  T.  White  Pigeon  Beet  Sugar  Company,  1  Douglass  (Mich..)  R.,  193. 
Opinion  delirered  by  Mr.  Justice  Felch,  at  the  July  term,  1843;  see  13  Barb. 
R.,  636.     The  rule  cannot  of  course  apply  where  the  bill  is  not  add r< 
the  drawee  as  agent.    Ilalstcd  v.  The  Mayor,  8tc.,  of  New-York,  5  Barb.  R.. 
218. 

*  Roach  v.  Ostler,  1  Man.  and  Ry.,  120;  15  Barb.,  274. 

*  2  R.  S.,  53,  3d  ed.  §  11,  quoted  in  a  former  part  of  this  chapter. 
«  Bayley  on  Bills,  ch.  6,  §  1,  p.  110,  111,  11-'. 

*  Jennc  v.  Ward,  2  Stark,  289. 

'  1  Bar.  and  Aid.,  653.  Two  of  the  judges,  Lord  Ellcnborongh  and  Holroyd, 
affirmed  the  doctrine  laid  down  at  nisi  prius,  and  justices  Abbott  and  Bayley 
held  the  contrary. 


418  BILLS  OF   EXCHANGE  AND    PROMISSORY    NOTES. 

an  acceptance.  1  Upon  principle,  a  refusal  to  return  a  bill 
accepted  is  not  the  same  thing  as  accepting  it;  for  the  act  of 
acceptance  is  not  complete  until  the  bill  has  been  returned  to 
the  holder.  Until  that  has  been  done  the  drawee  has  an 
opportunity  of  changing  his  mind,  and  a  right,  if  he  has 
written  an  acceptance  upon  it,  to  erase  it  and  dishonor  the 
bill.  2  It  is  no  doubt  equitable  enough  to  hold  the  tortious 
act  of  destroying  or  appropriating  the  bill  equivalent  to  an 
acceptance;  but  the  one  is  not  a  contract,  while  the  other  is 
that  and  nothing  else.  But  if  the  holder  gives  the  drawee  to 
understand  that  he  will  consider  the  detention  of  the  bill  as 
tantamount  to  an  acceptance,  and  he  afterwards  destroys  or 
refuses  to  return  it,  this,  it  has  been  held,  is  sufficient  evidence 
of  an  acceptance.  3  The  mere  detention  of  a  bill  that  has 
been  sent  to  the  drawee  by  mail,  for  acceptance,  with  the  view 
of  waiting  for  funds  or  securities  to  be  forwarded  by  the 
drawer,  is  not  an  implied  acceptance;  4  for  here  the  retention 
of  the  bill  is  consistent  with  the  rights  of  both  parties,  unless 
the  holder  chooses  to  ask  for  the  immediate  return  of  the  bill. 
Where  the  holder  leaves  a  bill  of  exchange  for  acceptance,  in 
the  ordinary  course  of  commercial  transactions,  it  is  his  duty 
to  call  for  it  within  a  reasonable  time,  so  as  to  ascertain  whether 
it  has  been  accepted  or  not;  and  if  he  does  not  call  for  the 
bill  within  a  reasonable  time,  there  is  no  ground  upon  which 
to  raise  or  imply  an  engagement  to  accept  or  a  contract  of 
acceptance.  5 

When  no  words  of  restraint  or  limitation  are  used  in  an 
acceptance,  it  is  as  we  have  seen  an  absolute  engagement  to 

1  Harvey  v.  Martin,  1  Campb.,  425.  But  it  appeared  in  this  case  that  the 
drawee  had  intended  to  pay  the  bill.  See  6  East,  200. 

3  Cox  v.  Troy,  5  B.  and  Aid.,  474. 

*  1  Campb.,  425.  The  holder  has  a  right  to  require  a  return,  and  it  is  but 
reasonable  that  he  should  be  allowed  to  say  upon  what  terms  another  man  is 
at  liberty  to  detain  his  property. 

4  Mason  v.  Barff,  2  Barn,  and  Aid.,  26 

6  Jenne  v.  Ward,  1  Barn,  and  Aid.,  654,  per  Mr.  J.  Bayley.  If  the  drawee 
refuses  to  return  or  destroy  a  bill  under  such  circumstances  as  do  not  amount 
to  an  acceptance,  the  owner  undoubtedly  has  a  remedy  by  an  action  of  tort  for 
the  injury.  Story  on  Bills,  §  248. 


ACCEPTANCE.  419 

pay  in  money  according  to  the  tenor  and  effect  of  the  bill;  it 
is  an  absolute  or  general  acceptance. 

The  bill  itself  cannot  be  drawn  payable  on  a  contingency; 
but  the  drawee  being  desirous  not  entirely  to  dishonor  it, 
sometimes  makes  what  is  called  a  conditional  acceptance,  that 
is  to  say,  he  accepts  to  pay  the  bill  on  the  happening  or  per- 
formance of  certain  conditions,  i  And  this  conditional  accept- 
ance becomes  absolute,  as  soon  as  its  conditions  are  perform- 
ed. 2  The  holder  is  not  bound  to,  nor  can  he  generally 
speaking,  safely  receive  such  an  acceptance;  but  if  he  do  take 
such  an  acceptance,  he  mnst  abide  by  its  terms.  3 

An  acceptance  varying  from  the  tenor  of  the  bill,  either  in 
the  sum,  the  time,  the  place  or  mode  of  payment,  is  condi- 
tional. 4  In  respect  to  the  sum,  it  has  been  held  that  an 
acceptance  for  a  part  of  the  amount  required  to  be  paid,  is 
good  according  to  the  custom  of  merchants,  and  will  bind  the 
acceptor.  5  So,  an  acceptance  to  pay  at  a  different  time  or 
place,  or  in  a  different  manner  from  that  specified  in  the  bill, 
binds  the  acceptor  according  to  the  terms  of  his  engagement.  6 

Take  a  few  adjudged  cases  by  way  of  illustration :  A  bill 
is  drawn  on  the  defendant  without  specifying  any  time  of 
payment,  and  he  accepts  to  pay  some  four  months  afterwards; 
the  acceptance  is  good  within  the  custom.  7 

A  bill  is  drawn,  as  usual,  for  the  payment  of  a  certain  sum 
of  money,  and  the  acceptance  is  to  pay  half  in  money  and 
half  in  bills;  held  a  good  acceptance  if  the  holder  chooses  to 
take  it.  s 

1  Bylea  on  Bills,  149;  Chitty  on  Bills,  800;  Story  on  Bills,  §  239. 

*  Pie-son  v.  Dunlop.  Cowp..  671 ;  4  Campb.,  393 ;  Banbury  v.  Lissett,  Str.,1211. 

*  Gammon  v.  Scbmoll,  6  Taunt.,  353;  1  Marsh.,  80.    Per  Curiam  :  "A 
man  is  not  bound  to  receive  a  limited  and  qualified  acceptance ;  he  may  refuse 
it  and  resort  to  the  drawer;  but  if  he  does  receive  it  be  mnst  conform  to  the 
terms  of  it."    Parker  v.  Gordon,  7  East.  387;  13  Barb.,  636. 

4  Bayley  on  Bills,  ch.  6.  §  1;  8  Kent's  Com.,  84. 

*  Wegerstoffe  v.  Keene,  Str.,  214.    The  bill  was  for  127/ 18«  4d,  accepted  to 
pay  100/.    Douglass  v.  Wilkcson.  6  Wend..  642. 

*  Walker  v.  Attwood,  11  Mod.,  190.    No  time  of  payment  was  specified,  and 
the  drawee  accepted  to  pay  four  months  afterwards. 

MO  Mod.,  190. 

*  Petit  v.  Benson,  Comb.,  452. 


420  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

A  bill  is  drawn  on  the  defendant,  and  he  accepts,  to  pay 
when  certain  goods  consigned  to  him  are  sold,  or  when  in 
cash  for  the  cargo  of  a  certain  ship;  and  he  is  liable  thereon 
as  soon  as  the  event  happens  upon  which  he  undertook  to  pay.  i 
But  where  the  defendant  accepted  a  bill  of  exchange  upon 
condition  that  he  sold  certain  goods  of  the  drawer  before  the 
bill  became  due,  and  the  goods  were  attached  by  a  creditor 
of  the  drawer  in  the  hands  of  the  acceptor  before  they  were 
sold;  it  was  adjudged  that  the  defendant  was  not  bound  by 
his  acceptance.  2 

The  contract  of  a  person  who  accepts  an  order  to  pay  a 
given  sum  out  of  a  certain  fund,  is  similar  to  that  of  the 
drawee  where  he  accepts  a  regular  bill  specially  to  pay  out  of 
a  given  fund,  3  Thus,  where  the  order  is  to  pay  two  hun- 
dred dollars  out  of  the  first  moneys  received  on  a  particular 
account,  an  acceptance  of  it  binds  the  acceptor  to  pay,  from 
time  to  time,  on  request,  as  the  moneys  are  received.  4  So, 
where  an  order  was  drawn  for  seven  hundred  dollars,  if  in 
funds,  and  accepted  generally,  the  court  say;  "as  the  order 
was  contingent,  on  the  fact  of  having  funds,  it  is  not  a  bill  of 
exchange,  nor  has  it  the  properties  of  such  an  instrument. 
But  as  the  order  w-as  drawn  on  the  funds  in  the  hands  of  the 
acceptors,  after  their  acceptance,  they  cannot  allege  a  want 
of  consideration.'^  If  the  order  be  drawn  for  a  fixed  sum, 
payable  in  the  goods  of  the  drawer  or  in  the  proceeds  thereof, 
the  acceptance  though  absolute  in  its  terms  only  binds  the 
acceptor  to  pay  in  the  goods  of  the  drawer  or  in  the  proceeds 
thereof;  so  that  in  such  a  case  it  is  necessary  for  the  payee 
named  in  the  order  to  aver  and  prove  that  the  acceptor  had 
in  his  hands  goods  or  the  proceeds  of  them,  belonging  to  the 
drawer,  equal  to  the  amount  ordered  paid.  6  Where  the  order 

1  Smith  v.  Abbott,  Str.,  1152;  Julian  v.  Shobrooke,  2  Wils.,  9. 
8  Browne  &  Co.  v.  Coit,  1  McCord  (So.  Car.,)  R.,  403. 

•  2  Mete.,  368. 

4  Perry  v.  Harrington,  2  Metcalf,  368.  A  factor  accepts  an  order  payable 
"  when  in  funds,"  and  is  bound  to  pay  out  of  the  first  funds  that  come  into  his 
hands  belonging  to  the  drawer.  Hunter  v,  Ingraham,  1  Strobhart,  271. 

6  Kemble,  Jewett  &  Co.  v.  Lull  &  Draper,  3  McLean,  C.  C.,  272. 

*  Atkinson  v.  Manks,  1  Cowen  R.,  691. 


ACCEPTANCE.  421 

is  absolute  in  its  terms,  being  in  law  a  bill  of  exchange,  a  con- 
sideration for  the  acceptance  is  implied;  not  so  where  an  order, 
not  amounting  to  a  bill  of  exchange,  is  accepted  by  the  drawee,  i 
The  same  rule  of  pleading  and  proof  applies  as  in  the  case  of 
a  note  payable  in  specific  articles;  if  the  contract  does  not  on 
its  face  purport  to  have  been  made  for  a  valuable  considera- 
tion, or  a  copy  of  it  is  not  set  forth  in  the  complaint  when  it 
appears  to  have  been  founded  on  a  good  consideration,  the 
plaintiff  must  aver  and  prove,  as  in  ordinary  cases,  facts  shew- 
ing a  cause  of  action.  -2  If  the  note  appear  on  its  face  to  have 
been  given  for  value  received,  a  particular  consideration  need 
not  be  avered:3  and  so,  without  doubt,  an  order  for  the  pay- 
ment of  money  out  of  a  given  fund  may  be  so  drawn  that  a 
general  acceptance  of  it  will  be  an  admission  that  the  fund  is 
sufficient,  and  also  an  engagement  to  pay  the  amount  directed 
to  be  paid.  4 

Where  a  note  or  draft  is  given  "  for  value  received  "  for  a 
definite  sum  of  money  payable  in  specific  articles,  it  is  only 
necessary  for  the  payee  in  the  first  instance,  to  aver  and  prove 
the  execution  of  the  note,  or  the  acceptance  of  the  draft 
according  to  its  terms.  5 

It  is  not  material  in  what  manner  the  acceptance  of  a  bill 
of  exchange  is  drawn  or  made :  it  is  to  be  construed  like  any 

1  Idem.  In  this  case  Booth,  a  manufacturer  in  England,  gave  Atkinson  an 
order  on  Manks,  a  commission,  merchant  in  New-York,  for  1642/  sterling  pay- 
able in  the  goods  of  Booth,  or  the  proceeds  thereof,  and  the  opinion  of  the 
late  court  of  errors  expressed  by  Justice  Sutherland,  proceeded  on  the  princi- 
ples stated  in  the  text.  Newhall  v.  Clark,  8  Cush.,  876.  An  order  to  pay 
"  oat  of  the  amount  to  be  advanced  to  me  the  drawer,  when  the  houses  I  am 
now  erecting  on  your  land,  in  Erie  street,  are  so  far  completed  as  to  have  the 
plastering  done  acccording  to  our  contract,"  accepted  by  the  drawee,  is  an 
undertaking  by  him  dependent  and  contingent  upon  the  completion  of  the 
work  in  the  manner  specified;  and  if  the  work  be  never  done,  the  acceptor  is 
not  liable  thereon.  See  4  Comst.  R.,  208,  Moss  v.  Livingston. 

1  Jerome  v.  Whitney,  7  John.  R.,  821. 

'7  John.  R.,321;  Saxton  v.  Johnson,  10  John.  R..  418;  Lee  T.  Swift,  1 
Denio,  665. 

4  3  McLean  C.  C.  R.,  272. 

*  Crandall  v.  Bradley,  7  Wend.,  311.  Payment  is  a  defence  to  be  interposed 
by  the  defendant.  Smith  Y.  Smith,  2  John.  R..  235;  4  Wend.  R.,  675. 


422  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

other  writing.  A  bill  was  drawn  on  the  strength  of  a  con- 
signment of  goods  made  to  the  drawee,  and  the  bill  arrived 
and  was  presented  for  acceptance  and  refused  before  the  bills 
of  lading  and  invoices  came  to  hand,  and  the  drawee  after 
their  arrival  called  upon  the  agent  of  the  holders  and  prom- 
ised them  that  if  they  would  get  the  bill  back  he  would 
accept  and  pay  it,  and  they  did  so,  and  this  promise  was  held 
valid  and  binding,  i  But  an  offer  to  pay  a  bill  if  presented  at 
a  future  day  named,  not  accepted  by  the  holder,  is  not  an 
acceptance  of  the  bill :  2  on  the  other  hand,  if  the  holder  of  a 
draft  which  is  in  legal  effect  payable  at  sight,  is  content  to 
receive  from  the  drawee  on  presenting  it  for  acceptance  a 
promise  to  pay  the  bill  at  a  subsequent  day  named,  this  is  a 
good  acceptance;  and  in  an  action  thereon  it  is  not  necessary 
to  aver  or  prove  a  presentment  for  payment  at  the  time  agreed 
upon.  3 

Where  bills  are  drawn  against  shipments  of  goods  by  virtue 
of  a  letter  of  authority  specifying  the  condition  on  which  the 
writer  will  accept,  the  person  taking  the  bills  on  the  faith  of 
the  letter  cannot  recover  unless  the  party  drawing  the  bills 
pursues  and  conforms  to  the  terms  of  the  authority  given  : 
the  terms  named  are  in  the  nature  of  a  condition.  4  And  if  the 
bills  are  not  drawn  in  the  manner  specified,  the  holder  of 
them  cannot  recover  thereon  against  the  person  giving  the 
authority  to  draw.  5 

In  Louisiana,  where  a  bill  of  exchange  is  drawn  on  a  ship- 
ment, payable  a  certain  number  of  days  after  sight,  and  is 
sold  with  the  bill  of  lading  appended  to  it,  the  holder  of  the 
bill  cannot  in  the  absence  of  any  local  usage  to  the  contrary, 
or  of  the  imminent  insolvency  of  the  drawee,  require  the 
latter  to  accept  the  bill  but  on  the  delivery  of  the  bill  of 
lading;  and  where  in  consequence  of  the  holder's  refusal  to 

1  Grant  v.  Shaw,  16  Mass.  R.,  341. 

'Peck  v.  Coehran,  7  Pick.  R.,  35. 

'  Clarke  v.  Gordon,  3  Richardson  (So.  Car.,)  R.,  311.    This  case  involved 
the  question  so  elaborately  discussed  in  Rowe  v.  Young,  2  Brod.  and  Bing. 
156. 

4  Murdock  v.  Mills,  11  Metcalf  R.,  5, 

*  The  Ulster  Co.  Bank  v.  McFarlan,  3  Denio.  553;  S.  C.,  6  Hill,  432. 


ACCEPTANCE.  423 

deliver  the  bill  of  lading,  acceptance  is  refused  and  the  bill 
of  exchange  protested,  the  protest  will  be  considered  as  made 
without  cause  and  the  drawer  will  be  discharged.  Though 
drawn  in  terms  absolute,  such  an  instrument  is  not  strictly  a 
bill  of  exchange,  i  In  a  similar  transaction  that  took  place 
in  this  state,  it  has  been  adjudged  that  the  delivery  of  a  for- 
warder's receipt  or  bill  of  lading  to  a  bank  as  security  for  the 
acceptance  of  a  draft  drawn  on  the  consignee,  on  discounting 
the  same  for  the  drawer,  is  a  valid  transfer  or  pledge  of  the 
cargo  to  the  holder  of  the  draft.  2  The  case  was  briefly  this : 
the  owner  of  a  quantity  of  flour,  delivered  the  same  to  a  for- 
warder at  Rochester,  and  took  a  receipt  expressing  that  the 
flour  was  to  be  sent  to  the  defendant  at  Albany;  the  defendant 
being  the  factor  to  whom  the  owner  usually  consigned  flour 
for  sale,  and  to  whom  he  was  at  the  time  indebted  for  advances 
on  previous  consignments :  the  owner  on  the  same  day  drew 
upon  the  defendant  against  the  flour  and  procured  the  plain- 
tiff's bank  at  Rochester  to  discount  the  draft  on  delivering  to 
the  bank  the  forwarder's  receipt  and  agreeing  that  the  bank 
might  hold  it  as  security  for  the  acceptance  of  the  draft;  the 
bank  then  forwarded  the  draft  with  the  receipt  pinned  to  it, 
to  their  collecting  agent  in  Albany,  and  he  presented  the  same 
to  the  defendant  for  acceptance;  the  defendant  took  off  the 
receipt  and  retained  it,  and  refused  to  accept  the  draft;  after 
that  he  received  the  flour  and  having  appropriated  it  with 
knowledge  of  the  circumstances,  was  held  liable  for  it  to  the 
plaintiffs  in  an  action  of  trover.  3  A  similar  decision  has 
been  made  in  Massachusetts  on  substantially  the  same  state  of 
facts.  4 

1  Lanfear  v.  Blossraan,  1  Louis.  Ann.  R.,  148,  decided  in  1846. 

1  The  Bank  of  Rochester  v.  Jones,  4  Comst.  R.,  497;  S.  C.,  4  Denio  R.,  489. 
The  supreme  court  held,  first,  that  there  was  no  sale  of  the  flour  to  the  plain- 
tiffs; second,  that  the  flour  was  not  mortgaged  to  them;  third,  that  they 
acquired  no  lien  by  virtue  of  the  receipt  or  bill  of  lading.  But  the  court  of 
appeals  decided  differently,  as  stated  in  the  text. 

1  The  defendant  surrendered  the  receipt  soon  after  he  took  it  from  the  draft, 
but  intercepted  the  flour  at  Utica  and  sold  it ;  and  held  that  he  acquired  no 
right  or  title  to  the  property,  not  having  received  the  bill  of  lading. 

4  Allen  v.  Williams,  12  Pick.  R.,  297. 


424  BILLS    OF  EXCHANGE  AND    PROMISSORY    NOTES. 

The  drawee  named  in  a  draft  to  which  is  appended  a  bill 
of  lading  as  a  security  to  insure  acceptance  and  payment,  is 
at  liberty  to  refuse  or  to  accept  the  draft,  as  he  sees  fit;  but 
the  drawer  and  each  successive  indorser  transfering  the  draft 
with  the  bill  of  lading  attached,  has  a  right  to  require  that 
the  cargo  be  appropriated  for  their  protection.  The  draft  is 
drawn  against  a  shipment  of  goods,  and  the  title  to  the  goods 
accompanies  and  is  transfered  with  the  draft  as  a  pledge  for 
its  payment;  and  equity  surely  demands  that  the  pledge  shall 
be  used  to  secure  the  honor  and  payment  of  the  bill,  i 

A  case  that  lately  arose  in  the  state  of  Pennsylvania  pre- 
sented this  state  of  facts :  there  was  a  general  arrangement 
entered  into  between  the  drawer  and  drawees  that  the  latter 
would  accept  and  advance  on  produce  consigned  to  them,  on 
receiving  the  bills  of  lading;  and  under  the  arrangement  the 
bills  of  lading  were  sometimes  sent  with  the  bills  of  exchange 
and  sometimes  with  letters  of  advice;  and  the  three  last  bills 
of  lading  having  been  false  and  fraudulent,  the  acceptors 
refused  to  pay  the  bill  in  question;  and  it  was  decided  that 
the  defence  could  not  be  interposed,  though  the  plaintiff  knew 
of  the  arrangement,  it  not  having  been  shewn  that  the  plain- 
tiff, the  payee  named  in  the  bill,  was  cognizant  of  the  fraud 
practiced  by  the  drawer.  2 

When  the  drawee  accepts  in  writing  and  intends  to  make  a 
conditional  acceptance,  he  should  be  careful  to  express  dis- 
tinctly the  condition  he  thinks  proper  to  annex;  for  it  would 
be  a  departure  from  a  well  settled  rule,  to  allow  a  written 
acceptance  to  be  varied  by  parol  evidence;  and  it  is  certain 
that  a  parol  condition  would  be  of  no  avail  as  against  a  per- 
son taking  the  bill  for  value  without  notice  of  the  condition.  3 

1 1  Louis.  Ann.  R..  148.  There  is  some  difficulty  in  saying  upon  what  prin- 
ciple the  decision  in  Louisiana  can  be  sustained,  unless  it  is  assumed  that  the 
draft  accompanied  by  the  bill  of  lading,  is  not  a  bill  of  exchange.  On  that 
assumption  nothing  could  be  more  equitable. 

a  Craig  v.  Sibbett  &  Jones,  15  Penn.  State  R.,  238,  decided  in  1850. 

3  Bayley  on  Bills,  ch.  6,  §  1;  Chitty  on  Bills,  303.  Mr.  Story  does  not  state 
the  rule  as  strongly,  in  respect  to  the  right  to  give  parol  evidence  varying  the 
contract  of  acceptance,  §  240. 


ACCEPTANCE.  425 

In  the  state  of  Mississippi,  the  acceptance  being  absolute,  it 
has  been  held  that  the  acceptor  cannot  show  that  there  was  a 
parol  agreement  made  at  the  time  of  the  acceptance  that  the 
same  was  to  be  obligatory  only  upon  condition  that  the  draw- 
er of  the  bill  finished  a  certain  job  of  work  on  which  he  was 
then  engaged.  Per  Curiam:  "  The  contract  to  pay  as  accep- 
tor was  in  writing,  and  therefore  could  not  be  changed  by 
parol;  the  deposition  went  to  show  that  there  was  not  a  posi- 
tive agreement  to  pay,  as  acceptor,  and  therefore  being  parol 
testimony  was  not  admissible."  i  So,  a  receipt  given  for  a  bill 
of  exchange  showing  that  it  was  given  as  collateral  to  certain 
notes,  and  to  be  delivered  up  on  payment  of  the  notes,  does 
not  make  the  bill  conditional  or  payable  on  a  contingency.  2 

When  a  bill  that  has  been  accepted  in  writing  comes  into 
the  hands  of  a  bona  fide  holder  for  value,  the  same  rule  which 
excludes  a  defence  on  the  merits,  operates  to  shut  out  proof 
of  a  parol  condition  appended  to  the  acceptance.  In  a  late 
English  case,  where  an  action  was  brought  against  the  defen- 
dant as  the  acceptor  of  a  bill,  the  acceptance  having  been 
made  in  blank  some  twelve  years  before  and  recently  filled  up 
and  negotiated,  Mr.  Justice  Cresswell  states  the  ground  upon 
which  the  defence  was  excluded  in  these  words  :  "  A  person 
who  gives  another  possession  of  his  signature  on  a  bill  stamp, 
prima  facie  authorizes  the  latter  as  his  agent  to  fill  it  up,  and 
give  to  the  world  the  bill  as  accepted  by  him.  He  enables 
his  agent  to  represent  himself  to  the  world  as  acting  with  a 
general  authority;  and  he  cannot  say  to  a  bona  fide  holder  for 
value,  who  has  no  notice  of  any  secret  stipulations,  that  there 
were  secret  stipulations  between  himself  and  the  agent,  any 
more  than  a  principal,  in  the  case  already  put,  where  he 

1  Heaverin  r.  Donncll,  7  Smedes  and  Marshall's  R.,  244,  decided  in  the 
court  of  appeals  in  1846.  In  Tucker  v.  Welsh,  the  same  point  was  raised  and 
reserved,  but  the  cause  did  not  turn  upon  that  question.  17  Mass.  R.,  161. 

*  Goodwin  v.  McCoy,  13  Ala.  R.,  271,  decided  in  1848.  "  To  allow  a  verbal 
condition  in  evidence  to  qualify  a  written  acceptance  would  be  incorporating 
with  a  written  contract,  an  incongruous  parol  condition,  which  is  contrary  to 
first  principles."  Per  Ld.  Ellenborough,  Hoare  v.  Graham,  8  Camb.,  67; 
Adams  v.  Wordtey,  1  M.  and  W.,  374. 

25 


426  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

enables  his  agent  buying  or  selling  in  his  behalf  to  represent 
himself  as  acting  under  a  general  authority."  i 

Where  the  acceptance  is  verbal, as  it  maybe  in  the  absence 
of  any  local  statute  to  the  contrary,  a  condition  annexed  to 
the  acceptance  may  of  course  be  shewn,  in  the  same  manner 
as  the  acceptance  itself  is  proved.  Thus,  on  presenting  for 
acceptance  certain  bills  of  exchange,  the  drawee  said  he  would 
have  accepted  them  if  he  had  had  funds  (meaning  the  fund 
on  account  of  which  the  bills  were  drawn;)  that  he  had  not 
been  able  to  obtain  those  funds  from  France,  but  that  when 
he  did  obtain  them  he  would  pay  the  bills;  and  it  was  held 
that  this  amounted  to  a  conditional  acceptance,  and  that  the 
defendant,  having  subsequently  become  possessed  of  the  fund 
in  question,  was  bound  to  pay  the  bills.  2  But  the  acceptor 
cannot  shew  statements  made  by  him  subsequent  to  the 
acceptance  of  a  bill,  such  as  that  he  will  not  be  able  to  pay 
it  until  he  gets  returns  from  certain  goods,  so  as  to  make  the 
acceptance  conditional.  3 

As  we  have  seen,  if  a  bill  drawn  in  general  terms  is 
accepted,  payable  at  another  place,  the  acceptance  is  under 
the  commercial  law  a  qualified  or  restricted  engagement  to 
pay  at  the  place  designated.  4  But  in  England,  under  a  late 
statute,  such  an  acceptance  is  general,  unless  the  acceptor 
specifies  that  the  payment  is  to  be  made  at  the  place  named 
and  not  elsewhere.  5  It  is  general  as  against  the  acceptor; 
but  in  an  action  against  the  drawer,  when  the  bill  has  been 
accepted,  payable  at  a  particular  banking  house,  it  is  still 
necessary  to  shew  a  presentment  at  the  place  named.  Lord 
Ch.  J.  Tindal :  "  The  question  raised  for  our  consideration 
is  this :  whether  in  an  action  against  the  drawer  of  a  bill  on 
the  ground  of  non-payment  by  the  acceptor,  it  is  not  necessary 
to  prove  a  presentment  for  payment  at  the  banking  house  in 
London  where  the  same  is  made  specially  payable  by  the 

1  Montague  v.  Perkins,  22  Eng.  Law  andEq.  R.,  616,  reported  in  1853-4. 

*  Mendizabal  v.  Machado,  3  Moore  and  Scott's  R.,  841. 

*  Wells  v.  Brigham,  6  Gush.  R.,  6. 

*  Rowe  v.  Young,  2  Brod.  and  Bing.,  165. 

*  1  and  2  Geo.  4,  c.  78;  Siggers  v.  Nichols,  3  Jurist,  34. 


ACCEPTANCE.  4?7 

acceptance.  We  are  all  of  opinion  that  such  special  present- 
ment is  necessary,  in  order  to  enable  the  holder  to  recover 
against  the  drawer  of  the  bill."  i  Hence  an  allegation  of  pre- 
sentment to  the  drawee  for  payment,  is  sustained  by  evidence 
of  presentment  at  the  place  at  which  the  acceptance  makes 
it  payable;  2  though  a  general  acceptance  under  the  statute, 
it  is  also  an  appointment  of  the  place  of  payment.  3 

In  this  country  where  an  action  is  brought  against  the  maker 
of  a  promissory  note,  or  the  acceptor  of  a  bill  of  exchange, 
payable  at  a  particular  place,  it  is  not  necessary  to  aver  or 
prove  a  demand  of  payment  at  that  place.  4  "  The  holder  of 
the  bill  of  exchange  need  not  shew  a  demand  of  payment  of 
the  acceptor  any  more  than  of  the  maker  of  a  note.  It  is  the 
business  of  the  acceptor  to  shew  that  he  was  ready  at  the  day 
and  place  appointed,  but  that  no  one  came  to  receive  the 
money,  and  that  he  was  always  ready,  afterwards,  to  pay."  5 
As  against  the  maker  of  a  note,  or  the  acceptor  of  a  bill,  a 
demand  on  the  day  and  at  the  place  where  the  same  becomes 
payable  is  not  in  the  nature  of  a  condition  precedent;  and 
therefore  it  lies  with  the  defendant  in  such  cases  to  aver  and 
prove  that  he  was  ready  to  pay  at  the  time  and  place  appointed; 
and  his  plea  is  like  a  plea  of  tender  in  bar  of  damages  and 
costs,  and  not  in  bar  of  the  action.  6  Even  where  a  note, 
such  as  a  bank  bill,  is  expressly  made  payable  on  demand  at 
t  he  counter  of  the  bank,  a  suit,  as  in  other  cases  of  precedent 

1  Gibb  v.  Mather,  1  Moore  and  Scott  R.,  387,  decided  in  1832,  after  the  pas- 
sage of  the  statute.  The  bill  in  this  case  was  addressed  to  C.  and  ¥.,  Liver- 
pool, requiring  them  to  pay  in  London,  and  the  acceptance  was  to  pay  at  Jones, 
Lloyd  &.  Co.'s,  Bankers,  London,  and  payment  was  demanded  of  the  acceptora 
in  Liverpool. 

»  Wilmot  v.  Williams,  8  Man.  and  Granger  R.,  1017,  decided  in  1844. 

'  Blake  v.  Beaumont.  4  id.  7. 

4  Foden  v.  Sharp,  4  John.  R.,  183;  Wolcott  T.  Van  Santvoord,  17  id.  248; 
Caldwell  v.  Cassidy,  8  Cowen.  271;  Bank  of  U.  S.  v.  Smith,  11  Wheat.,  171 ; 
Haxton  v.  Bishop,  3  Wend..  20;  Ruggles  T.  Patten,  8  Mass.  R.,  480;  Wallace 
T.  M'Connell,  13  Peters  R.,  136;  Clarke  T.  Gordon,  3  Richardson,  311;  Green 
T.  Goings,  7  Barb.,  652. 

•  4  John.  R.,  183. 

•  17  John.  R.,  248;  8  Cowen,  271. 


428  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

debt  or  duty,  is  a  sufficient  demand;  and  the  readiness  of  the 
maker  to  pay  is  matter  of  defence,  i 

When  the  action  is  against  an  indorser  of  a  note,  or  the 
drawer  or  indorser  of  a  bill,  a  demand  at  the  place  of  payment 
is  material  and  necessary  to  be  shewn.  2  If  a  note  is  drawn 
or  a  bill  accepted,  payable  at  a  bank,  the  contract  of  the 
drawer  or  indorser  being  a  conditional  undertaking  to  pay  in 
case  the  maker  or  acceptor  does  not,  on  due  presentment  for 
that  purpose,  it  is  the  duty  of  the  holder  to  demand  payment 
at  the  time  and  place  appointed.  3  In  other  words,  it  is 
incumbent  upon  the  holder  to  shew  that  he  has  made  a  legal 
demand  of  payment  on  the  party  primarily  liable;  and  this 
can  only  be  done  where  the  bill  or  note  is  payable  at  a  parti- 
cular place,  by  shewing  a  demand  of  payment  made  at  that 
place. 4 

The  effect  of  taking  a  limited  or  qualified  acceptance  upon 
the  rights  of  the  holder  as  against  the  drawer  and  indorser  of 
a  bill  of  exchange,  is  not  necessarily  the  same.  5  The  indors- 
er is  in  many  respects  a  new  drawer,  but  certainly  does  not 
stand  in  quite  the  same  relation  as  the  drawer  towards  the 
drawee.  The  drawer  knows  or  ought  to  know  whether  or  not 
he  has  funds  in  the  hands  of  the  drawee,  or  such  a  credit 
established  with  him  as  authorizes  him  to  expect  that  his  bill 
will  be  accepted  and  paid ;  and  it  is  well  settled  that  if  he 
have  no  funds  in  the  hands  of  the  person  on  whom  he  draws 
and  no  right  to  expect  that  his  bill  will  be  honored,  he  is  not 
entitled  to  notice  of  non-acceptance  or  non-payment.  6  Draw- 

1  Haxtonv.  Bishop,  3  Wend.  R.,  13. 

a  Woodworth  v.  Bank  of  America,  19  John.  R..  392;  18  id.  315;  Story  on 
Promissory  Notes,  §  228,  229. 

*  11  Wheat.  R.,  174;  13  Peters,  136;  13  Mass.,  556;  13  Pick.,  465;  Herring 
v.  Sanger,  3  John.  Cas.,  71.     The  place  is  material,  26  Eng.  Law  and  Eq.,  123. 

*  3  John.  Cas.,  71;  8  Man.  and  Granger,  1017;  4  id  7.    The  place  of  pay- 
ment in  such  cases  is  undoubtedly  a  material  part  of  the  engagement  to  pay, 
and  qualifies  the  rights  of  the  parties  under  the  contract.    But  where  the 
action  is  against  the  acceptor,  it  is  quite  as  convenient  as  a  rule  of  pleading 
and  practice  that  the  defendant's  readiness  to  pay  at  the  place  named  should 
be  alleged  as  a  matter  of  defence.     3  Richardson,  311 

'  Walker  v.  The  Bank  of  the  State  of  New-York,  13  Barb.  S.  C.  R.,  636. 

*  Robinson  v.  Ames,  20  John.  R.,  146. 


ACCEPTANCE.  429 

ing  under  such  circumstances,  like  the  giving  of  a  check  upon 
a  bank  where  the  drawer  has  no  funds,  is  an  act  of  bad  faith;  l 
and  in  such  cases  it  would  be  absurd  to  hold  the  drawer  enti- 
tled to  notice  of  what  he  knew  perfectly  beforehand  must  be 
the  result  of  his  bill.  In  like  cases  the  taking  of  a  special 
acceptance  plainly  ought  not  to  operate  as  a  discharge  of  the 
drawer;  2  for  the  drawer  here  is  not  injured  by  the  holder's 
taking  a  qualified  acceptance  of  the  bill.  3  It  is  true  that 
such  an  acceptance  is  a  departure  from  the  tenor  of  the  bill, 
and  is  frequently  an  extension  of  the  time  of  payment;  but 
the  drawer  cannot  complain  of  that,  where  he  has  voluntarily 
put  himself  into  such  a  situation  that  he  is  not  entitled  to 
notice  of  non-acceptance  or  non-payment.  4 

The  holder  of  a  bill  of  exchange  who  takes  a  qualified 
acceptance,  must  as  we  have  seen  abide  by  its  terms.  If  he 
takes  an  acceptance  to  pay  on  the  happening  of  a  certain  event, 
he  must  wait  until  the  event  has  arrived  before  he  can  recover 
thereon  against  the  acceptor  or  have  recourse  to  the  drawer.  5 
The  taking  of  such  an  acceptance,  though  it  may  not  dis- 

1  Birckcrdike  v.  Bollmar,  1  Term  R.,  405. 

•  18  Barb.  R.,  63ii. 

»  Baker  v.  Gallagher,  1  Wash.  C.  C.  R.,  461;  Knox  v.  Reeside,  Miles  (Dis. 
Court  Phila.,)  R..  294;  1  McCord,  408;  1  Moore  and  Scott,  387;  3  Rich.,  413; 
2  Brod.  and  Bing.,  156. 

4  An  allegation  in  a  complaint,  in  an  action  against  the  drawer,  of  a  pre- 
sentment of  the  bill  of  exchange,  of  refusal  and  notice,  was  formerly  held  sus- 
tained by  proof  of  presentment,  refusal,  and  that  the  drawee  had  no  funds. 
Per  Curiam  :  "  The  evidence  establishes  the  drawer's  and  indorsees  signatures, 
and  that  the  order  was  presented  and  refused  to  be  accepted,  and  that  the 
drawee  had  no  funds  in  his  hands  belonging  to  the  drawer.  This  dispensed 
with  notice  to  the  drawer;  for  having  no  funds  upon  which  he  could  draw,  he 
cannot  be  injured  by  not  being  informed  that  his  order  was  refused  accep- 
tance." Hubble  v.  Fogartie,  3  Richardson  (So.  Car.,)  R.,413;  1  Wash.  C. 
C.  R.,461. 

6  Campbell  v.  Pettengill  and  al.,  7  Maine  R.,  126.  An  order  was  drawn  by 
the  defendants  in  these  words:  "Orono,  June  13,  1827  Thomas  Bartlett, 
Esquire,  Collector  and  Treasurer  of  the  Penobscot  Boom  Corporation,  please 
pay  to  Henry  Campbell,  or  the  bearer,  ninety-seven  dollars  and  seventy-seven 
cents,  being  for  value  received."  And  was  accepted  iu  these  words:  "  July  9. 
1827,  accepted  to  pay  when  in  funds  of  the  Penobscot  Boom  Corporation. 
Thomas  Bartlett  treasurer  of  said  corporation."  And  it  was  shewn  that  the 
acceptor  had  no  cash  funds  in  his  hands,  but  did  hold  negotiable  securities  and 


430  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

discharge  the  drawer  under  the  circumstances  suggested,  is  an 
extension  of  the  time  of  payment;  i  on  the  same  principle  that 
taking  a  promissory  note  payable  at  a  future  day  for  a  debt  due 
postpones  the  day  of  payment.  2 

As  to  the  indorsers  of  a  bill  of  exchange;  it  is  very  clear 
that  the  holder  discharges  them,  by  taking  a  conditional  or 
qualified  acceptance,  varying  from  the  tenor  of  the  instru- 
ment. 3  The  contract  they  enter  into  cannot  be  changed  with- 
out their  consent.  4 

The  acceptor  is  primarily  liable  to  pay  the  bill;  he  is  the 
debtor;  and  the  drawer  and  indorsers  are  respectively  liable 
in  the  nature  of  sureties  on  his  default.  5  Though  an  accom- 
modation acceptor,  he  is  to  be  considered  like  the  maker  of  a 
promissory  note,  as  the  party  bound  to  satisfy  the  debt;6  and  his 
acceptance  is  evidence  of  value  received  by  him  from  the 
drawer.  7 

In  the  ordinary  course  of  business  the  bill  is  supposed  to  be 
drawn  on  funds;  and  the  understanding  is  that  the  drawer 
appropriates  and  directs  his  own  money  to  be  paid  to  the 
person  named  as  payee  in  the  bill,  or  to  his  order;  and  the 
acceptance  is  the  admission  that  this  is  the  relation  in  which 

1  1  Maine  R.,  126;  Andrews  v.  Baggs,  Minor,  173;  Knox  v.  Keeside,  1  Miles, 
294. 

9  1  John.  Cas.,  71. 

1  13  Barb.  R.,  636. 

4  The  same  remark  applies  in  respect  to  the  undertaking  of  the  drawer, 
where  he  has  funds  in  the  hands  of  the  drawee,  or  a  running  account  with  him 
and  a  fluctuating  balance,  or  draws  with  a  bona  fide  expectation  of  assets. 
See  cases  cited,  7  Maine  R.,  126.  Not  so  where  lie  has  no  right  to  draw  at  all. 

6  Heylyn  v.  Adamson,  2  Burr.,  674;  Dougl.,  249;  8  Esp.  R.,  47;  Pownal  v. 
Ferrand,  6  Barn,  and  Cress,  442;  Philpot  v.  Bryant,  4  Bing.,  720. 

•  Anderson  v.  Anderson,  4  Dana,  352;  1  Comst.  R.,  113;  22  Wend.,  558. 

7  3  Kent's  Com..  114. 

other  evidence  of  debt  belonging  to  the  corporation  at  the  time  the  draft  was 
drawn,  and  held  that  the  same  was  drawn  under  such  circumstances  as  entitled 
the  drawers  to  notice  of  non-acceptance ;  and  that  the  holder  having  waived 
an  absolute  and  taken  a  special  and  conditional  acceptance  without  giving 
notice  to,  or  procuring  the  assent  of  the  drawers,  could  not  resort  to  them  for 
payment;  certainly  not  until  there  has  been  a  violation  of  the  terms  of  the 
acceptance.  See  20  John.,  150. 


ACCEPTANCE.  431 

the  parties  stand  to  each  other,  and  a  personal  undertaking  on 
the  part  of  the  acceptor  to  pay  the  amount  specified  in  the 
manner  directed,  i 

It  happens  very  frequently  that  the  acceptor  is  not  the  ori- 
ginal debtor  in  fact :  in  such  cases  he  is  of  course  never  liable 
to  the  party  for  whose  accommodation  he  accepts  the  bill.  2 
As  to  him,  he  is  a  surety,  and  entitled  to  the  privileges  and 
protection  of  one  who  stands  in  that  relation  towards  another; 
while  as  to  a  third  person  who  takes  it  for  value,  the  acceptor 
is  responsible  just  the  same  as  though  he  had  accepted  for  a 
good  consideration; 3  unless  the  acceptance  is  made  for  a  par- 
ticular purpose,  and  the  bill  as  accepted  is  taken  for  a  diffe- 
rent purpose  with  knowledge  of  the  circumstances.  4  When 
made  for  the  general  accommodation  of  the  drawer,  any  per- 
son is  at  liberty  to  take  it,  with  or  without  knowledge  of  the 
circumstances,  and  for  value  parted  with,  as  payment  or  as 
collateral  security  for  an  antecedent  debt.  5  But  when  the 
acceptance  is  given  for  a  special  object,  and  the  purchaser  or 
party  taking  the  bill  is  made  acquainted  with  the  arrange- 
ment, he  is  bound  by  the  terms  of  the  agreement;  he  becomes 
thereby  charged  as  a  participator  in  the  fraudulent  diversiou 
of  the  paper  from  the  purpose  for  which  it  was  given,  and  can 
acquire  no  right  of  action  thereon.  6  If  he  have  notice  that 

1  Byrne  v.  Schwing,  6  B.  Monroe,  199;  Jordan  v.  Tackington,  4  Devereux, 
868;  2  Wheat.,  386;  Kendall  v.  Galvin,  15  Maine  R.,  131. 

"  Sparrow  v.  Chisman,  9  Barn.  andOess,  241 ;  4  Man.  and  Ry.,  206. 

1 4  Dana,  852,  1  Denio,  116;  5  Taunt.,  192;  In  re  Babcock,  8  Story,  393. 

4  In  Smith  v.  Knox,  Lord  Eldon  says  :  ''  If  a  person  gives  a  bill  of  exchange 
for  a  particular  purpose,  and  that  is  known  to  the  party  who  takes  the  bill;  as 
if,  for  example,  to  answer  a  particular  demand,  then  the  party  taking  the  bill 
cannot  apply  it  to  a  different  purpose;  but  where  a  bill  is  given  under  no  such 
restriction,  but  merely  for  the  accommodation  of  the  drawee  or  payer,  and 
that  is  sent  into  the  world,  it  is  no  answer  to  an  action  on  that  bill,  that 
the  defendant  accepted  it  for  the  accommodation  of  the  drawer,  and  that  that 
fact  was  known  to  the  holder;  in  such  case  if  the  holder  gave  a  bona  fide  con- 
sideration for  it,  he  is  entitled  to  recover  the  amount,  though  he  had  full 
knowledge  of  the  transaction."  3  Esp.  R.,  46;  Denniston  Bacon,  10  John. 
R.,  198;  Brown  v.  Taber,  5  Wend.,  666;  8  Wend.,  437,  6  id.  66. 

6  B  nk  of  Rutlan  I  r.  Buck,  6  Wend.,  66;  Atwood  T.  Crowdie,  1  Stark  R., 
483;  Seneca  Co.  Bank  v.  Neass,  6  Denio,  329;  S.  C.,  3  Corns.,  41.'. 

•  Beers  v.  Culver,  1  Hill  R.,  689. 


432  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

the  acceptance  was  given  for  the  drawer's  accommodation  upon 
a  condition;  and  the  bill  is  subsequently  transfered  to  him, 
he  takes  it  subject  to  that  condition,  i  And  any  thing  that 
shews  him  to  have  taken  the  bill  in  bad  faith,  will  defeat  his 
right  of  recovery.  2 

Where  the  bill  is  drawn  and  negotiated  in  the  ordinary 
course  of  business,  the  acceptor  is  bound  to  pay  the  same  to 
the  owner  or  holder;  he  is  liable  thereupon  to  the  payee,  to 
the  drawer,  and  to  every  indorsee  of  the  paper  having  the 
title.  But  he  is  not  liable  on  the  bill  to  the  holder  who 
necessarily  deduces  his  title  through  a  forged  indorsement : 
for  instance,  the  party  in  possession  cannot  recover  where  the 
indorsement  of  the  payee,  who  was  the  owner  of  the  bill, 
appears  to  have  been  forged;  and  if  the  acceptor  pays,  suppo- 
sing it  to  be  genuine,  he  is  entitled  to  recover  back  the  money 
paid.  3  The  rule  is  different,  where  the  payee  never  had  any 

1  Small  v.  Smith,  1  Denio,  583.  The  principle  stated  in  the  text  seems  to 
be  fairly  deducible  from  this  case,  where  a  note  was  indorsed  for  the  maker's 
accommodation  upon  a  certain  condition,  and  taken  by  the  plaintiff  with  know- 
ledge. But  the  case  does  not  decide  whether  or  not  the  party  receiving  the 
note  with  knowledge  that  the  indorsement  was  made  upon  a  condition,  is 
bound  to  ascertain  the  condition. 

9  5  Wend.,  566;  Hatch  v.  Searles,  31  Eng.  Law  and  Eq.  R.,  219.  Where  a 
bill  is  accepted  without  consideration,  and  the  indorsee  takes  it  with  know- 
ledge that  it  was  accepted  in  blank,  this  circumstance  is  sufficient  to  charge 
him  with  full  knowledge  of  the  origin  of  the  bill.  Fitch  v.  Jones,  32  id.  134. 
When  a  bill  or  note  is  shewn  to  have  originated  in  illegality  or  fraud,  the  pre- 
sumption arises  that  a  subsequent  holder  gave  no  value  for  it;  for  "  the  law 
supposes  that  the  original  party,  not  being  able  to  sue  upon  the  instrument 
himself,  has  handed  it  over  to  another  to  sue  upon  it  for  his  benefit.  This  pre- 
sumption must  be  rebutted  by  the  holder  shewing  affirmatively  that  he  gave 
value."  Mere  absence  of  consideration  for  the  bill  does  not  have  that  effect; 
decided  in  1855.  Parrv  Jewell,  id.  394.  A  plea  of  payment  at  maturity  and 
that  the  bill  in  suit  was  afterwards  indorsed  over  to  the  plaintiff  is  a  good  de- 
fence. If  the  bill  has  not  been  dishonored,  the  party  taking  it  in  good  faith 
for  value  may  recover  on  it,  though  it  has  been  previously  stolen  and  taken 
negligently.  Raphael  v.  Bank  of  England,  33  Eng.  Law  and  Eq.  R.,  276.  An 
indorsee  for  value,  of  an  accommodation  bill,  receiving  it  without  notice  of  its 
character  as  such,  may,  notwithstanding  notice  subsequently  acquired,  release 
the  drawer  without  discharging  the  acceptor.  Ex  parte  Graham,  35  Eng.  Law 
and  Eq.  R..  164. 

3  Canal  Bank  v.  Bank  of  Albany,  1  Hill  R.,  287;  Talbot  v.  Bank  of  Roches- 
ter, 1  Hill  R.,  295;  Coggill  v.  American  Exchange  Bank,  1  Comst.  R.,  113; 
Dick  v.  Leverick,  11  Louis. ,  573. 


ACCEPTANCE.  433 

interest  in  the  bill  and  the  drawer  puts  it  in  circulation 
with  his  indorsement  forged  upon  it :  in  this  case,  where  the 
same  is  paid  to  the  party  who  took  it  in  good  faith  and  for 
value,  the  acceptor  cannot  recover  back  the  amount  paid,  l 
The  title  never  having  been  in  the  person  named  as  the  payee, 
the  rights  of  the  parties  are  the  same  as  where  the  bill  is 
drawn  payable  to  a  fictitious  person  and  negotiated  by  the 
drawer  with  the  name  of  the  supposed  payee  properly  indorsed 
upon  the  instrument.  2  So  far  as  the  title  to  the  bill  is  con- 
cerned, it  is  the  same  as  if  drawn  payable  to  the  order  of  the 
drawer,  or  to  bearer.  3 

For  a  similar  reason  the  acceptor  is  not  allowed  to  allege 
that  the  signature  of  the  drawer  is  a  forgery  :  by  accepting  it 
he  accredits  the  bill  and  gives  it  currency  in  the  market.  4 
And  though  not  afterwards  transfered  on  the  credit  or  faith 
of  the  acceptance,  it  would  be  injurious  to  the  rights  of  the 
holder  to  permit  the  acceptor  to  raise  a  question  of  fact  at  a 
subsequent  day,  which  he  is  presumed  to  have  passed  upon 
before  he  made  the  acceptance.  5  He  knows  or  is  presumed 
to  know  the  handwriting  of  the  drawer;  and  his  acceptance 
is  a  contract  entered  into  upon  the  basis  of  facts  that  are 
peculiarly  within  his  knowledge.  There  is  therefore  no  ground 
of  principle  upon  which  he  can  raise  a  defence  of  this  kind. 

When  the  party  taking  a  bill  enquires  of  the  acceptor  before- 
hand if  the  acceptance  is  genuine,  and  he  answers  that  it  is, 
he  is  estopped  from  afterwards  denying  his  signature  in  an 
action  brought  by  the  purchaser  who  acted  upon  the  faith  of 
his  representation.  6  So,  though  his  acceptance  were  not 

1 1  Comst.  R.,  113;  Hortsman  v.  Henshaw,  11  How.  TJ.  S.  R.,  17". 

*  Mcachcr  v.  Fort,  3  Hill  So.  Car.,  227.    The  drawer  is  estopped  from  de- 
nying the  genuineness  of  the  indorsement  where  he  negotiates  it  as  properly 
indorsed,  though  it  be  a  forgery. 

1  Vcre  v.  Lewis,  3  Term  R.,  182;  Minet  v.  Gibson,  id.  481  j  1  H.  Black.,  569; 
8  Hill,  112;  Foster  v.  Shattuck,  2  N.  Hamp.,  446. 

4  1  Hill  R.,  287;  Levy  v.  Bank  of  U.  S.,  4  Dall.,  284;  S.  C.,  1  Binn.,  27; 
Price  v.  Neal,  3  Burr.  1354;  Smith  v.  Mercer,  1  Marsh.,  453;  6  Taunt.,  74j 
Stra.,  618. 

•4  Dall.,  234;  1  Binn,  27. 

•  Leach  v.  Buchanan,  4  Esp.  R.,  226;  Cooper  v.  Le  Blanc,  2  Stra.,  1051; 
Wilkinson  v.  Lutridge,  Stra.,  618;  2  id.  946. 


434  BILLS   OF  EXCHANGE  AND  PROMISSORY    NOTES. 

regarded  as  a  contract  to  pay  according  to  the  tenor  of  the 
bill,  it  would  be  sufficient  to  estop  him  from  denying  the  sig- 
nature of  the  drawer,  in  an  action  brought  by  the  holder  who 
took  the  bill  after  it  had  been  accepted. 

An  acceptance  is  not  complete  until  communicated  to  the 
holder  of  the  bill;  and  until  that  is  done  the  drawee,  not- 
withstanding he  may  have  written  upon  it  a  formal  acceptance, 
is  at  liberty  to  dishonor  the  bill  and  erase  what  he  has  written,  i 
Like  other  contracts,  it  is  completed  by  the  act  of  delivery.  2 
And  after  that  no  one  but  the  holder  or  his  authorized  agent 
has  the  right  to  cancel  the  acceptance;  nor  can  he  safely  do 
so  without  first  procuring  the  cqnsent  of  the  drawer  and  indor- 
sers.  3  But  where  a  bill  accepted  payable  at  a  banking  house 
is  left  there  for  payment,  and  it  is  the  custom  of  the  house  to 
draw  a  line  across  the  acceptance  of  bills  that  are  to  be  paid, 
and  the  banker  does  so  by  accident  on  the  bill  so  left,  which 
he  is  ordered  in  time  not  to  pay,  he  incurs  thereby  no  legal 
liability.  4  Nor  will  the  striking  out  of  an  indorsement,  under 
a  mistake  of  fact, discharge  an  indorsees  though  in  a  case  of 
carelessness  it  may  subject  the  party  in  fault  to  a  special 
action  for  damages  to  the  extent  of  the  injury  sustained.  6 

So  where  the  person  to  whom  a  bill  is  directed  in  case  of 
need,  cancels  the  acceptance  under  the  mistake  of  supposing 
the  bill  payable  at  his  house,  and  then  pays  the  bill  for  the 
honor  of  one  of  the  indorsers;  the  act  of  erasing  the  accept- 
ance is  not  a  discharge  of  the  acceptor,  nor  does  it  release  the 
indorsers  on  the  bill.  7  But  the  act  of  paying  the  bill  and 

1  Cox  v.  Troy,  5  Barn,  and  Aid.,  474;  1  Dowl.  and  Ry.,  38. 

a  So,  of  promissory  notes,  they  take  effect  from  the  delivery;  20  John.  R., 
288;  2  id.  300. 

8  Chitty  on  Bills,  308. 

4  Warwick  v.  Rogers.  5  Man.  and  Granger,  340. 

*  Wilkinson  v.  Johnson,  3  Barn,  and  Cress,  428. 

8  Per  Ch.  J.  Abbot,  3  B.  and  C.,  428;  see  Bogart  v.  Nevins,  6  Serg.  and 
Rawle,  361 

7  Roper  and  al.  v.  Birkbeck  and  al..  15  East  R.,  17.  A  bill  of  exchange 
having  been  accepted  payable  at  Ladbrooke's  with  a  direction  in  writing  on  it, 
"  in  case  of  need  apply  at  Boldero's,"  and  having  been  dishonored  when  due 
at  Ladbrooke^s  and  thereupon  brought  to  Boldero,  who  thinking  it  had  been 


ACCEPTANCE.  435 

cancelling  the  acceptance,  when  done  by  the  acceptor  himself, 
is  not  so  easily  explained,  i  The  party  receiving  money  due 
to  him  without  fraud  on  his  part,  is  not  bound  to  return  it  on 
a  suggestion  that  it  was  paid  by  mistake.  2 

An  acceptance  may  be  waived  by  the  holder,  by  an  agree- 
ment to  consider  it  at  an  end,  or  by  a  message  communicated 
to  the  acceptor  of  an  accommodation  bill,  that  it  has  been 
settled  with  the  drawer;  provided  the  acceptor  acts  upon  the 
faith  of  the  statement  so  made.  3  To  operate  as  a  discharge, 
the  waiver  must  be  made  in  express  terms,  and  must  be  founded 

1  Bogart  v.  Nevins,  6  Serg.  and  Rawle,  861.  McKinley.  as  agent  for  the 
holders,  had  in  his  hands  the  bill  in.  suit  and  another  for  nearly  the  same  sum, 
both  accepted  by  one  Fenn.  Fenn  sent  his  clerk  to  take  up  the  other  bill, 
bat  he  took  up  the  one  on  which  this  action  is  brought,  and  returned  with  it 
to  Fenn,  who  struck  out  his  name  as  acceptor.  In  about  five  minutes  from  the 
time  he  received  it,  Fenn  having  written  his  name  as  acceptor,  sent  this  bill 
back  to  McKinley,  who  received  it  and  gave  up  the  other  bill;  and  it  did  not 
appear  whether  the  acceptor  struck  out  his  name  by  mistake  or  knew  what  he 
was  doing,  and  in  a  few  minutes  changed  his  mind.  A  verdict  was  had  for 
plaintiffs  against  the  indorsers,  and  a  new  trial  was  ordered. 

1  Dey  v.  Murray,  9  John.  R.,  171  ;  Sweeting  v.  Halse,  9  Barn,  and  Cress.,  365, 
decided  in  1829.  When  a  bill  of  exchange  became  due,  it  was  agreed  between 
the  drawer  and  acceptor,  that  it  should  be  reneNved ;  and  on  the  back  of  the  bill 
another  instrument  for  the  same  value  was  drawn,  and  accepted  by  the  same 
parties,  but  it  was  not  stamped.  At  the  same  time,  the  name  of  the  acceptor 
was  erased  from  the  first  bill.  In  an  action  on  that  bill,  the  judge  left  it  to 
the  jury  to  find  whether  it  had  been  cancelled  with  the  consent  of  the  drawer, 
and  the  unstamped  instrument  was  submitted  to  the  jury;  and  they  having 
found  that  the  bill  was  cancelled  with  the  consent  of  the  drawer,  the  court  of 
Kings  bench  made  a  rule  for  a  new  trial  absolute,  on  the  ground  that  the  jury 
ought  not  to  have  been  permitted  to  draw  a  conclusion  of  fact  from  the  un- 
stamped instrument.  The  above  decision  was  made  evidently  out  of  respect 
to  a  revenue  law,  and  on  the  ground  that  the  new  bill  was  under  it  unavailable 
for  any  purpose.  S.  C.,  4  Man.  and  Ry.,  287,  388. 

*  Bayley  on  Bills,  ch.  6,  §  1;  Walpole  v.  Pultney,  cited  Dougl.,  236,  237, 
248,  24'J. 


made  payable  at  his  house,  under  that  mistake  cancelled  the  acceptance;  but 
presently  observing  the  rnNtaki1,  wrote  under  it  "  cancelled  by  mistake,"  and 
signed  his  initials  to  it ;  yet  nevertheless  paid  the  bill  for  the  honor  of  the 
plaintiffs,  whose  indorsement  was  on  it.  Held  that  the  plaintiffs,  on  proof  of 
such  cancellation  by  mistake,  might  recover  upon  the  bill  against  prior 
indorsers. 


436  BILLS    OF  EXCHANGE  AND   PROMISSORY    NOTES. 

upon  a  good  consideration,  i  But  it  is  said  that  a  waiver 
may  be  implied,  where  the  holder  by  an  agreement  with  the 
acceptor,  takes  to  himself  the  consideration  for  the  acceptance.  2 
And  this  is  doubtless  so  where  the  contract,  taken  in  connexion 
with  the  circumstances  of  the  transaction,  shews  plainly  that 
that  was  the  intention  of  the  parties.  3  But  as  a  general  rule 
the  acceptor  of  a  bill  can  only  be  discharged  like  the  maker 
of  a  promissory  note. 

A  formal  release  of  the  acceptor  made  by  the  holder  of  the 
bill,  without  surrendering  the  paper,  though  good  as  between 
the  parties,  does  not  destroy  the  negotiability  of  the  instru- 
ment, nor  prevent  its  being  transfered  to  an  indorsee  for 
value;  nor  will  it  affect  the  right  of  the  purchaser  who  takes 
it  before  due  and  without  notice.  4  With  this  qualification, 
the  liability  of  the  acceptor  may  be  released  like  any  other 
demand  :  and  it  is  a  well  settled  rule  that  a  release  to  one  of 
several  obligors,  whether  bound  jointly,  or  jointly  and  seve- 
rally, discharges  the  others,  and  may  be  pleaded  in  bar.  5  But 
a  receipt  of  a  part  of  the  amount  due  on  a  joint  and  several 
promissory  note,  does  not  operate  as  a  release  of  the  others, 
though  expressed  to  be  ija.  full  of  all  demands.  6  Neither  will 
a  covenant  not  to  sue  one  of  two  who  are  jointly  liable,  dis- 
charge the  other.  7  But  a  general  covenant  not  to  sue,  unless 
on  a  future  contract  or  liability,  amounts  to  a  release  of  the 
person  to  whom  it  is  given,  from  all  existing  causes  of  action.  8 
It  is  construed  a  release  in  order  to  prevent  circuity  of  action.  9 

For  the  purpose  of  rendering  a  release  effectual,  it  must  be 
executed  under  seal  or  given  for  a  good  consideration.  10  But 

1  Parker  v.  Leigh,  2  Stark  R.  203;  Diagwall  T.  Dunster,  1  Dougl.,  247. 
Smith's  Mercantile  Law,  331;  Story  on  Bills,  §  266. 

•  Mason  T.  Hunt.  Dougl..  284,  297. 

4  Dod  v.  Edwards.  2  C.  and  P.,  602;  Scott  v.  Lifford,  1  Campb.,  246;  S.  C., 
9  East,  347. 

•  Nicholson  v.  Revill.  4  Ad.  and  Ell.,  675;  but  see  2  R.  S.,  61,  3d  ed. 

•  Harrison  v.  Close  &  Wilcox,  2  John.  R.,  449;  Fitch  v.  Button,  5  East,  232; 
19  Wend.,  129. 

T  Rowley  v.  Stoddard,  7  John.  R.,  207;  Byles  on  Bills,  188. 
B  Dean  v.  Newhall.8  Term  R.,  168;  6  Taunt.,  289;  Cuyler  v.  Cuyler,  2  John. 
R.,  186.    In  this  last  case  a  bond  was  given  conditioned  not  to  sue. 
'  1  Cowen,  122. 
10  Crawford  v.  Millspaugh,  13  John  R.,  87;  1  Cowen,  122. 


ACCEPTANCE.  437 

there  is  a  distinction  between  the  release  of  a  contract  which 
is  still  mutually  executory,  and  one  on  which  a  cause  of  action 
has  already  arisen.  In  the  former  case  it  may  be  waived  or 
released  by  parol;  i  in  the  latter  case,  it  requires  a  formal 
discharge  based  on  a  valid  consideration.  Now  a  promissory 
note,  or  an  acceptance  not  yet  due,  is  presumed  to  have  been 
given  for  value;  so  that  it  is  the  evidence  of  a  present  debt, 
payable  at  a  future  day.  2  Technically,  a  release  operates 
only  upon  a  present  interest;  when  there  is  a  present 
right  to  take  effect  in  future,  it  is  the  subject  of  a  present 
release;  3  but  it  has  been  held  that  a  general  release  of  all 
indebtedness  executed  by  the  indorser  to  the  maker  of  a 
note,  outstanding  in  the  hands  of  a  third  person  and  not  yet 
due,  does  not  aifect  the  right  of  the  indorser  who  is  subsequently 
charged  and  takes  up  the  note,  to  recover  thereon  against  the 
maker.  4  Neither  does  a  release  of  existing  debts  discharge 
the  right  of  an  accommodation  maker  of  a  note  outstanding, 
to  recover  thereon  after  paying  and  taking  up  the  note.  5 

Whether  a  general  release  executed  by  the  drawer  to  the 
acceptor  will  discharge  the  latter,  where  he  is  not  at  the  time 
the  holder  of  the  bill  must  of  course  depend  upon  the  terms 
used;  if  confined  to  existing  demands  between  them,  it  will 
not  discharge  a  demand  accruing  subsequently.  6 

The  rule  that  a  promise  may  be  discharged  by  parol  before 
it  is  broken,  does  not  apply  where  there  is  an  agreement  upon 
an  adequate  consideration  to  pay  a  sum  certain.  7 

Satisfaction  of  a  bill  or  note,  by  actual  payment,  or  what  is 
equivalent  to  payment,  discharges  all  the  parties,  provided  it 
is  made  to  the  proper  person  and  in  the  right  manner.  8 

1 17  John.  R.,  175;  2  Day's  Conn.  R.,  138. 

*  Ruggles  v.  Patten,  8  Mass.,  480;  13  John.,  87;  18  id.  169. 
1  Woods  v.  Williams,  9  John.  R..  123. 

4  Nichols  v.  Tracy,  1  Sand.  R.,  278. 

6  Seymour  v.  Minturn,  17  John.  R.,  170;  see  8  Denio,  16;  1  Comst.,  186. 

*  1  Sand.  R.,  278;  Scott  v.  Lifford,  1  Campb.,  250.    A  release  of  all  causes 
of  action  for  or  by  reason  of  any  matter  or  thing  which  has  happened  down  to 
the  execution  of  the  release,  will  discharge  the  acceptor  in  such  a  case.    9 
East,  847. 

7 17  John.  R.,  170. 

*  Bayley  on  Bills,  ch.  8;  Byles  on  Bills,  ch.  15  and  16;  Mechanics'  Bank  y. 
Hazard,  13  John.  R.,  853 ;  12  Wend.,  470;  15  Wend.,  872. 


438  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

An  intentional  alteration  of  a  bill  of  exchange  or  a  prom- 
issory note  in  any  material  particular,  after  it  has  become  an 
available  security,  without  consent  of  the  parties  interested, 
cancels  or  destroys  the  instrument,  i  Thus,  altering  the 
amount,  or  the  date  by  which  the  time  of  payment  is  post- 
poned, or  the  place  of  payment,  or  the  terms  of  the  acceptance, 
avoids  the  bill  or  note.  2 

An  acceptance  for  honor  is  a  conditional  undertaking  to  pay 
the  billj  when  it  becomes  due,  in  case  the  original  drawee  does 
not.  3  It  is  an  engagement  made  by  a  third  person  after  pro- 
test, supra  protest^  for  the  honor  of  the  drawer,  or  one  of  the 
indorsers;  and  inures  to  the  benefit  of  all  the  parties  subse- 
quent to  him  for  whose  honor  it  is  made.  4  It  is  an  accept- 
ance made  by  a  volunteer,  who  interposes  in  order  to  promote 
the  negotiation  of  the  bill  where  the  drawee's  credit  is  suspect- 
ed, or  to  save  the  reputation  and  prevent  the  suing  of  some  of 
the  parties  where  the  drawee  either  cannot  be  found,  is  not 
capable  of  making  himself  responsible,  or  refuses  acceptance. 
When  it  does  not  specify  particularly  for  whose  honor  it  is 
made,  it  is  to  be  considered  as  made  for  the  honor  of  the 
drawer.  5 

An  acceptor  for  the  honor  of  an  indorser,  stands  in  the 
place  of  his  indorsee,  paying  full  value  for  the  bill,  and  of 

1  Hunt  v.  Adams,  6  Mass.,  519.  Cancelling  the  acceptance  by  mistake  does 
not  have  that  effect.  Kevins  v.  De  Grand.  15  Mass..  436;  19  John.  R.,  391, 
andjcases  there  cited. 

3  Bank  of  U.  S.  v.  Russell,  3  Teates,  391;  3  Cranch,  37,  Goodman  v.  East- 
man, 4  N.  Hamp.,  455;  19  John.  R.,  391 ;  Tidmarsh  v.  Grover,  1  Maule  and 
S.,  735;  Warrington  v.  Early,  22  Eng.  Law  and  Eq.  R.,  208.  Where  a  note 
was  made  payable  five  months  after  date  with  lawful  interest,  and  the  words 
"interest  to  be  paid  at  6/  per  cent,  per  annum."  were  afterwards  writtten  in 
the  corner  of  the  note  without  consent  of  the  maker:  Held,  in  an  action  by 
the  payee  against  the  maker,  that  there  was  a  material  alteration  of  the  note, 
and  that  plaintiff  was  not  entitled  to  recover  in  the  action.  The  insertion  of 
words  in  a  bill,  making  it  "  payable  at  A,"  is  a  material  alteration  of  the  bill; 
so  held  in  an  action  brought  by  a  bona  fide  holder,  Burchfleld  v.  Moore,  25  id. 
123.  The  remedy  of  the  plaintiff  in  such  a  case  is  against  his  immediate 
indorser. 

3  Hoare  v.  Cazenove,  16  East,  391. 

4  Bayley  on  Bills,  ch.  6,  §  1,  p.  99. 

'  Idem ;  Smith's  Mercantile  Law,  284. 


ACCEPTANCE    FOR    HONOR.  439 

course  has  a  remedy  thereon  against  him  and  all  the  prior 
parties,  i  But  the  transaction  does  not  operate  to  give  to  the 
acceptor  for  honor,  any  new  right  which  the  holder  had  not 
at  the  time  of  the  acceptance;  and  hence  the  person  who  pays 
a  bill  under  protest,  for  the  honor  of  an  indorser,  cannot 
recover  in  an  action  against  him,  if  it  appears  that  the  latter 
had  a  good  defence  as  against  the  holder.  2 

The  general  rule  of  law  is  that  no  man  can  constitute  him- 
self the  creditor  of  another  without  his  consent,  express  or 
implied.  3  The  only  exception  to  this  rule  is  the  case  of  an 
acceptance  of  a  bill  under  protest;  and  even  here,  it  is  con- 
ceded that  the  law  may  imply  the  consent  of  the  party  for 
whose  honor  acceptance  is  made,  from  the  nature  of  the  favor 
confered.  But  where  a  bill  has  been  accepted  for  the  accom- 
modation of  the  drawer,  no  person  can  intervene  and  pay  the 
same  for  the  honor  of  the  drawer,  and  thereby  acquire  what 
the  latter  had  not,  namely,  a  right  of  action  against  the 
acceptor.  4 

In  order  to  recover,  the  party  who  pays  a  bill  for  the  honor 
of  the  drawer,  must  prove  presentation  to  the  drawee,  non- 
acceptance  or  non-payment  by  him,  and  notice  to  the  drawer.  5 
That  is  to  say,  he  is  bound  to  establish  a  right  of  action  thereon 
against  the  drawer,  just  the  same  as  if  the  suit  had  been 
brought  in  the  name  of  the  payee  or  any  other  subsequent 
owner  of  the  bill.  6 

In  an  action  against  an  acceptor  for  honor,  and  against  the 
drawer  of  a  bill  that  had  been  so  accepted,  where  a  question 
of  pleading  arose,  Lord  Tenterden,  C.  J.,  speaking  the  opinion 
of  the  King's  bench,  says :  "  Whatever  is  requisite  to  enable 
a  person  who  has  accepted  a  bill  for  the  honor  of  another,  to 

1  Mulford  v.  Walcott,  1  Lord  Raym.,  574;  1  Esp.  R.,  112. 

•  Conig  v.  Bayard,  1  Peters,  250. 

•  6  Term  R.,  310. 

•  Gassam  v.  Armstrong,  3  Dana  R.,  554. 

•  Baring  v.  Clark,  19  Pick.,  220. 

•  Schofleld  v.  Bayard,  3  Wend.,  488.    Notwithstanding  the  bill  has  been  pro- 
tested for  non-acceptance,  if  accepted  tupra  protest   for  the  honor  of  the 
drawers,  payment  must  be  demanded  of  the  drawees,  and  notice  of  non-pay- 
ment given. 


440  BILLS   OF  EXCHANGE  AND  PROMISSORY    NOTES. 

call  upon  that  person  to  repay  him,  and  to  enable  him  to 
recover  over  against  such  person,  may  also  be  reasonably 
held  necessary  to  enable  another  party  to  recover  against  such 
an  acceptor  for  honor.  For  if  you  could  recover  against  an 
acceptor  for  honor  by  proof  of  less  than  will  enable  him  to 
recover  against  the  party  for  whom  he  accepts,  there  would 
be  an  inconsistency;  for  it  might  be  said  with  some  reason, 
that  if  the  acceptor  for  honor  chose  to  pay  without  requiring 
all  the  proof  from  the  holder  which  would  be  necessary  for 
him  to  recover  against  the  drawer,  the  payment  would  be 
made  in  his  own  wrong,  and  he  would  not  be  entitled  to  recover 
over.  It  seems  to  me,  therefore,  that  the  same  rule  as  to 
proof  which  prevails  in  the  case  of  an  acceptor  for  honor,  in 
suing  a  party  for  whose  honor  he  accepts,  must  also  be 
observed  when  the  holder  of  a  bill  sues  the  person  so  accept- 
ing. The  result,  as  it  seems  to  me,  of  the  decision  to  which 
I  have  alluded,  i  is,  that  an  acceptance  for  honor,  is  to  be  con- 
sidered not  as  absolutely  such,  but  in  the  nature  of  a  condi- 
tional acceptance.  It  is  equivalent  to  saying  to  the  holder  of 
the  bill, l  Keep  this  bill,  don't  return  it,  and  when  the  time 
arrives  at  which  it  ought  to  be  paid,  if  it  be  not  paid  by  the 
party  on  whom  it  was  originally  drawn,  come  to  me  and  you 
shall  have  your  money.'  This  appears  to  me  to  be  a  very 
sensible  interpretation  of  the  nature  of  acceptances  for  honor, 
where  the  parties  say  nothing  upon  the  subject.  In  an  action 
by  the  holder  against  the  drawer  of  the  bill,  to  be  sure  he  has 
a  right  to  say,  if  you  keep  it  till  its  time  has  run  out,  you 
ought  to  have  presented  it  to  the  person  on  whom  I  drew  it, 
and  have  seen  whether  on  the  presentment  he  would  pay; 
whereas  you  forbore  to  do  so  and  have  relied  on  an  acceptance 
by  some  person  for  my  honor  made  without  my  authority."  2 

A  stranger  to  the  bill  may,  by  paying  it  for  the  honor  of 
the  parties  generally,  acquire  a  right  of  action  against  all  of 
them,  and  will  be  considered  as  standing  in  the  place  of  a 

1  Hoare  v.  Cazenove,  16  East,  391. 

*  Williams  v.  Germaine  the  elder,  and  the  same  v.  Germaine  the  younger, 
7  Barn,  and  Cress.,  468. 


ACCEPTANCE    FOR   HONOR.  441 

bona  fide  holder.  But  to  entitle  him  to  this  attitude,  he  must 
pay  the  bill,  not  for  the  honor  of  any  one,  but  of  all  the 
parties,  and  not  before  but  after  protest;  and  the  payment 
should  be  accompanied  by  a  declaration  evidenced  by  a 
notarial  act,  shewing  why  and  for  whom  the  payment  was 
made,  and  of  all  this  the  parties  intended  to  be  charged  should 
have  notice.  The  right  of  a  stranger  to  constitute  himself 
the  creditor  of  another,  by  paying  his  debt  without  his  con- 
currence, is  allowed  only  by  the  law  merchant,  for  the  benefit 
of  trade,  and  cannot  be  recognized  unless  the  form  of  pro- 
ceeding sanctioned  by  the  custom  of  merchants  be  substantially 
pursued,  i 

The  acceptor  supra  protest  is  bound  to  notify  without  delay, 
his  acceptance  to  the  person  for  whose  honor  it  was  made;  2 
and  the  party  paying  a  bill,  under  protest,  for  the  honor  of  an 
indorser  must  give  him  reasonable  notice  that  he  has  made 
such  payment  for  his  credit,  or  the  latter  will  not  be  bound  to 
refund.  3 

The  acceptance  of  a  bill  under  protest  being  an  engage- 
ment to  pay  in  case  the  original  drawee  does  not  pay  on 
presentment  when  the  bill  becomes  due,  the  holder  is  of  course 
bound  in  the  first  instance  to  demand  payment  of  the  drawee 
named  in  the  bill,  and  failing  there  he  must  in  the  next  place 
demand  payment  of  the  acceptor  supra  protest.  Where  the 
drawees  and  the  acceptor  for  honor  reside  in  the  same  place, 
this  is  easily  done;  but  where  the  drawees  reside  in  one  place 
and  the  acceptor  in  another,  it  becomes  sometimes  a  question 
of  no  little  difficulty  to  determine  the  proper  course  for  the 
holder  to  pursue.  4  In  England  the  steps  proper  for  him  to 

1  Per  Marshall,  J.,  in  Gazzam  v.  Armstrong's  executors,  8  Dana,  (Ken.  Ct. 
of  Appeals,)  554.  The  party  paying  a  bill  for  the  honor  of  another,  is  sub- 
stituted to  the  rights  of  that  party  as  against  the  other  parties  to  the  bill. 
Conforming  to  the  requirements  of  the  law  merchant,  he  has  also  a  right  to 
look  to  the  party  for  whom  he  pays;  but  not  unless  that  party  is  responsible 
on  the  bill.  An  accommodation  acceptor,  without  effects,  would  not  be  liable 
to  the  drawer;  neither  would  he  be  liable  to  one  who  pays  for  the  drawer. 

*  Code  de  Commerce,  livre  1.  titre  8,  §  4. 

1  Wood  v.  Pugh,  7  Ohio  R.,  part  2,  p.  166. 

*  Mitchell  and  another  v.  Baring  and  others,  10  Barn,  and  Cress.,  4.    The 
bitt  in  this  case  was  drawn  at  Charleston,  in  America,  on  the  18th  of  July. 

26 


442  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

take  are  pointed  out  by  a  statute  which  declares,  "  That  it 
shall  not  be  necessary  to  present  bills  of  exchange  to  such 
acceptors  or  acceptor  for  honor,  or  to  such  referees  or  referee, 
(persons  to  whom  application  is  to  be  made  in  case  of  need,) 
until  the  day  following  the  day  on  which  such  bills  of 
exchange  shall  become  due;  and  that  if  the  place  of  address 
on  such  bill  of  exchange  of  such  acceptors  or  acceptor  for 
honor,  or  of  such  referees  or  referee,  shall  be  in  any  city, 
town,  or  place  other  than  in  the  city,  town  or  place  where 
such  bill  shall  be  therein  made  payable,  then  it  shall  not  be 
necessary  to  forward  such  bill  of  exchange  for  presentment 
for  payment  to  such  acceptors  or  acceptor  for  honor,  or  refe- 
rees or  referee,  until  the  day  following  the  day  on  which  such 
bill  of  exchange  shall  become  due."  i 

Where  a  bill  of  exchange  is  drawn  on  a  firm  residing  and 
doing  business  in  one  place  and  payable  in  another,  and 
accepted  for  the  honor  of  the  drawer  after  protest  for  non- 
acceptance  by  the  drawees,  it  is  not  necessary  to  present  it 
to  them  again  at  their  place  of  business  for  payment;  2  for  it 
is  not  payable  there. 

1  6  and  1,  Wm.  4,  c.  58,  passed  in  1836. 

3  10  Barn,  and  Cress.,  4;  3  Wend..  488.    The  statute  of  2  and  3  Will.  4,  c, 
98,  declares  the  law  substantially  as  it  had  stood  before  its  passage. 

1825.  "  Sixty  days  after  sight  of  this  my  first  of  exchange,  second,  third, 
and  fourth  unpaid,  pay  to  Messrs.  Le  Roy,  Bayard  &  Co.,  or  order,  in  London, 
500/  sterling,  value  received,  and  place  to  account,  as  advised  by  James  Butler 
Clough.  To  Messrs.  Crowder,  Clough  &  Co.,  Liverpool;"  it  was  indorsed  by 
the  payees  to  the  plaintiffs.  When  presented  to  the  drawees  for  acceptance  it 
was  refused,  they  having  previously  stopped  payment.  The  plaintiffs  then 
applied  to  the  defendants  who  were  correspondents  of  the  payees,  and  they 
accepted  the  bill  in  these  terms  :  "  Accepted  under  protest,  for  honor  of 
Messrs.  Le  Roy,  Bayard  &  Co.,  p.  3173,  and  will  be  paid  for  their  account  if 
regularly  protested,  and  refused  when  due."  Held,  in  an  action  against  the 
acceptor  for  honor,  that  by  the  special  form  of  the  acceptance,  a  presentment 
for  payment  to  the  drawee  in  Liverpool,  a  refusal  by  him,  and  a  protest  there 
were  necessary;  and  that  the  bill  was  properly  presented  for  payment  there  on 
the  day  it  became  due.  In  the  above  case,  where  the  bill  was  accepted  for 
honor  in  London,  it  would  not  ordinarily  be  feasible  for  the  holder  to  demand 
payment  of  the  original  drawees  in  Liverpool,  and  of  the  acceptor  for  honor 
in  London  on  the  same  day.  See  the  case  disclosed  in  Schofield  v.  Bayard,  3 
Wend.,  488,  in  which  some  of  the  parties  are  the  same,  and  the  circumstances 
are  quite  similar  to  those  mentioned  above. 

• 


ACCEPTANCE    FOR    HONOR. 


443 


The  holder  of  a  bill  of  exchange  is  not  obliged  to  receive 
an  acceptance  supra  protest;  i  but  if  he  does  receive  it,  he 
takes  upon  himself  the  burden  of  performing  all  those  acts 
which  are  necessary  to  charge  the  acceptor  for  honor.  It  is 
a  waiver  of  his  right  to  immediate  recourse  to  prior  parties; 
and  makes  that  right  dependent  upon  his  taking  the  steps 
required  by  the  law  merchant  in  order  to  charge  the  acceptor, 
and  also  the  other  parties  again  in  case  he  fails  to  pay.  2  The 
transaction  is  wholly  changed,  as  soon  as  a  third  person  inter- 
venes and  accepts  the  bill.  The  theory  is  that  the  acceptor 
gives  immediate  notice  to  the  parties  for  whom  he  accepts, 
and  that  they  take  early  measures  to  meet  the  altered  rela- 
tions into  which  they  are  brought  by  this  act  of  intervention ; 
so  that  if  the  holder  is  guilty  of  laches  in  presenting  the  bill 
for  payment,  first  to  the  drawee  and  afterwards  to  the  acceptor 
for  honor,  and  causing  it  to  be  duly  protested  in  each  instance 
in  case  of  non-payment,  the  party  for  whose  credit  the  accept- 
ance was  made  is  discharged.  3 

The  protest  for  non-payment  by  the  drawee  is  essential,  both 
to  charge  the  acceptor  for  honor,  and  to  give  him  a  right  of 
action  thereon  against  the  party  for  whom  he  accepts.  4  And 
the  protest  for  non-payment  by  the  acceptor  is  necessary  for 
the  protection  of  the  holder — for  the  purpose  of  insuring  his 
right  of  recourse  to  previous  parties. 

1  Mulford  v.  Wolcott,  12  Mod.,  410 j  1  Ld.  Raym.,  575;  2  Campb.,  447. 

•  3  Wend.,  488. 

'  Such  is  the  result  of  the  decision  in  Schofleld  v.  Bayard,  3  Wendell. 

4  Barring  v.  Clark,  19  Pick.,  220.  One  who  accepts  for  the  honor  of  the 
drawer,  must  shew,  in  order  to  recover  against  him,  presentment  to  the  drawee 
for  payment,  protest,  and  notice  to  the  drawer. 


CHAPTER   VIII. 

OF  NON-ACCEPTANCE,  AND  PROCEEDINGS  THEREON. 

The  proceedings  necessary  to  be  taken  by  the  holder  on  a 
refusal  of  the  drawee  to  accept,  are  the  same  in  most  respects 
as  are  required  to  be  taken  by  him  in  the  case  of  non-pay- 
ment of  a  bill  of  exchange,  or  of  a  promissory  note.  The 
principles  applicable  to  the  giving  of  notice  to  the  drawer  and 
indorsers  are  under  the  law  merchant  the  same  in  either  case, 
and  will  be  considered  together  in  a  subsequent  chapter; 
while  in  this  connection,  it  is  deemed  advisable  to  consider 
briefly  the  rules  more  immediately  relating  to  the  conduct 
that  should  be  pursued  by  the  holder,  where  the  bill  is  dis- 
honored by  non-acceptance. 

Each  of  the  successive  indorsers  is  a  new  drawer,  and  the 
contract  of  the  drawer  is  an  undertaking  to  pay  the  bill  on 
certain  conditions;  so  that  if  the  holder  fails  to  comply  with 
these  conditions,  his  remedy  on  the  contract  is  lost.  Bearing 
in  mind  this  relation  of  the  parties,  we  shall  find  the  rule 
requiring  immediate  notice  of  non-acceptance  to  be  given  to 
the  persons  to  be  charged,  is  not  an  arbitrary  rule,  though 
prescribed  by  a  law  that  demands  diligence  and  does  not  tole- 
rate laches  or  neglect  in  the  holder. 

Bills  drawn  payable  a  certain  length  of  time  after  date,  need 
not  be  presented  for  acceptance;  but  if  presented  and  accept- 
ance be  refused,  the  same  proceedings  must  be  taken  as  in 
other  cases,  i  And  if  the  notice  of  dishonor  be  not  properly 
given,  the  neglect  will  operate  as  a  discharge  of  the  drawer 

'Allen  v.  Suydam,  20  Wend.,  321;  Townsley  v.  Sumrall,  2  Peters,  170 ; 
Goodallv.  Dolley,  1  Term  R.,  712;  3  Taunt.,  130 ;  16  East,  43. 


NON-ACCEPTANCE  AND   PROCEEDINGS   ON.  445 

and  indorsees,  not  only  from  liability  on  the  bill  but  also  from 
liability  on  the  consideration  for  which  it  was  given,  i  It  is 
otherwise  where  the  holder  can  show  a  right  of  recovery 
on  other  grounds,  independently  of  the  notice.  2 

When  a  debtor  gives  to  his  creditor  a  draft  or  bill  of  exchange 
drawn  on  a  third  person,  and  it  is  received  in  full  satisfaction 
of  the  debt  when  paid;  the  person  so  receiving  it  assumes  the 
duty  of  presenting  it  properly  for  acceptance  and  payment, 
and  giving  timely  notice  of  its  dishonor.  Failing  in  either  of 
these  respects,  he  makes  the  bill  his  own,  and  it  is  deemed  a 
satisfaction  of  the  debt.  3  So  where  a  merchant  buys  a  bill  of 
goods  and  gives  a  bill  of  exchange  in  payment  of  the  purchase 
money,  the  vendor  cannot  recover  in  an  action  for  the  goods 
sold  without  shewing  that  the  drawer  has  been  regularly 
charged  on  the  bill.  4  Whether  the  bill  is  received  as  condi- 
tional payment,  or  on  an  agreement  so  to  apply  the  money  when 
collected,  does  not  alter  the  principle;  for  the  duty  of  present- 
ing the  bill  results  from  the  nature  of  the  security.  On  the 
same  ground,  the  note  of  a  third  person  received  on  account 
of  a  pre-existing  debt  may  operate  as  payment  if  the  creditor 
parts  with  the  note,  or  is  guilty  of  laches  in  not  presenting  it 
for  payment  in  due  time.  5 

The  general  rule  is  that  a  failure  to  give  the  drawer  and 
indorsers  notice  of  non-acceptance  discharges  them :  the  notice 
is  required  so  that  these  parties  may  take  prompt  measures  of 

1  Blessard  v.  Hurst,  Burr.,  2670;  Backer  v.  Hillcr,  16  East,  43;  Higgins  v. 
Morrison,  4  Dana,  102;  5  Mete.,  216. 

'  Franklin  v.  Smith,  21  Wend.,  624.  An  action  cannot  be  sustained  against 
a  notary  for  neglect  to  give  proper  notice,  where  the  holder  has  a  right  to 
recover,  notwithstanding  the  neglect;  as  where  the  maker  has  agreed  with  the 
indorser  of  a  note  that  the  latter  shall  pay  it.  Van  Wart  v.  Woolley,8  Barn, 
and  Cress.,  439;  6  Dowl.  and  Ry.,  374;  5  Maule  and  Sol.,  62.  ' 

»  Dayton  v.  Trull,  28  Wend.,  846. 

4  Jones  v.  Savage,  6  Wend.,  658.  The  same  rule  applies  where  the  pur- 
chaser pays  in  a  note  of  a  third  person,  which  he  indorses;  if  the  vendor  of 
the  goods  neglects  to  demand  the  note,  and  give  notice  to  the  indorser  so  as  to 
charge  him,  he  has  made  the  note  his  own,  and  must  rely  upon  the  solvency 
of  the  maker. 

'  Tobey  v.  Barber,  5  John.  R.,  68;  see  also  authorities  cited  by  Bronson,  J., 
in  Dayton  v.  Trull,  above. 


446  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES* 

self-protection;  the  drawer  by  withdrawing  them  or  with- 
holding the  farther  accumulation  of  effects  in  the  hands  of 
the  drawee,  and  the  indorsers  by  obtaining  or  securing  pay- 
ment from  the  parties  respectively  liable  to  them,  i  It  is 
important  to  bear  in  mind  the  ground  on  which  this  rule  is 
founded.  Upon  the  maxim  that  where  the  reason  for  a  rule 
of  law  does  not  exist,  it  ought  not  to  be  applied,  it  has  fre- 
quently been  decided  that  where  the  non-payment  by  the 
maker  and  failure  of  notice  to  the  indorser  cannot  possibly 
operate  to  the  injury  of  the  latter,  the  omission  will  not  dis- 
charge him  :  2  as  where  the  indorser  is  himself  the  debtor,  the 
note  or  bill  being  discounted  for  his  accommodation,  and  the 
money  raised  upon  it  received  by  him;  3  or  where  he  has 
taken  the  entire  effects  of  the  maker  into  his  hands,  or 
enough  of  them  to  indemnify  him  against  the  liability  assumed. 4 
Obviously  the  same  rule  applies  in  like  cases  where  there  has 
been  a  failure  to  give  notice  of  non-acceptance. 

The  presumption  always  is,  that  the  drawer  and  indorser 
are  injured  by  the  failure  to  give  them  due  and  regular  notice 
that  the  bill  has  been  dishonored :  prima  facie  they  are  dis- 
charged, where  the  holder  neglects  to  give  them  notice  of  the 
dishonor,  whether  that  occurs  by  the  non-acceptance  or  non- 
payment of  the  bill;  and  if  the  holder  seeks  to  recover  against 
them  notwithstanding  the  want  of  notice,  the  burden  of 
proof  is  with  him  to  shew  clearly  that  no  injury  or  damage 
has  been  or  could  be  sustained  in  consequence  of  the  omis- 
sion. 5 

1  Chitty  on  Bills,  326;  Commercial  Bank  of  Albany  v.  Hughes,  17  "Wend., 
94. 

4  Mechanics'  Bank  of  N.  T.  v.  Griswold,  17  Wend.,  165,  The  question  pre- 
sented in  this  case  was,  whether  the  indorser  of  a  promissory  n.ote,  who,  before 
the  note  fell  due,  took  an  assignment  of  all  the  property  and  estate  of  the 
makers  for  the  express  purpose  of  meeting  his  responsibilities,  was  entitled  to 
the  usual  notice  of  non-payment. 

3  Agan  v.  McManus,  11   John.  R.,  180;  French  v.  Bank  of  Columbia,  2 
Peters'  condensed  R.,  64;  1  John.  Gas.,  99. 

4  Bond  v.   Farnham,  5  Mass.  R.,  170;  Corney  v.  Dacosta,  1  Esp.  R.,  302; 
Barton  v.  Baker,   1   Serg.  and  Rawle,  334;  15  East,  222;  Seacord  v.  Miller, 
3  Kernan  R.,  55. 

*  17  Wend.,  94,  and  cases  cited  by  the  court. 


NON-ACCEPTANCE   AND    PROCEEDINGS    OX.  447 

In  some  of  the  early  cases,  it  was  held  incumbent  on  the 
drawer  insisting  on  the  want  of  notice,  to  shew  that  he  had 
really  sustained  damage  by  the  neglect  of  the  holder  in  this 
particular;!  but  the  later  decisions  uniformly  place  the 
burden  of  proof  on  the  party  that  has  been  guilty  of  laches.  2 

The  drawer  of  a  bill  of  exchange  payable  after  date  is  not 
discharged  by  the  want  of  notice  of  non-acceptance,  where 
the  bill  has  passed  into  the  hands  of  a  bona  fide  indorsee  for 
value,  who  took  the  same  before  its  maturity,  having  no 
knowledge  of  the  dishonor.  3  The  rule  here  yields  to  one  of 

1  Magadora  v.  Holt,  1  Shower,  317.  The  marginal  note  is  in  these  words: 
''  In  an  action  by  the  indorsee  against  the  drawer  of  a  bill  of  exchange,  if  the 
declaration  allege  the  custom  to  be  that  the  drawer  is  liable  on  non-payment 
by  the  acceptor,  and  it  appears  that  the  bill  was  not  presented  until  after  it 
was  due,  yet  the  plaintiff  shall  recover;  for  the  drawer  always  remains  liable, 
and  the  setting  forth  of  the  custom  shall  be  rejected  as  surplusage  "  Eyres. 
Justice  :  "  Now  if  there  be  no  accident  happening  or  intervening,  by  the  par- 
ties breaking,  or  the  like,  the  drawer  is  chargeable,  though  the  presenting  of 
the  bill  and  protest  were  after  the  day ;  for  by  the  law  of  merchants  it  need 
not  be  tendered." 

Maggadow  v.  Holt,  12  Mod.,  15.  The  defendant  drew  a  bill  on  W,  a  mer- 
chant at  Rotterdam,  payable  to  II  within  two  usances  and  a  half,  namely,  two 
months  and  a  half;  the  custom  was  alleged,  and  assigned  to  plaintiff.  Per 
Curiam;  judgment  for  plaintiff.  First,  The  law  of  merchants  is  jut  gentium, 
and  part  of  the  common  law;  and  therefore  we  ought  to  take  notice  of  it, 
when  set  forth  in  pleading.  The  law  of  merchants  in  this  case  is,  that  if  he 
who  has  such  a  bill  lapse  his  time,  and  do  not  protest  or  make  his  request,  if 
any  accident  happen  by  this  neglect  in  prejudice  to  the  drawer,  he  hath  lost 
his  remedy  against  him ;  but  if  such  a  thing  had  happened,  it  ought  to  have 
come  of  the  other  side;  and  not  being  so  we  must  judge  on  the  declaration. 
It  is  not  necessary  to  shew  the  custom  of  merchants,  but  it  is  necessary  to 
shew  how  the  usance  shall  be  intended,  because  it  varies  as  places  do;"  decided 
in  the  3  Wm.  and  Mary. 

1  See  authorities  cited  by  Cowcn,  J.,  in  Commercial  Bank  of  Albany  v. 
Hughes,  tupra. 

1  O'Keefe  v.  Dunn.  1  Marsh.,  613.  The  payee  of  a  bill  of  exchange  having 
presented  it  for  acceptance,  which  was  refused,  indorses  it  to  the  plaintiff  for 
value,  without  giving  notice  of  the  dishonor,  either  to  the  drawer  or  to  the 
indorsee.  The  latter  presents  it  and  it  is  again  refused  acceptance,  of  which 
the  drawer  receives  due  notice.  Held  that  the  drawer  was  not  discharged  from 
his  liability  to  the  indorsee,  by  the  payee's  neglect  to  give  notice  of  the  pre- 
vious dishonor.  The  bill  was  payable  one  month  after  date.  Dallas,  J.: 
"  The  nature  of  the  contract  is,  that  the  drawer,  by  drawing  the  bill  payable 
to  the  order  of  the  payee,  holds  himself  out  as  liable,  in  default  of  the  drawee, 
and  to  all  who  shall  come  fairly  into  the  possession  of  it.  He  does  not  stipu- 


448  BILLS    OF   EXCHANGE  AND   PROMISSORY  NOTES. 

superior  importance;  for  it  is  considered  of  greater  moment 
to  the  business  community  to  protect  the  person  who  takes  the 
bill  in  good  faith  and  for  value,  than  to  enforce  rigidly  the 
rule  requiring  notice  of  the  dishonor.  To  be  sure,  the  prin- 
ciple operates  to  permit  the  holder,  who  has  been  guilty  of 
laches,  to  transfer  a  right  of  recovery  that  has  been  lost  or 
forfeited  by  his  negligence.  But  it  often  happens  that  the 
holder  of  negotiable  paper  transfers  a  perfect  right  of  action, 
where  he  himself  does  not  possess  any  that  is  available,  i  This, 
however,  cannot  be  done,  in  the  instance  just  mentioned, 
where  the  bill  remains  in  the  hands  of  the  negligent  holder 
until  after  it  becomes  due;  2  nor  where  the  purchaser  has 
knowledge  of  the  laches.  3  And  it  is  to  be  further  observed 
that  some  stress  is  laid  upon  the  circumstance  that,  the  bill 
being  payable  a  certain  length  of  time  after  date,  the  holder 
is  not  bound  to  present  the  same  for  acceptance  until  it 
becomes  due;  so  that  the  drawer  cannot  complain  of  the 
delay. 

The  necessity  of  giving  the  drawer  notice  of  non-acceptance 
is  created  by  the  law  of  the  place  where  the  bill  is  drawn; 
and  hence  no  notice  need  be  given  where,  as  in  Pennsylvania, 
the  local  law  does  not  require  a  protest  for  or  notice  of  non- 
acceptance.  4 

1  6  Wend.,  615;  2  Hill,  499;  20  John.  R.,  637. 

8  Roscoe  v.  Hardyr12  East.  484. 

*  Crossly  v.  Ham,  13  East,  498;  Brown  v.  Davis,  1  Term.  R.,  80. 

4  Allen  v.  Merchant's  Bank  of  N.  Y.,  22  Wend.,  215;  Brown  v.  Barry,  3 
Dallas  R.,  365;  Clarke  v.  Russell,  id.  415;  S.  C.,  cited  6  Serg.  and  Rawle, 
358;  3  Kent's  Com.,  95,  7th  ed.  "  The  English  law  requiring  protest  and 
notice  of  non-acceptance  of  foreign  bills,  has  been  adopted  and  followed  as 
the  true  rule  of  mercantile  law  in  the  states  of  Massachusetts,  Connecticut, 
New-York,  Maryland,  Virginia,  North  Carolina  and  South  Carolina.  But  the 
Supreme  court  of  the  United  States,  in  Brown  v.  Barry,  and  in  Clarke  T. 


late  that  it  shall  be  presented  for  acceptance,  nor  does  the  law  cast  such  an 
obligation  on  the  payee ;  he  must  therefore  be  content  to  rest  in  ignorance  as 
to  the  fate  of  it,  till  it  becomes  payable."  The  only  objection  to  this  view  of 
the  case  is  this,  the  holder  having  lost  his  remedy  by  laches  confers  on  the 
purchaser  a  right  of  recovery  which  he  has  not.  On  error,  the  judgment  of  the 
common  pleas  was  affirmed,  5Maule  &,  Sel.,  282. 


KON- ACCEPTANCE   AKD   PROCEEDINGS   OH.  i  i  3 

On  the  contract  as  generally  construed,  the  drawer  of  a  bill 
of  exchange  is  entitled  to  notice  of  non-acceptance  or  non- 
payment; but  there  are  certain  exceptions  to  this  rule  which 
are  not  only  consistent  with  it,  but  actually  grow  out  of  the 
reason  on  which  it  is  founded.  If  the  drawer  has  no  funds, 
and  knows  that  he  has  none,  in  the  hands  of  the  drawee,  and 
no  right  to  expect  that  his  bill  will  be  honored,  he  is  not 
entitled  to  notice  of  its  dishonor,  i  Drawing  under  such  cir- 
cumstances, if  not  a  fraud,  as  it  was  considered  in  one  case, 
does  not  give  the  drawer  a  right  to  insist  upon  the  rule 
requiring  notice.  2  Some  of  the  decisions  to  this  effect  are 
placed  upon  the  ground  that  he  is  not  injured  by  the  omission;  3 

1  Warden  v.  Tucker,  7  Mass.  R.,  452;  Eichelberger  v.  Finley,  7  Harr.  and 
Johns.,  381 ;  Lilley  v.  Miller,  2  Nott  and  M'Cord,  267,  notej  Conroy  v.  War- 
ren, 8  John.  Cas.,  269;  Murray  v.  Judah,  6  Cowen,  484. 

1  Bickerdike  v.  Bollman.  1  Term  R.,  406.  This  is  considered  the  first  case 
dispensing  with  the  usual  notice;  the  drawer  had  no  funds  and  knew  he  had 
none  in  the  hands  of  the  drawee,  and  the  drawing  of  the  bill  was  considered  a 
fraud.  See  opinion  of  Ch.  J.  Spencer,  in  Robinson  v.  Ames,  20  John.  R.,  146. 

1  Hubble  v.  Fogartie,  8  Richardson  (So.  Car.,)  R.,  418. 


Russell,  held  that  in  an  action  on  a  protest  for  non-payment  on  a  foreign  bill, 
protest  for  non-acceptance,  or  a  notice  of  non-acceptance,  need  not  be  shewn, 
inasmuch  as  they  were  not  required  by  the  customs  of  merchants  in  this 
country,  and  those  decisions  have  been  followed  in  Pennsylvania;  protest  for 
non-payment  i*  sufficient.  It  becomes  therefore  a  little  difficult  to  know  what 
is  the  true  rule  of  the  law  merchant  in  the  United  States  on  this  point,  after 
such  contradictory  decisions.  The  Scotch  law  is  the  same  as  the  English;  and 
it  appears  to  me  that  the  English  rule  is  the  better  doctrine,  and  the  most  con- 
sistent with  commercial  policy."  Mr.  Justice  Story  states  the  law  on  this 
subject  according  to  the  English  rulings;  Story  on  Billt,  §.273  and  note,  and 
intimates  that  the  Supreme  court  of  the  U.  S.,  would  now  hold  the  rule  as 
formerly  laid  down,  "  only  upon  the  ground  of  the  local  law  of  Pennsylvania, 
as  to  bills  drawn  or  payable  there."  And  it  is  very  certain  that  this  is  the 
general  rule  in  this  country.  As  to  inland  bills,  there  is  not  much  uniformity 
of  legislation  in  the  different  states;  but  as  to  foreign  bills,  there  has  been  but 
little  innovation  on  the  common  law.  Watson  v.  Loring,  3  Mass.,  667;  Sterry 
v.  Robinson,  1  Day's  R.,  11;  Mason  T.  Franklin.  8  John.  R.,  202;  4  id.  144; 
Winthrop  v.  Pepoon,  1  Bay's  R.,  468;  Philips  v.  McCurdy,  1  Harr.  and  Johns., 
187;  Thompson  v.  Cummings,  2  Leigh's  R.,  821;  see  Statutes  of  the  different 
states,  notes  p.  264-286;  see  also  Glasgow  T.  Copeland,  8  Mis..  268;  4  How. 
Miss.,  667;  Riggs  v.  McDonald,  1  Ala.,  641;  United  States  T.  Barker,  Paine, 
166;  14  Mass.,  116;  2Dall.,  192;  1  Yeates,147;  Denniston T.  Imbrie,  8  Wash. 
C.  C.,  396;  London  v.  Howard,  2  Hayw.,  882>  2  Marsh.,  616. 


450  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

and  others  upon  the  principle  that  having  no  right  to  draw 
he  is  not  in  a  position  to  insist  upon  a  strict  compliance  with 
the  terms  of  the  contract  raised  or  implied  by  law.  i 

The  mere  fact  that  the  drawer  has  no  funds  or  effects  in  the 
hands  of  the  drawee,  is  not  alone  sufficient  to  excuse  the  want- 
of  notice,  if  it  appears  that  the  drawer  had  a  reasonable 
expectation  that  his  bill  would  be  accepted  and  paid.  2  In 
other  words,  the  exception  is  subject  to  important  qualifica- 
tions; and  it  has  been  frequently  decided  that  where  there 
are  dealings  between  the  parties,  and  there  is  a  fluctuating 
balance  between  them,  or  where  the  drawer  has  from  any 
cause,  reason  to  believe  that  he  has  at  the  time,  or  will  have 
funds  in  the  hands  of  the  drawee,  when  the  bill  becomes  due, 
he  is  entitled  to  notice;  and  a  fortiori,  he  is  entitled  to  have 
the  bill  duly  presented.  3  Drawing  without  funds,  where 
there  is  no  agreement  or  relation  of  business  existing  between 
the  drawer  and  the  drawee,  authorizing  the  draft,  is  quite  a 
different  transaction;  for  in  this  case  the  drawer  has  not  even 
a  fair  pretence  for  drawing,  and  no  reason  whatever  can  be 
assigned  why  he  should  be  notified  of  a  fact  which  he  must 
have  anticipated  from  the  first.  4  On  the  same  principle, 
though  a  person  draw  on  funds,  yet  if  he  withdraw  them 
without  giving  any  notice  to  the  drawee  that  he  has  drawn 
on  him,  and  intercepts  and  prevents  other  funds  from  coming 
into  the  hands  of  the  drawee,  and  provides  no  means  of  pay- 
ment, he  is  not  entitled  to  notice.  5  So,  where  the  drawer  of 
the  bill  forbids  the  drawee  to  pay  it  when  presented,  and  the 
latter  so  informs  the  payee  and  holder  before  it  becomes  pay- 
able, it  is  not  necessary  for  the  holder  to  present  it  for  payment 
when  due,  or  to  give  the  drawer  notice  of  the  dishonor.  6  In 
cases  like  these,  aside  from  the  bad  faith  manifested,  it  would 

1  6  Wend.,  369;  7  id.  60;  21  Pick.,  327;  3  Ohio,  307. 

2  French's  executrix  v.  Bank  of  Columbia,  4  Cranch.  R.,  141. 

'Legge  v.  Thorpe,  12  East,  171;  2  Campb.  R.,  503;  3  id.  334;  Brown  v. 
Maffy,  15  East,  216;  Rucker  v.  Hiller,  16  East,  43;  Caridge  v.  Dalton,  4 
Maule  and  Selw.  R.,  226;  Campbell  v.  Pettengill,  7  Greenl.,  126. 

*  Baker  v.  Gallagher,  1  Wash.  C.  C.  R.,  461. 
8  Valk  v.  Simmons,  4  Mason  R.,  113. 

*  Lilley  v.  Miller,  2  Nott  and  McCord,  257.  note. 


NON-ACCEPTANCE   AND   PROCEEDINGS    OX.  451 

be  idle  to  notify  the  drawer  of  an  event  which  he  has  himself 
taken  care  to  render  inevitable. 

There  is  a  great  variety  of  cases  in  which  the  drawer  is 
entitled  to  regular  notice,  notwithstanding  he  has  at  the  time 
of  drawing  no  funds  or  effects  in  the  hands  of  the  drawee  : 
As  where  he  draws  in  pursuance  of  a  previous  agreement,  or 
on  an  understanding  that  the  drawee  is  to  advance  on  property 
to  be  consigned  to  him  for  sale,  or  in  the  anticipation  of  funds 
from  other  sources,  or  on  the  strength  of  an  established  course 
of  dealing,  i  Take  the  case  of  a  running  account :  the  drawer 
is  largely  indebted  to  the  drawee,  but  has  effects  in  his  hands 
to  a  much  larger  amount  than  the  bill  drawn.  Lord  Ellen- 
borough  :  "  If  a  man  draws  upon  a  house  with  whom  he  has 
no  account,  he  knows  that  the  bill  will  not  be  accepted;  he 
can  suffer  no  injury  from  want  of  notice  of  its  dishonor,  and 
therefore  he  is  not  entitled  to  such  notice;  but  the  case  is 
quite  otherwise  where  the  drawer  has  a  fluctuating  balance  in 
the  hands  of  the  drawee;  there  notice  is  peculiarly  requisite. 
Without  this,  how  can  the  drawer  know  that  credit  has  been 
refused  to  him,  and  that  his  bill  has  been  dishonored  ?  It  is 
said  here,  that  the  effects  in  the  hands  of  the  drawee  were  all 
appropriated  to  discharge  his  own  debt;  but  that  appropria- 
tion should  appear  by  writing,  and  the  defendant  should  be  a 
party  to  it."  2  In  a  similar  case,  where  the  drawee  was  in 
funds  at  the  time  the  bill  was  drawn,  but  the  balance  had 
shifted  to  the  other  side  of  the  ledger  before  it  was  presented, 
the  same  decision  was  made.  3 

When  a  bill  is  drawn  merely  for  discount,  and  without  any 
expectation  that  it  will  be  accepted  and  paid  by  the  drawee, 
as  where  it  is  drawn  and  indorsed  for  the  accommodation  of 

'4  Cranch.  141 ;  20  John.  R.,  146. 

*  Blackman  v.  Dorcn,  2  Campb.,  503.  His  Lordship  in  this  case,  regretted 
that  notice  had  ever  been  dispensed  with. 

1  Orr  v.  Maginnis,  7  East  R.,  859.  At  the  trial  it  appeared  that  at  the  time 
of  drawing  the  bill  the  defendant  had  effects  in  the  hands  of  the  drawee,  bnt 
to  what  amount  did  not  appear;  but  when  the  bill  was  presented  for  accep- 
tance, and  thence  until  presentment  for  payment  he  had  not  any.  And  the 
plaintiff  was  non-suited.  This  case  is  distinguishable  from  Valk  v.  Simmons, 
where  the  drawer  withdrew  his  funds  and  intercepted  so  as  to  prevent  others 
from  coming  into  the  hands  of  the  drawee,  4  Mason,  113. 


452  BILLS  OF  EXCHANGE  AND    PROMISSORY   NOTES. 

the  drawer,  notice  of  non-acceptance  is  not  necessary,  i  So 
where  the  drawer  addresses  his  bill  to  the  drawee  at  a  particu- 
lar place,  and  it  appears  that  he  never  lived  there,  and  that 
the  drawer  did  not  act  fairly  in  the  premises,  it  is  very  evi- 
dent that  he  has  no  right  to  expect  notice  of  non-acceptance.  2 
Dealing  in  bad  faith,  by  drawing  upon  a  house  on  which  he 
has  no  right  to  draw,  or  upon  a  man  as  residing  at  a  particu- 
lar place  where  he  never  did  reside,  justly  deprives  the  drawer 
of  the  right  to  insist  upon  notice.  3 

Want  of  funds  in  the  hands  of  the  drawee  is  generally 
speaking  no  excuse  for  not  giving  notice  to  the  indorser  of  a 
bill.  "  Had  this  action  been  brought  against  the  drawers  of 
the  bill  of  exchange  declared  on,  as  they  had  no  effects  in  the 
hands  of  the  drawees,  a  want  of  notice  could  not  have  availed 
them.  But  an  indorser  is  entitled  to  reasonable  notice  of  a 
protest  for  non-acceptance,  whether  the  drawer  has  effects  in 
the  hands  of  the  drawee  or  not,  for  the  purpose  of  enabling 
him  to  secure  himself  against  the  drawer,  if  he  should  eventu- 
ally be  holden  to  pay  the  bill."  4  In  ordinary  cases  the 
indorser  is  not  acquainted  with  the  particular  relations  subsis- 
ting between  the  drawer  and  the  drawee  j  and  it  is  clear  that 

farmer's  Bank  v.  Vanmeter,  4  Rand.,  658.  Where  the  purpose  is  not 
merely  to  fabricate  paper  for  discount,  the  parties  are  to  be  treated  as  in  other 
cases.  Carter  v.  Flower,  16,  Mees.,  and  W.,  743.  Assumpsit  on  a  promissory 
note  by  indorsee  against  indorser.  The  declaration  alleged  that  the  note  had 
been  indorsed  to  the  plaintiff  by  the  payee,  and  averred  "  that  neither  at  the 
time  when  the  note  was  made,  nor  afterwards,  and  before  it  became  due,  nor 
when  it  became  due,  and  on  presentment  for  payment,  had  the  maker  or  payee 
any  effects  of  the  defendant  in  his  hands,  nor  was  there  any  consideration  or 
value  for  the  making  of  the  note,  of  the  payment  thereof,  or  its  indorsement 
by  the  payee  to  the  defendant ;  and  that  the  defendant  had  not  sustained  any 
damage  by  reason  of  his  not  having  had  notice  of  the  non-payment  of  the 
note.  Special  demurrer.  Held  that  as  against  an  indorser  the  declaration  was 
bad,  for  not  stating  a  sufficient  excuse  of  want  of  notice  of  dishonor ;  for  it 
was  consistent  with  its  allegations,  that  the  note  might  have  been  indorsed  by 
the  defendant  for  the  accommodation  of  one  of  the  prior  parties  to  it,  in  which 
case  the  defendant  would  be  entitled  to  notice  of  dishonor. 

a  Camming  v.  Fisher,  Anthon  N.  P.,  1  N.  a. 

8  Dolfus  v.  Frosh,  1  Denio  R.,  367;  Walwin  v.  St.  Quintin,  1  Bos.  andPull., 
652. 

4  Warden  v.  Tucker,  7  Mass.  R.,  450. 


NON-ACCEPTANCE   AND   PROCEEDINGS   ON.  453 

he  is  not  in  general  affected  by  those  relations,  i  It  has, 
however,  been  held  in  some  cases,  that  if  the  indorser  know 
of  the  maker's  absolute  and  recorded  insolvency  at  the  time 
of  the  note's  falling  due,  that  is  enough;  though  nothing 
short  of  that  will  do.  2  And  it  has  been  decided  in  one  case, 
that  notice  to  the  indorser  of  non-acceptance  or  non-payment 
need  not  be  given,  where  the  bill  is  indorsed  for  the  accom- 
modation of  the  drawer  with  no  expectation  that  it  would  be 
honored.  3  But  that  was  plainly  a  case  of  fraud,  in  which 
the  indorser  was  implicated.  In  deciding  it  the  court  say  : 
"  with  the  exception  of  the  cases  in  which  it  can  be  shewn 
that  they  could  not  by  possibility  suffer  any  injury  by  the 
failure  to  give  them  notice,  the  drawer  and  indorser  have  in 
all  cases  a  right  to  strict  notice,  unless  they  waive  that  right, 
or  forfeit  it  by  their  own  fraud.  I  do  not  find  this  ground  of 
fraud  very  distinctly  laid  down  as  a  reason  for  dispensing 
with  notice;  but  there  are  many  cases  in  which  it  appears 
to  have  been  the  sole  ground  of  the  judgment,  and  in  which  the 
principle  is  distinctly  alluded  to." 

Fraud  in  the  other  parties  to  the  bill  does  not  deprive  the 
indorser  of  his  right  to  notice,  where  he  is  not  privy  to  the 
fraud.  4  And  the  mere  fact  that  the  drawer  has  no  funds  in 
the  hands  of  the  drawee,  though  known  to  the  indorser,  does 
not  deprive  the  latter  of  his  right  to  insist  upon  the  usual 
notice.  5 

1  Jackson  v.  Richards,  2  Cainos  R.,  343.  In  this  case  the  indorser  of  a  note 
for  the  credit  of  the  drawer,  with  knowledge  of  his  insolvency,  was  held  enti- 
tled to  regular  notice.  Gower  v.  Moore,  25  Maine,  16,  is  a  like  case,  with  the 
same  ruling. 

*  Clark  T.  Minton's  admz.,  cited  2  Const.  R.,  682;  Kiddell  v.  Ford,  id.  678. 

*  Farmer's  Bank  v.  Vanmeter,  4  Rand.  (Virginia,)  R.,  653. 
4Leach  v.  Hewitt,  4  Taunt.,  781. 

*  Norton  v.  Pickering,  8  Barn,  and  Cress.,  610.    A  draws  upon  B  for  the 
accommodation  of  C,  and  the  latter  indorses  it  for  value  to  D.    Neither  A  nor 
C  has  any  effects  in  the  hands  of  the  drawee,  and  the  bill  is  dishonored.     Held 
that  the  drawer  was  entitled  to  notice.     Lord  Tenterden  :  ''  It  may  be  ques- 
tionable whether  it  might  not  have  been  more  conducive  to  the  interests  of 
commerce  to  have  decided  that  the  holder  of  a  bill  is  not  at  liberty  to  give 
evidence  of  any  circumstances  to  excuse  the  want  of  notice.    Here  the  defen- 
dant does  not  seek  to  avail  himself  of  circumstances  dchors  the  bill.    He  being 
drawer  of  the  bill,  by  the  law  of  merchants,  was  entitled  to  notice  of  dis- 


454  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

Where  the  bill  is  drawn  for  the  accommodation  of  an  indor- 
ser,  so  that  he  has  no  remedy  over  against  any  one,  and  it  so 
appears  on  the  pleadings,  it  seems  that  no  notice  to  him  is 
required;  but  it  is  otherwise  where  he  also  indorses  for  the 
accommodation  of  a  prior  party,  against  whom  he  is  entitled 
to  recourse,  i 

The  death  of  the  drawee  may  render  a  presentment  for 
acceptance  fruitless  and  unnecessary,  but  does  not  dispense 
with  the  necessity  of  giving  timely  notice  of  the  dishonor  of 
the  bill.  2  Neither  does  the  death  of  the  drawer  or  indorser 
discharge  the  holder  from  his  duty  to  give  the  usual  notice; 
but  the  notice  must  be  sent  to  the  representatives,  if  the 
holder  know  or  can  ascertain  who  they  are  and  their  address.  3 
If  the  holder  does  not  know  of  the  drawer  or  indorser's  death, 
the  notice  should  be  given  in  the  usual  way;  4  and  though  he 
knows  of  the  indorser's  death,  he  may  give  the  notice  in  the 
usual  manner  in  case  he  does  not  know  who  are  the  legal  rep- 
resentatives of  the  deceased.  5  And  where  there  are  joint 
indorsers,  not  partners,  one  of  whom  is  dead,  it  is  incumbent 
upon  the  holder  to  give  notice  to  the  representatives  of  the 
deceased;  and  if  he  fails  to  do  so,  it  seems  that  he  loses  his 
remedy  against  the  survivor,  on  the  ground  that  the  latter  is 
thereby  deprived  of  his  right  to  contribution  from  the  estate 

1 16  Mees  and  Welsby,  743. 

3  Chitty  on  Bills,  330;  Byles  on  Bills,  40,  41.  If  the  holder  is  not  bound  to 
take  an  acceptance  of  the  representative  to  pay  out  of  the  estate,  nor  his  per- 
sonal acceptance,  there  is  no  ground  for  saying  the  holder  is  bound  to  present 
for  acceptance. 

8  Cayuga  Co.  Bank  v.  Bennett,  5  Hill  R.,  236. 

*  Merchants  Bank  v.  Birch,  17  John.  R,,  25. 

6  Stewarts  v.  The  Executors  of  Eden,  2  Games'  R.,  121. 


honor."  The  bill  had  been  accepted.  The  above  decision  applies  with  still 
greater  force  in  the  case  of  an  indorser.  Carter  v.  Flower,  16  Mees.  and 
Welsby,  743.  There  must  be  notice  or  an  excuse  rendered  for  not  giving 
notice,  and  the  excuse  must  be  shewn  in  the  complaint.  Fitzgerald  v.  Wil- 
liams, 6  Bing.  N.  C.,  69.  Notice  means  something  more  than  knowledge  of 
the  dishonor.  Brugh  v.  Legge,  5  M.  and  W.,  418. 


NON-ACCEPTANCE   AND   PROCEEDINGS   OUT.  455 

of  his  co-indorser.  i  But  if  the  surviving  indorsee  enter  into 
an  arrangement  with  the  maker,  taking  security  from  him  for 
the  payment  of  the  note  or  bill,  this  will  operate  as  an  admis- 
sion by  him  that  the  proper  steps  have  been  taken  to  charge 
both  indorsers.  2  So  an  agreement  made  by  the  drawer  of 
bills  that  are  described  in  it  as  overdue,  is  an  admission  of 
due  notice.  3 

Neither  does  the  bankruptcy  or  known  insolvency  of  the 
drawee  or  maker  form  any  excuse  for  a  neglect  to  make  pre- 
sentment, or  to  give  notice;  because  many  means  may  remain 
of  obtaining  payment  by  the  assistance  of  friends  or  other- 
wise, of  which  it  is  reasonable  that  the  drawer  and  indorsers 
should  have  the  opportunity  of  availing  themselves.  4  There 
seems  to  be  a  stronger  reason  for  insisting  upon  a  demand  and 
notice,  where  the  promisor  or  principal  debtor  becomes 
insolvent  after  the  indorsement  or  transfer;  5  but  the  rule  is 
of  general  application  and  there  appears  to  be  no  disposition 
to  relax  it.  6 

Where  the  drawee  cannot  be  found,  or  has  absconded,  it  is 
sufficient  to  use  due  diligence  to  present  the  bill  for  accept- 
ance or  for  payment;  provided  the  holder  takes  care  to  com- 
municate the  requisite  notice  to  the  indorser.  7  For  though 

1  Willis  v.  Green,  5  Hill  R.,  213.  Joint  indorsers  stand  upon  the  same  foot- 
ing as  joint  makers  of  a  note,  who  are  not  partners.  Shepherd  T.  Uawley,  1 
Conn.  R.,  367. 

•  6  Hill  R.,  236;  Tebbetts  v.  Dowd.  23  Wend.,  379. 
'  Guuson  v.  Metz,  1  Barn,  and  Cress.,  193. 

4  Bayley  on  Bills,  ch.  7  §  1  j  Howe  T.  Bowes,  16  East,  112,  and  5  Taunt., 
30;  Chitty  on  Bills,  adds,  "  it  is  not  competent  to  the  holders  to  show  that  the 
delay  in  giving  notice  has  not  in  fact  been  prejudicial."  Esdaile  r.  Sowerby, 
11  East,  114;  but  see  17  Wend.,  94. 

•  Crossen  T.  Hutchinson,  9  Mass.  R.,  206. 

'  Sandford  T.  Dillaway,  10  Mass.  R..  52;  Farnam  T.  Fowle,  12  Man.,  89. 
It  is  no  excuse  for  want  of  presentment  and  demand,  that  the  promisors  had 
failed.  Granite  Bank  v.  Ayres,  16  Pick.  R.,  892.  Where  the  indorser  has 
taken  an  assignment  from  the  maker  of  all  his  property,  notice  is  not  necessary 
to  charge  him ;  certainly  not  if  the  assigned  property  be  sufficient  to  pay  the 
note,  so  that  the  payment  will  come  in  fact  from  the  primary  debtor.  2  Conn. 
R.,  126;  2  Bay,  217;  9  Mass..  408;  Barton  v.  Baker,  1  Serg.  and  Rawle,  834. 

1  Ogden  and  others  r.  Cowley,  2  John.  R.,  274.  The  notice  in  such  cases  is 
the  material  thing.  2  Caines,  127.  When  a  bill  is  payable  in  one  place,  and 


456  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

the  drawee  have  absconded  or  be  a  fictitious  person,  notice  of 
dishonor  must  be  given  to  the  prior  parties  just  the  same, 
unless  the  holder  chooses  to  take  upon  himself  the  burden  of 
proving  them  parties  to  the  fraud,  i 

The  case  is  different  where  the  drawer  or  indorser  has 
absconded  or  cannot  be  found :  here  it  is  enough  if  the  holder 
use  due  diligence  in  giving  the  required  notice.  2  What  is 
due  diligence  is  a  mixed  question  of  law  and  fact;  but  when 
the  facts  are  ascertained  it  is  purely  a  question  of  law,  3  and 
is  as  before  observed,  to  be  determined  according  to  the  law  of 
the  place  where  the  bill  was  drawn,  or  the  indorsement  was 
made.  4 

When  the  party  to  be  charged  resides  in  the  same  city  or 
town  where  the  demand  is  made  on  the  bill  presented,  notice 
must  be  personal,  or  left  at  his  dwelling  house  or  place  of 
business.  5 

In  this  state  the  rule  has  been  changed  by  a  recent  statute. 
"  Whenever  the  residence  or  place  of  business  of  the  indorser 
of  a  promissory  note,  or  of  the  drawer  or  iudorser  of  a  check, 
draft  or  bill  of  exchange,  shall  be  in  the  city  or  town,  or  when- 
ever the  city  or  town  indicated  under  the  indorsement  or 
signature  of  such  indorser  or  drawer,  as  his  or  her  place  of 
residence,  or  whenever  in  the  absence  of  such  indication,  the 
city  or  town  where  such  indorser  or  drawer,  from  the  best 
information  obtained  by  diligent  inquiry,  is  reputed  to  reside 
or  have  a  place  of  business,  shall  be  the  same  city  or  town 
where  such  promissory  note,  check,  draft  or  bill  of  exchange 
is  payable  or  legally  presented  for  payment  or  acceptance,  all 

1  Price  v.  Young,  1  McCord,  339;  4  Taunt.,  731. 

*  Carroll  v.  Upton,  2  Sand.,  171;  3  Comst.,  272. 

*  Taylor  v.  Bryden,  8  Johns.  R.,  173;  11  id.  187;  Bank  of  Utiea  v.  Bender, 
21  Wend.,  643;  Reemer  v.  Downer,  23  id.  620;  3  Hill,  520;  3  Comst.,  272. 

4 12  Wend.,  439. 

6  Ireland  v.  Kip,  10  John.  R.,  490;  Smedes  v.  Utica  Bank,  20  John.  R.,  372; 
4  Hill  R.,  129. 


addressed  to  and  accepted  by  the  drawers  in  another,  and  no  particular  place 
of  payment  is  specified,  the  holder  need  not  search  for  the  acceptors,  13  John. 
E.,  207. 


NON-ACCEPTANCE    AND    PROCEEDINGS    ON. 


451 


notices  of  non-payment  and  of  non-acceptance  of  such  promis- 
sory note,  check,  draft  or  bill  of  exchange  may  be  served 
by  depositing  them,  with  the  postage  thereon  prepaid,  in  the 
post  office  of  the  city  or  town  where  such  promissory  note, 
check,  draft  or  bill  of  exchange  was  payable  or  legally  pre- 
sented for  payment  or  acceptance,  directed  to  the  indorser  or 
drawer,  at  such  city  or  town."  i 

If  the  drawer  or  indorser  resides  in  a  different  place  notice 
must  be  forwarded  on  the  day  of  demand,  or  the  day  after, 
and  by  the  next  convenient  mail  using  ordinary  diligence, 
directed  to  and  advising  him  of  the  protest.  2  In  the  case  of 
a  temporary  removal,  notice  left  at  his  last  place  of  business 
will  be  sufficient^  or  if  both  his  house  and  place  of  business 
be  closed  during  his  absence,  it  is  enough  to  put  a  letter  in 
the  post  office  addressed  to  him  and  enclosing  the  notice.  4 

Where  the  residence  of  the  drawer  or  indorser  is  not  known, 
it  is  incumbent  upon  the  holder  to  use  diligence  to  ascertain 
it,  and  having  done  so,  by  inquiring  of  business  men  and  per- 
sons likely  to  know  the  residence  and  having  no  interest  in 
stating  it  erroneously,  he  is  authorized  to  act  upon  the  infor- 
mation so  acquired;  and  though  misled  as  to  the  fact,  notice 
sent  accordingly  will  be  good.  5  And  under  the  statutes  of 
this  as  well  as  some  of  the  other  states  of  the  union,  it  is  suffi- 
cient if  such  notice  be  directed  to  the  city  or  town  where  the 
person  sought  to  be  charged  resided  at  the  time  of  drawing, 
making  or  indorsing  the  note  or  bill;  unless  such  person,  at 
the  time  of  affixing  his  signature  to  the  instrument,  specifies 
thereon  the  post  office  to  which  the  notice  is  to  be  addressed.  6 

1  The  act  was  passed  April  17,  1857,  and  takes  effect  on  the  first  of  July 
Best,  but  does  not  apply  to  paper  bearing  date  prior  to  that  time. 

•  11  John.  R.,  281;  and  20  John.  R.,  872;  Howard  v.  Ives,  1  Hill  R.,  261. 
He  is  to  send  by  the  next  practicable  or  convenient  mail,  on  the  day  after  dis- 
honor; that  is  to  say  the  first  mail  after  the  commencement  of  business  hours. 

»2CainesR.,  121. 
4  2  John.  R.,  274. 

1  Seneca  County  Bank  v.  Ncass,  8  Corast.,  442;  2  Sand.,  176;  1  John.  R., 
294;  16  id.  218;  6  Wend.,  687;  21  Wend.,  648;  2  Hill,  687. 

•  2  R.  S.,  66,  3d  ed;  chap.  141  of  Session  Laws  of  1885;  see  also  the  note 
in  reference  to  the  statutes  of  other  states  p.  264  ante,  and  8  Conist .,  444.    In- 
dependent of  the  statute  it  is  sufficient  if  the  holder  use  reasonable  diligence. 

27 


458  BILLS    OF  EXCHANGE  AND  PROMISSORY  NOTES. 

So  that  the  holder  is  here  no  longer  bound  to  use  diligence  to 
ascertain  the  present  residence  of  the  drawer  or  indorser;  and 
it  is  enough  if  the  notice  be  sent  addressed  to  the  town  or  city 
in  which  he  resides,  i  or  to  the  post  office  in  an  adjoining  town 
where  he  is  in  the  habit  of  receiving  his  letters  and  papers, 
provided  he  has  not  specified  a  different  place.  2 

We  have  seen  that  delay  in  presenting  a  bill  may  be  excused 
by  illness  or  other  reasonable  cause  or  accident  not  attributable 
to  misconduct  in  the  holder;  3  and  Mr.  Chitty  says  expressly 
that  the  sudden  illness  or  death  of  the  holder  or  his  agent,  or 
other  accident,  may  constitute  an  excuse  for  the  want  of  regu- 
lar notice  to  any  of  the  parties,  in  case  it  be  given  as  soon  as 
possible  after  the  impediment  is  removed.  4  And  this  is 
clearly  in  harmony  with  the  general  principles  of  the  com- 
mercial law,  which  in  no  case  requires  the  performance  of  an 
act  that  has  been  rendered  impossible  through  no  fault  of  the 
holder.  5  The  breaking  out  of  a  war,  blocking  up  the  usual 
channels  of  communication ;  6  the  prevalence  of  a  malignant 
fever,  that  puts  a  stop  to  all  business;?  and,  in  general,  any 
such  inevitable  accident  as  prevents  the  giving  of  notice  and 

1  Downer  v.  Reiner,  21  Wend.,  10,  holds  that  independent  of  the  statute  it 
is  enough  to  send  notice  to  the  town  where  the  drawer  or  indorser  lives,  unless 
it  appear  that  the  holder  knew  that  the  notice  should  have  been  directed  in  a 
different  manner,  there  being  three  post  offices  in  the  town. 

*  Montgomery  Co.  Bank  v.  Marsh,  3  Selden  R.,  481^4  Barb.  R.,  324. 
1  7  Cowen  R.,  706,  714. 

*  Chitty  on  Bills,  330. 

*  3  Wend.,  488;  2  Smith,  222;  Hilton  v.  Shepherd.  6  East  R.,  16;  Tuno  v. 
Sague,  2  John.  Cas.,  1;  Anthon  N.  P.,  35;  1  McCord,  339. 

*  2  Smith,  222. 

1  2  John.  Cas.,  1. 


Burmester  v.  Barren,  9  Eng.  Law  and  Eq.  R.,  402.  This  was  an  action  against 
the  defendant  as  drawer  of  a  bill  of  exchange,  and  the  question  of  due  notice 
was  put  in  issue.  The  bill  was  drawn  in  London,  and  there  was  no  other 
address  of  the  drawer  stated  on  the  face  of  the  bill ;  and  the  plaintiff  having 
proved  the  sending  of  notice  of  the  dishonor  through  the  post  office  addressed 
to  the  defendant,  "  London,"  the  court  were  of  opinion  that  this  was  evidence 
of  due  diligence  and  prim  a  facie  sufficient,  though  the  defendant  proved  that 
he  lived  at  Chelsea,  and  did  not  receive  the  notice,  and  notwithstanding  his 
residence  might  have  been  ascertained  by  inquiring  of  the  acceptor,  "No.  27, 
Saville  Row,"  the  bill  being  addressed  to  him  in  that  manner. 


NON-ACCEPTANCE    AND    PROCEEDINGS   ON.  459 

is  not  traceable  to  the  neglect  of  the  holder,  will  excuse  delay 
90  long  as  the  preventing  cause  continues,  i 

When  it  is  said  that  the  notice  must  be  sent  as  early  as  the 
next  day  after  the  dishonor,  the  meaning  is  that  it  must  be 
forwarded  on  the  next  business  day.  If  the  protest  be  made 
on  Saturday,  notice  is  properly  sent  on  Monday  by  the  first 
mail  that  closes  after  the  commencement  of  the  ordinary 
hours  of  business.  2  So  if  the  protest  be  made  on  the  third 
day  of  July,  the  notice  will  be  sufficient  if  sent  on  the  fifth, 
leaving  the  intermediate  fourth  out  of  the  computation  as  a 
public  holiday :  for  the  same  reason  if  the  fourth  be  the  third 
day  of  grace,  the  demand  of  payment  must  be  made  on  the 
day  previous,  the  same  as  when  it  falls  on  Sunday.  3  So  if 
the  third  day  of  grace  fall  on  a  religious  festival,  or  solemn 
fast,  such  as  Christmas  or  Good  Friday  in  England,  or  Thanks- 
giving day  in  this  country,  the  bill  or  note  becomes  due  on 
the  day  preceding,  and  the  festival  or  day  of  rest  is  to  be 
counted  out  of  the  calendar  of  business.  4 

In  stating  the  rule  that  the  notice  is  to  be  transmitted  on 
the  day  after  the  protest  or  dishonor  of  the  bill  or  note,  it  is 
taken  for  granted  that  there  is  a  regular  mail,  so  that  the 
notice  may  be  sent  as  early  as  that.  In  respect  to  foreign 
bills,  it  frequently  happens  that  the  notice  cannot  be  sent  so 
promptly,  for  the  reason  that  there  is  no  mode  of  sending  it 
at  so  early  a  day;  and  consequently  the  rule  laid  down  in 
guch  cases  is  that  the  holder  must  use  reasonable  diligence.  5 

When  an  absolute  acceptance  is  refused,  and  the  drawee 
offers  a  conditional  or  qualified  acceptance,  the  holder  has  his 

1  8  Wend.,  488;  6  East,  16. 

*  Howard  v.   Ives,  1  Hill  R.,  263;  Ilaynes  v.  Birks,  8  Bos.  and  Pull.,  699| 
Wright  v.  Shawcross,  2  Barn,  and  Aid.,  501,  note;  Rowe  v.  Tipper,  20  Eng. 
Law  and  Eq.  R..  220. 

»  Ransom  v.  Mack.  2  Uill  R.,  687;  Cuyler  v.  Stevens,  4  Wend.,  666;  Lewfr 
¥.  Burr,  2  Caines  Gas.  in  Err  ,  196. 

41  Lord  Raym.,  748;  2  Caines  R.,  843;  6  Wheat.,  102;  4  Wend.,  666;  8 
Pick.  R.,  8.  What  are  to  be  considered  holidays  depends  in  most  of  the  states, 
AS  in  England,  upon  statutory  enactments;  though  several  of  them  have  been 
recognized  as  such  at  common  law. 

•  Bank  of  U.  States  v.  Caracal,  2  Peters  B.,  649;  Story  on  Bills,  §  298;  8 
Pick.  R.,  1. 


460  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

option,  either  to  Lave  the  bill  protested  for  non-acceptance 
and  notice  thereof  given  to  the  drawer  and  iudorsers,  or  to 
tak  the  acceptance  offered  and  rely  upon  the  contract  of  the 
acceptor,  i  But  it  is  clear  that  the  party  acting  as  the  agent 
of  the  holder  in  presenting  the  bill,  cannot  safely  take  an 
acceptance  which  is  not  according  to  the  tenor  of  the  bill :  2 
his  safety  and  duty  require  him  to  obtain  an  acceptance 
according  to  the  tenor  of  the  bill,  or  to  treat  it  as  dishonored 
and  give  notice  of  non-acceptance  to  the  drawer  and  indor- 
sers.  Failing  in  this,  the  latter  are  discharged,  and  the  agent 
is  responsible  for  the  damages  resulting  to  the  holder.  3 

'Bayley  on  Bills,  ch.  6,.  §1;  Chitty  on  Bills,  331.  "If  the  drawee  has 
offered  a  conditional  or  partial  acceptance,  or  an  acceptance  at  an  extended 
period,  or  if  any  other  person  than  the  drawer  offer  an  absolute  acceptance, 
although  the  holder  may  be  willing  to  receive  such  offer,  he  must,  if  he  intend 
to  resort  ultimately  to  the  drawer  and  indorsers,  give  each  of  them  notice  of 
auch  offer,  and  this  before  he  accepts  the  same;  and  in  such  case  if  the  holder 
will  have  the  power  of  availing  himself  of  it,  he  should  state  in  his  notice  the 
terms  of  the  acceptance  offered;  for  a  notice  generally  of  non-acceptance 
would,  if  made  with  full  knowledge  of  the  facts,  shew  that  he  did  not  acquiesce 
in  the  offer  and  deprive  him  of  the  benefit  of  it.  But  it  is  said  that  a  neglect 
to  give  notice  where  a  conditional  acceptance  has  been  taken,  is  done  away  by 
the  completion  of  those  conditions  before  the  bill  becomes  payable;  and  a 
neglect  where  there  is  an  acceptance  as  to  part,  and  a  refusal  as  to  the  residue, 
only  discharges  the  persons  entitled  to  notice  as  to  the  residue."  Sproat  v. 
Mathews,  1  Term  R.,  182.  In  another  place  Mr.  Chitty  says,  it  should  seem 
that  the  holder  ought  to  communicate  the  drawee's  offer  to  all  the  parties,  and 
obtain  their  consent  before  he  agrees  to  take  a  conditional  or  varying  accep- 
tance, or  he  may  discharge  them  from  liability.  Id.  300.  Mr.  Bayley  states 
the  law  in  substantially  the  same  terms,  and  then  adds:  "  A  neglect  to  give 
notice,  upon  the  refusal  of  any  thing  more  than  a  conditional  acceptance,  is 
done  away  by  the  completion  of  these  conditions  before  the  bill  becomes  pay- 
able; and  a  neglect,  upon  the  refusal  of  any  thing  more  than  a  partial  accep- 
tance, discharges  the  persons  entitled  to  it  only  from  their  responsibility  as  to 
the  payment  of  the  residue."  Bayley  on  Bills,  ch.  7,  §  2.  Mr.  Story,  after 
stating  law  in  substance  as  laid  down  by  Messrs.  Chitty  and  Bayley,  adds: 
"  It  should  seem  that  notice  would  not  of  itself  be  sufficient,  without  a  protest 
of  the  bill  for  non-acceptance  according  to  the  tenor  of  the  bill ;  nor  unless, 
after  notice,  such  parties  adopted  or  acquiesced  in  the  conditional  acceptance; 
for  it  may  materially  change  the  whole  relations  to,  and  responsibilities  on  the 
bill ;  and  each  of  them  has  a  right  to  say,  non  in  haec  foedera  veni.  Story  on 
Bills,  §  240. 

1  Walker  v.  The  Bank  of  the  State  of  New-York,  13  Barb.  R.,  636. 

*13  Barb.  R.,  636;  9  Wend.,  46;  6  Metcalf,  13;  11  Wend.,  573;  12  Conn. 
R.,  303;  22  Wend.,  215;  Commercial  Bank  v.  Union  Bank,  1  Kernan,  203. 


NON-ACCEPTANCE   AND    PROCEEDINGS   OJ».  461 

A  foreign  bill  dishonored,  should  be  protested,  and  infor- 
mation of  the  protest  sent  with  the  notice,  i  The  protest  is  a 
formal  and  solemn  declaration  in  writing  made  by  a  notary, 
giving  a  copy  of  the  bill  or  refering  to  the  original  as  annexed 
thereto,  and  stating  that  payment  or  acceptance  has  been 
demanded  and  refused,  the  reason  given  for  the  refusal  if  any, 
and  the  purpose  and  object  of  the  protest.  The  same  form  is 
in  general  use  in  this  country  and  in  England;  and  is  itself 
the  best  explanation  of  the  act  that  can  be  made. 2  Ordina- 
rily the  bill  is  presented  for  acceptance  in  the  first  instance 
by  the  holder,  or  by  his  agent;  and  if  refused,  it  is  then  taken 
to  a  notary  who  is  to  present  it  again  to  the  drawee  for  accept- 
ance; and  if  he  then  refuse,  the  officer  is  thereupon  to  make 
a  minute  upon  the  bill  itself,  consisting  of  his  initials,  the 
month,  the  day  and  year,  and  the  reason,  if  any  be  assigned, 
for  non-acceptance,  together  with  his  charge.  The  making  of 
this  minute  is  usually  called  noting  the  bill,  and  is  only  a  pre- 
liminary step — a  memorandum  for  the  use  of  the  notary  when 
he  comes  afterwards  to  draw  up  the  protest :  it  is  unknown  to 
the  law,  and  per  se  of  no  legal  effect.  3 

If  there  be  no  notary  public  at  the  place  where  the  bill  is 
dishonored,  it  may  be  protested  by  any  substantial  person  of 

1  Rogers  v.  Stephens,  2  Term  R.,  713;  Gale  v.  Walsh,  5  id.  239;  Brough  v. 
Perkins,  Lord  Raytn.,  993. 
'  Form  of  a  pi  otett  for  non-acceptance  : 

UXITED  STATES  OF  AMERICA,  > 
Mute  of  New-York,          j" 

On  the        day  of  ,  in  the  year  of  our  Lord,  one  thousand  eight 

hundred  and  ,  at  the  request  of  A.  B.    (bearer  or  holder,)  I,  J.  F.  J.,  a 

notary  public,  duly  admitted  and  sworn,  dwelling  in  the  city  of  Albany,  in  the 
state  aforesaid,  did  present  the  original  bill  of  exchange  hereunto  annexed,  to 
E.  F.,  the  drawee  therein  named,  for  acceptance,  who  refused  to  accept  tho 
tame.  •  Whereupon  I,  the  said  notary,  at  the  request  aforesaid,  did  protest, 
and  by  these  presents  do  publicly  and  solemnly  protest,  as  well  against  the 
drawer  (add,  and  indorsers,  if  necettary ,)  of  the  said  bill,  as  against  all  others 
whom  it  doth  or  may  concern,  for  exchange,  re-exchange,  and  all  cost, 
damages  and  interest,  already  accrued,  and  to  be  hereafter  incurred,  for  want 
of  acceptance  of  the  same.  Thus  done  and  protested  in  the  city  of  Albany, 
aforesaid.  In  tcstimonium  veritatis. 

(L   S.)  J-  F.  J.,  Notary  Public. 

'  F    ftly  v.  Mills,4  Term  R.,  170;  Rogers  v.  Stephens, 2 id.  713;  7  Ea-st,3o9» 
•  Tho  reason  assigned  for  refusal  should  be  inserted  when  a  rowou  it  given. 


462  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

the  place,  in  the  presence  of  two  or  more  witnesses;  provided 
only  it  is  done  according  to  the  law  or  usage  of  the  place 
where  it  is  made,  f 

In  relation  to  inland  bills,  an  early  English  statute  pre- 
scribes the  manner  in  which  they  may  be  protested  in  certain 
cases  for  non-payment,  "  by  a  notary  public,  and  in  default  of 
such  notary  public,  by  any  other  substantial  person  of  the 
city,  town  or  place,  in  the  presence  of  two  or  more  credible 
witnesses,  refusal  or  neglect  being  first  made,  of  due  payment 
of  the  same."  2  And  the  statute  of  Anne,  passed  shortly 
afterwards,  allows  a  protest  "  in  case  of  a  refusal  to  accept,  in 
writing,  any  inland  bill  amounting  to  the  sum  of  five  pounds, 
expressed  to  be  given  for  value  received,  and  payable  at  days, 
weeks  or  months  after  date,  in  the  same  manner  as  in  the  case 
of  foreign  bills  of  exchange,  and  for  which  protest  there  shall 
be  paid  two  shillings  and  no  more."  3  Prior  to  that  act,  inland 
bills  were  not  protestable  for  non-acceptance;  and  since  its 
passage,  though  the  holder  may  have  them  protested  if  he 
chooses,  he  is  not  bound  to  do  so,  and  is  not  subjected  to  any 
loss  of  either  principal  or  interest  by  the  omission.  4 

In  this  state,  "  Notaries  public  have  authority  to  demand 
acceptance  and  payment  of  foreign  bills  of  exchange,  and  to 
protest  the  same  for  non-acceptance  and  non-payment,  and  to 
exercise  such  other  powers  and  duties  as  by  the  law  of  nations, 
and  according  to  commercial  usage,  or  by  the  laws  of  any 
other  state,  government  or  country,  may  be  performed  by 
notaries  public."  5  "  They  may  also  demand  acceptance  of 

1  Baylcy  on  Bills,  ch.  7,  §  2;  Chitty  on  Bills,  333;  Story  on  Bills.  §  276. 

2  9  and  10  Wm.  3,'ch.  17,  enacted  in  1698.    This  act  applies  to  bills  which  on 
their  face  purport  to  have  been  given  for  value  received  and  are  payable  after 
date. 

*  3  and  4  Anne,  c.  9,  §  4. 

4  Burroughs  v.  Perkins,  Holt  121;  Harris  v.  Benson,  2  Stra  ,  910;  Lord 
Raym.,992;  3  Salk.,  69;  Windle  v.  Andrews,  2  Barn,  and  Aid.,  696.  To 
entitle  the  indorsee  of  an  inland  bill  of  exchange  to  recover  interest  from  the 
Drawer,  it  is  not  necessary  to  protest  the  same  for  non-payment.  And  not- 
withstanding the  terms  of  the  act  seem  to  imply  that  the  bill  must  be  accepted 
in  writing,  a  construction  was  given  to  it,  that  allowed  and  held  a  parol  accep- 
tance to  be  good.  Lumley  v.  Palmer,  2  Str.,  1000,  and  Windle  v.  Andrews,  2 
Barn,  and  Aid.,  696. 

6  2  R.  S.,  382,  §  50,  3d  ed. 


NON-ACCEPTANCE   AND    PROCEEDINGS    ON.  463 

inland  bills  of  exchange,  and  payment  thereof,  and  of  prom- 
issory notes,  and  may  protest  the  same  for  non-acceptance  or 
non-payment,  as  the  case  may  require.  But  neither  such  pro- 
test nor  any  note  thereof,  made  by  any  notary  in  this  state, 
shall  be  evidence  in  any  court  of  this  state,  of  any  facts 
therein  contained,  except  in  the  cases  specified  in  the  next 
section."  i 

A  notarial  certificate  of  protest  in  a  foreign  country  or  state, 
proves  itself,  and  is  sufficient  evidence  of  the  dishonor  of  a 
foreign  bill.  2  The  custom  of  merchants  requires  that  there 
should  be  a  protest  in  case  of  the  non-acceptance  of  a  foreign 
bill  of  exchange;  and  the  proper  officer  to  make  this  protest 
is  a  notary  public.  3  Drawn  up  in  the  usual  form,  the  certi- 

1  The  next  section  has  reference  to  the  mode  of  proving  protest  and  notice 
in  certain  cases,  and  is  in  these  words: 

"  §  52.  In  case  of  the  death  or  insanity  of  any  notary  public,  or  of  his 
absence  or  removal,  so  that  his  personal  attendance  or  his  testimony  cannot  be 
procured  in  any  mode  provided  by  law,  the  original  protest  of  such  notary, 
under  his  official  seal,  upon  such  seal  and  his  signature  being  duly  proved, 
shall  be  presumptive  evidence  of  the  fact,  of  any  demand  of  acceptance  or  of 
payment  therein  stated." 

"  §  53.  Any  note  or  memorandum  made  by  a  notary  public  in  his  own  hand 
writing,  or  signed  by  him,  at  the  foot  of  any  protest,  or  in  a  regular  register  of 
official  acts  kept  by  him,  shall  in  the  cases  specified  in  the  last  section,  be  pre- 
sumptive evidence  of  the  fact  of  any  notice  of  non-acceptance  or  non-payment 
having  been  sent  or  delivered,  at  the  time  and  in  the  manner  stated  in  such 
note  or  memorandum." 

§  54.  This  section  renders  notaries  public  responsible  civilly  and  criminal!/ 
for  any  misconduct. 

"  §  55.  In  all  actions  at  law,  the  certificate  of  a  notary,  under  his  hand 
and  seal  of  office,  of  the  presentment  by  him  ofcany  promissory  note  or  bill  of 
exchange  for  acceptance  or  payment,  and  of  any  protest  of  such  bill  or  note 
for  non-acceptance  or  non-payment,  and  of  the  service  of  notice  thereof  on 
any  or  all  of  the  parties  to  such  bill  of  exchange  or  promissory  note,  and  sped* 
fying  the  mode  of  giving  snch  notice,  and  the  reputed  place  of  residence  of  the 
party  to  whom  the  same  was  given,  and  the  post  office  nearest  thereto,  shall 
be  presumptive  evidence  of  the  facts  contained  in  such  certificate;  but  this 
section  shall  not  apply  to  any  case  in  which  the  defendant  shall  annex  to  his 
plea,  (answer)  an  affidavit  denying  the  fact  of  having  rm-ived  notice  of  non- 
acceptance  or  of  non-payment  of  such  note  or  bill."  Act  of  1833,  2  R.  S., 
882.  3.1  ed. 

'Nichols  v.  Webb,  8  Wheat. .333;  Townsley  T.  Sumrall,  2  Peters,  179; 
Lonsdale  v.  Brown,  id.  688;ABryden  v.  Taylor,  2  Harr.  and  Johns.,  899;  Chase 
v.  Taylor  4  id.  64. 

'Chanoine  v.  Fowler,  3  Wend.,  17?.  per  Marcy,  justice;  8  John.  R..  811. 


464  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

ficate  of  the  notary  should  be  authenticated  by  his  seal  of 
office :  so  executed,  it  is  received  in  all  courts,  without  any 
auxiliary  support,  as  evidence  of  the  protest  in  the  foreign 
state,  i  Whether  it  would  be  entitled  to  full  credit  without 
a  seal,  admits  of  question;  but  it  seems  that  if  executed  in 
the  manner  pointed  out  by  the  local  law,  it  will  be  sufficient.  2 

In  common  practice,  the  notary  not  only  protests  the  note 
or  bill  for  non-acceptance  or  non-payment,  as  the  case  may  be, 
but  also  sends  to  or  serves  upon  the  drawer  and  indorsers  due 
notice  thereof;  3  and  the  general  custom  is  that  the  notary 
includes  in  his  certificate  a  statement  showing  the  service  of 
notice  of  protest  on  the  parties  to  the  bill  or  note,  "  and  spe- 
cifying the  mode  of  giving  such  notice,  and  the  reputed  place 
of  residence  of  the  party  to  whom  the  same  was  given,  and 
the  post  office  nearest  thereto."  4  But  the  certificate  must  be 
made  so  as  to  conform  to  the  requirements  of  the  statute  as 
modified  by  the  act  of  1835  : 5  it  should  shew  service  of  the 
notice  in  the  manner  pointed  out  by  the  words  just  quoted, 
altered  so  as  to  follow  the  new  provision.  6  And  it  need  not 
specially  state  by  whom  the  notice  was  served  or  sent,  the  fact 
being  stated  in  positive  terms  that  it  was  served. 

The  statute  making  the  certificate  of  a  notary,  executed  in 
the  manner  prescribed,  presumptive  evidence  of  the  facts  con- 
tained in  it,  is  drawn  in  general  terms  that  seem  to  be  appli- 
cable to  all  notarial  certificates,  whether  made  by  notaries  of 
this  or  a  foreign  state.  The  late  Mr.  Justice  Co  wen,  however, 
in  one  case  declared  it  applicable  to  none  but  notaries  of  this 

1  Bank  of  Rochester  v.  Gray,  2  Hill  R.,  227.  and  authorities  there  cited. 

2  Idem;  4  Mart.  Louis.  R.,  283.    In  some  of  the  states  a  seal   is  clearly'not 
necessary.     Bank  of  Manchester  v.  Slason,  13  Verm.,  334;  Bank  of  Kentucky 
T.  Pursley,  3  Monroe,  238.    The  notarial  seal  is  prima  facie  evidence  of  the 
notary's  commission  to  act  in  that  capacity.     Browne  v.  Philadelphia  Bank,  6 
Serg.  and  R.,  484;  Steward  v.  Allison,  id.  324.  484. 

8  Halliday  v.  McDougall,  20  Wend.,  81;  Nichols  v.  Webb.  8  Wheat.,  326. 

4  The  words  quoted  are  those  of  the  statute  as  contained  in  section  fifty-five 
cited  above,  taken  from  the  act  of  1833;  19  Wend.,  383;  24  id.  230. 

6  2  R.  S.,  55,  3d  ed.  The  section  referred  to  provides  for  the  service  of 
notices  by  mail,  where  the  party  making  or  indorsing  does  not  specify  thereon 
the  post  office  to  which  the  notice  is  to  be  addressed. 

«  Ketchum  v.  Barber,  4  Hill  R.,  224;  7  id.  444. 


NON-ACCEPTANCE   AND    PROCEEDINGS   ON.  465 

state,  without  assigning  any  reason  for  that  construction,  i 
Mr.  Justice  Harris :  "  On  the  contrary,  it  seems  to  me  that  the 
legislature  intended  to  make  the  statute  applicable  to  all 
notarial  certificates.  I  find  nothing  in  the  language  or  object 
of  the  act,  which  requires  or  justifies  the  restriction  of  its 
operation  to  the  certificates  of  notaries  of  this  state."  2 

The  provisions  of  the  statute  making  notarial,  certificates 
presumptive  evidence  of  certain  facts,  has  no  application  where 
the  certificate  is  executed  by  a  notary  of  this  state,  shewing 

1  The  Bank  of  Rochester  v.  Gray,  2  Ilill  R.,  227. 

*  The  Bank  of  Vergennes  v.  Cameron,  7  Barb.  R..  148.  This  case  did  not 
turn  upon  the  point  in  question;  and  so,  of  course,  does  not  overrule  the  pre- 
vious decision.  The  act  referred  to  was  passed  in  1833.  and  stands  by  itself, 
though  printed  with  sections  of  the  Revised  Statutes  relating  to  notaricst  of 
this  state. 

A  bill  of  exchange  is  drawn  at  Rochester,  on  a  firm  in  Boston,  at  thirty  days 
from  date;  acceptance  is  declined,  the  bill  is  protested,  and  a  certificate  of 
protest  fur  non-acceptance  is  drawn  up  in  due  form  by  the  notary,  stating  the 
transmission  of  the  proper  notices  to  the  drawer  and  indorscrs.  Independent 
of  this  certificate  there  is  no  sufficient  proof  of  notice  to  the  defendant,  an 
indorser,  against  whom  the  action  is  brought.  These  facts  clearly  present  tho 
question,  whether  the  certificate  of  the  notary  making  the  protest  in  Massa- 
chusetts is  to  be  considered  presumptive  evidence  of  notice  to  the  indorser 
under  the  statute;  and  the  decision  of  the  court  in  the  Bank  of  Rochester  v. 
Gray  apparently  decides  that  it  is  not.  2  Hill,  227.  But  it  is  evident  the  case 
did  not  turn  upon  that  question;  for  it  is  stated  in  the  report  that  the  defen- 
dant had  annexed  to  his  plea  an  affidavit  denying  that  he  had  received  notice 
of  protest,  which  of  itself  takes  the  case  out  of  the  statute. 

In  Kirtland  v.  Wanzer,  2  Duer  Snp.  Court  R.,  278,  the  court  say  :  "  As 
to  our  own  statute,  it  has  no  application.  As  we  understand  its  provisions,  it 
is  only  to  protests  made  within  this  state,  and  by  our  own  notaries,  that  they 
can  be  applied."  The  action  there  was  upon  promissory  notes,  payable  in 
Kfw  Orleans,  which  in  respect  to  protest,  as  well  as  in  other  particulars,  stand 
on  the  footing  of  inland  bills.  '•  The  statute  of  Louisiana,  by  its  terms,  makes 
the  certificate  of  the  notary  legal  proof  of  the  facts  which  it  embraces,  only  in 
tin'  courts  of  that  state,  and  were  its  provisions  not  thus  limited,  so  far  from 
being  under  any  obligation  to  obey,  we  should  be  bound  to  disregard  them. 
There  are  many  cases  in  which  a  foreign  law  must  be  followed  as  a  rule  of 
decision  upon  the  rights  of  the  parties,  but  none  in  which  it  can  be  permitted 
to  control  and  supersede  our  own  rules  of  evidence.  Setting  aside  the  statute, 
then,  we  are  clearly  of  opinion  that  the  protests  and  certificates  of  the  notary 
at  New  Orleans  were  not  evidence,  either  at  common  law  or  under  our  own 
statute.  The  law  is  settled,  that  it  is  only  in  relation  to  foreign  bills  of  ex- 
chargc.  that  the  protest  of  a  foreign  notary  can  be  admitted  in  ovidcnco.  and 
the  notes  now  in  prosecution  are  certainly  not  bills  of  exchange." 


466  BILLS   OF    EXCHANGE  AND    PROMISSORY  NOTES. 

presentment  for  acceptance  or  for  payment,  made  beyond  the 
territorial  limits  of  the  state;  as  where  a  notary  commissioned 
and  residing  in  New-York,  presents  a  note  for  payment  in  the 
state  of  New  Jersey  and  protests  it  in  due  form,  and  gives  the 
usual  certificate  that  notice  has  been  given  to  the  indorsers.  i 
The  notary  can  act  officially  only  in  the  state  where  he  is 
appointed. 

A  certificate  of  the  notary  subjoined  to  the  usual  notarial 
certificate  and  disconnected  from  it,  stating  the  service  of 
notice  upon  the  drawer  and  indorser,  is  not  presumptive  evi- 
dence of  the  facts  so  stated;  2  it  is  not  drawn  in  the  manner 
required  by  the  statute.  3  But  if  the  notary  be  dead,  a  minute 
made  by  him  on  the  note  or  a  me'morandum  entered  by  him 
in  his  book,  is  admissible  evidence  of  protest  or  notice, 
according  to  its  tenor :  4  so  is  a  memorandum  made  by  the 
clerk  of  a  bank  in  the  usual  course  of  his  employment,  whether 
as  such  clerk  or  in  the  retainer  of  a  notary.  5 

The  notarial  certificate  of  protest  and  notice  does  not  satisfy 
the  statute,  unless  it  shews  a  presentment  and  protest  by  the 
notary  himself;  he  cannot  delegate  his  functions  to  another. 
The  language  of  the  act  is  explicit;  "  the  certificate  of  a  notary 
under  his  hand  and  seal  of  office,  of  the  presentment  ly  him 
of  any  promissory  note  or  bill  of  exchange  for  acceptance," 
obviously  requires  the  act  to  be  done  by  the  officer  himself, 
and  not  by  a  clerk  or  third  person.  6  And  hence  a  certificate 
of  protest  and  notice,  stating  that  the  notary  caused  the  note 

1  Dutchess  Co.  Bank  v.  Ibbotson,  5  Denio  R.,  110.  It  is  to  be  borne  in 
mind  that  bills  drawn  in  one  state  on  another  are  foreign  bills.  20  Wend.,  81, 
and  cases  there  cited. 

*  7  Barb.  R.,  144.    The  bank  of  Vergennes  v.  Cameron  was  the  case  of  a 
memorandum  at  the  foot  of  the  draft,  stating  the  service  of  notices,  and  signed 
by  the  notary  with  his  initials. 

3  Hunt  v.  Maybee,  3  SeldenR.,  266;  see  terms  of  the  section  referred  to, 
§55 

4  Halliday  v.  Martinet,  20  John.  R.,  168;  Hart  v.  Wilson,  2  Wend.,  513-  6 
id.  281;  Nichols  v.  Goldsmith,  7  Wend.,  160. 

*  Sheldon  v.  Benham,  4  Hill  R.,  129. 

8  The  Onondaga  Co.  Bank  v.  Bates,  3  Hill  R.,  53 ;  Vandewall  v.  Tyrrell,  Mood, 
and  Malk.,  87.  The  same  question  arose  in  Stewart  v.  Allison,  6  Serg.  and 
Rawle.  324 ;  1  Leigh,  179 ;  6  B.  Mouroe,  61 ;  4  How.  Miss.,567 ;  6  B.  Monroe,  626. 


NON-ACCEPTANCE   AND  PROCEEDINGS  ON.  467 

or  bill  to  be  presented,  is  of  no  validity.  Neither  is  his  cer- 
tificate of  service  of  notice  by  mail  of  any  force,  unless  the 
language  used  imports  that  the  notary  made  the  service  him- 
self, or  knew  that  it  was  made,  i 

It  is  to  be  observed  that  the  eighth  section  of  the  act  of 
1833,  which  forms  no  part  of  the  Revised  Statutes,  does  not 
apply  where  the  defendant  annexes  to  his  plea  "  an  affidavit 
denying  the  fact  of  having  received  notice  of  non-acceptance 
or  non-payment."  And  by  the  Revised  Statutes,  neither  the 
protest  of  a  promissory  note  or  bill  of  exchange  made  by  a 
notary  in  this  state,  nor  his  certificate,  was  evidence  in  any 
court  in  this  stater  except  in  cases  where  the  personal  attend- 
ance of  the  notary  on  the  trial,  or  his  testimony,  could  not  be 
procured  in  any  mode  provided  by  law.  And  in  such  cases, 
whether  happening  from  the  death,  insanity,  absence  or  removal 
of  the  notary,  the  original  protest  of  such  officer  under  his 
official  seal,  the  seal  and  his  signature  being  duly  proved,  is 
made  presumptive  evidence  of  the  demand  therein  stated  j  and 
any  note  or  memorandum  in  his  handwriting  or  signed  by  him, 
at  the  foot  of  the  protest  or  in  his  register  of  official  acts,  is 
in  the  cases  specified  presumptive  evidence  of  notice  of  non- 
acceptance  or  non-payment,  having  been  sent  or  delivered  at 
the  time  and  in  the  manner  so  stated.  And  hence  it  has  been 
held  that  where  the  notary  is  dead,  his  original  protest  and 
certificate  shewing  that  the  note  in  suit  had  been  dishonored 
and  notice  thereof  given  to  the  defendant,  are  presumptive 
evidence  of  the  facts  stated,  notwithstanding  the  defendant 
has  denied  by  affidavit  the  reception  of  the  notice.  2 

A  protest  for  non-acceptance  made  in  England  must  be 
proved  in  the  courts  of  that  country  by  the  notary  who  made 
it,  and  it  will  not,  as  in  the  case  of  a  protest  made  abroad, 
prove  itself:  so  held  where  a  notarial  protest,  under  seal  was 
offered  as  evidence  that  a  foreign  bill  of  exchange  had  been 

1 4  Hill  R.,  224;  7  id.  444. 

*  McKnight  v.  Lewis,  G  Barb.  R.,  081.  The  case  also  shews  that  the  admin- 
istrator of  the  intestate  notary  may  use  his  certificate  as  evidence  in  his  favor, 
provided  he  was  competent  to  make  the  protest  &.C.,  at  the  time  of  making  it. 


26S  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

presented  for  payment  in  England,  i  The  same  principle  of 
evidence  prevails  in  this  country,  except  where  it  is  modified 
by  statute.  2 

The  general  rule  in  this  country,  as  in  England,  is  that 
inland  bills  of  exchange  and  promissory  notes  need  not  be 
protested  for  non-acceptance  or  for  non-payment.  3  In  some 
of  the  states,  as  in  this,  the  protest  is  permitted  though  not 
required;  in  others,  the  act  is  a  mere  nullity,  and  the  notarial 
certificate  of  no  legal  or  binding  force.  4  The  common  law 

1Chcsmer  v.  Noyes,  4  Campb.,  129.  Lord  Ellenborough  :  "The  protest 
may  be  sufficient  to  prove  a  presentment  which  took  place  in  a  foreign  country; 
but  I  am  quite  clear  that  the  presentment  of  a  foreign  bill  in  England  must  be 
proved  in  the  same  manner  as  if  it  were  an  inland  bill  or  a  promissory  note." 

"  See  note  on  former  page  ia  reference  to  the  statutory  enactments  of  the 
different  states, 

1  5  John.  R.,  375;  2  Hill,  227;  3  Selden,  266;  2  Iredell  (North  Car..)  R., 
134. 

4  The  Union  Bank  v.  Hyde,  6  Wheaton  R.,  672.  The  protest  of  an  inland 
bill  or  promissory  note  is  not  necessary,  nor  is  it  evidence  of  the  facts  stated 
in  it.  On  foreign  bills  it  is  the  evidence  of  demand,  and  an  indispensable  step 
towards  the  legal  notice  of  non-payment,  in  consequence  of  which  the  under- 
taking of  the  drawer  or  indorser  becomes  absolute.  Young  v.  Bryan,  6  Wheat., 
140,  is  to  the  same  effect. 

Bank  of  U.  S.  v.  Leathers,  10  B.  Monroe  (Ken.,)  R.,  64.  This  case  holds 
the  same  doctrine.  "  The  protest  of  a  domestic  bill  is  not  required  by  law, 
nor  is  the  certificate  of  a  notary  of  such  protest  of  itself  evidence  of  dishonor." 
See  also  Murray  v.  Clayborn,  2  Bibb.  {Ken.,)  R.,  300.  The  early  cases  in 
Kentucky  hold  a  bill  drawn  in  one  state  on  another  an  inland  or  domestic  bill. 
Lawrence  v.  Ralston,  3  Bibb,  102. 

Promissory  notes,  though  made  in  one  state  and  payable  in  another,  need 
not  and  cannot  be  protested,  as  foreign  bills  may.  Kirtland  v.  Wanzer,  2 
Duer  N.  Y.  Sup.  Ct.  R.,  278;  Smith  v.  Ralston,  1  Morris  (Iowa,)  R.,  87. 

Turner  v.  Greenwood,  4  English  (Ark.,)  R.,  44.  Protest  of  an  inland  bill 
for  non-acceptance  or  non-payment  is  not  necessary — acceptance  being  refused, 
no  demand  of  payment  need  be  made. 

"VTillock  v.  Riddle,  5  Call  (Virginia,)  R.,  358,  decides  only  that  the  penalty 
for  not  giving  notice  of  the  dishonor  of  an  inland  bill  is  the  loss  of  interest  and 
damages,  and  does  not  decide  nor  imply  that  a  protest  is  necessary  for  that 
purpose. 

Hnbbarcl  v.  Troy,  2  Iredell  (Nor.  Car.,)  R..  134.  Protest  of  an  order  or 
inland  bill  of  exchange  is  not  necessary  to  enable  the  holder  to  recover  princi- 
pal and  interest.  Notice  in  due  time  of  non-acceptance  or  non-payment  is  all 
that  is  required  for  that  purpose. 

Taylor  v.  Bank  of  Illinois,  7  Monroe  (Ken.,)  R.,  576.  A  bill  of  exchange 
drawn  in  Illinois  by  a  resident  of  that  state  on  another  resident  is  inland,  and 


NON-ACCEPTANCE    AND    PROCEEDINGS   ON.  469 

being  the  basis  of  the  legislation  of  nearly  all  the  states,  the 
early  statutes  of  England,  in  respect  to  notes  and  inland  bills 
have  been  generally  adopted  with  but  slight  modifications; 
and  these  which  are  the  most  important  in  the  least  commer- 
cial states,  are  evidently  made  with  the  design  of  dispensing 
with  every  unnecessary  form.  Starting  then  with  this  propo- 
sition, that  the  protest  of  notes  and  inland  bills  is  unknown 
to  the  common  law,  it  is  plain  that  they  can  be  protested  only 
by  virtue  of  the  statute  laws  of  the  different  states,  i  So  that 
in  the  absence  of  a  statute  law  authorizing  it,  the  protest  is 
an  idle  ceremony.  2 

But  though  the  protest  be  not  necessary,  notice  of  non- 
acceptance  must  be  given  to  the  parties  to  be  charged,  stating 
in  express  terms,  or  by  reasonable  implication,  that  the  bill 

1  Byles  on  Bills.  204 ;  Chitty  on  Bills,  334.  Promissory  notes  are  generally 
placed  on  the  footing  of  inland  bills,  as  by  the  statute  of  Anne. 

*  Byles  on  Bills,  204.  '•  Foreign  bills  are  very  frequently  protested,  both  for 
non-acceptance  and  non-payment;  but  a  protest  is  hardJy  ever  made  for  non- 
acceptance  of  an  inland  bill,  though  it  is  sometimes  protested  for  non-pay- 
ment. It  is  conceived  that  a  protest  of  an  inland  bill  is  unknown  to  the  com- 
mon law,  and  must  therefore  derive  its  efficacy  from  the  above  enactments;  (9 
and  10  Win.  3,  c.  17,  and  3  and  4  Anne,  c.  9,)  from  which  it  will  follow  that  it 
is  applicable  only  to  such  instruments  as  are  therein  described  and  that  the 
steps  therein  required  must  be  taken.  As  the  statute  of  Anne  puts  promis- 
sory notes  on  the  so/ne  footing  as  bills,  it  should  seem  to  authorize  a  protest, 
and  such  protest  is  accordingly  sometimes  made,  (in  England)."  Kyd,  97; 
Chitty  on  Bills,  335  "  The  protest  for  non-acceptance  in  the  case  of  an  inland 
bill  is  by  no  means  necessary,  and  the  want  of  it  does  not  affect  the  holder1* 
right  to  the  principal  sum,  as  it  would  in  the  case  of  a  foreign  bill;  and  it  it 
in  practice  seldom  made.  An  inland  bill  is  in  general  only  noted  for  non- 
acceptance,  which  noting,  as  already  observed,  is  of  no  avail;  and  if  not  paid 
when  due  it  is  then  noted,  and  sometimes  though  not  very  often,  protested  for 
non-payment." 


the  protest  of  a  notary  is  not  necessary,  and  of  course  not  evidence  of  demand 
and  non-payment. 

In  Ohio,  the  holder  is  by  statute  relieved  from  the  necessity  of  procuring  » 
notarial  protest  of  bills  drawn  in  one  state  upon  the  resident  of  another,  except 
for  the  purpose  of  claiming  statute  damages.  Case  v.  Hcffner,  10  Ohio,  180; 
McMurchey  v.  Robinson,  id.  496. 

As  to  the  proper  manner  of  making  and  completing  the  act  of  protest,  see 
Bailey  v.  Dozier,  6  How.  U.  S.,  23. 


470  BILLS   OF    EXCHANGE  AND  PROMISSORY    NOTES. 

has  been  dishonored,  i  The  notice  must  describe  so  as  to 
identify  the  bill ;  2  must  be  so  drawn  as  to  shew  that  the  bill 
has  been  duly  presented  for  payment  or  acceptance,  and 
refused  or  dishonored;  3  must  be  given  in  due  time  after  the 
dishonor;  4  must  be  given  by  a  party  to  the  bill,  or  by  some 
one  duly  authorized  to  perform  the  act;  5  and  must  be  given 
according  to  the  law  of  the  place  where  the  bill  was  drawn 
or  the  indorsement  was  made.  6 

The  notice  need  not  be  in  writing,  7  and  no  particular  form 
of  words  is  necessary  to  be  used;  but  the  language  employed 
must  be  such  as  to  convey  notice  to  the  drawer  or  indorser 
that  the  bill  has  been  dishonored;  and  to  do  this  it  is  essential 
that  the  notice  should  describe  the  bill,  and  shew  either  in 
express  terms,  or  in  words  that  necessarily  convey  information 
to  the  party  notified,  that  acceptance  or  payment  has  been 
refused  on  due  presentment.  8  Notice  that  the  bill  has  been 
protested  for  non-acceptance  is  sufficient;  9  but  notice  that  a 
note  is  due  and  has  not  been  paid,  10  or  that  an  accepted  bill 
has  not  been  paid,  or  has  not  been  taken  up,  has  been  held 
insufficient,  n  The  rule  requires  positive  and  distinct  notice 
of  the  dishonor;  that  is  to  say,  notice  of  the  facts  shewing  or 
fairly  implying  that  the  drawee  has  refused  to  accept  or  pay 
the  bill  when  presented  for  that  purpose  at  the  right  time  and 
place,  or  other  acts  done  which  are  deemed  equivalent,  n 

The  description  of  the  note  or  bill  contained  in  the  notice 
should  of  course  be  carefully  and  accurately  drawn;  but  a 

I  Hedger  v.  Stevenson,  2  Mee.  and  Wels.,  799;  6  id.  402;  1  Comst.  R.,  413. 

*  Cayuga  Co.  Bank  v.  Warden,  1  Comst.,  413. 

*  Dole  v.  Gold.  5  Barb.  R.,  490. 

4  Jackson  v.  Richards,  2  Caines,  343;  Griffin  v.  Goff,  12  John.  R.,422;  Jen- 
nings v.  Roberts,  4  Ellis  and  Blackburn's  R  ,  615. 
•3  Wend.,  173;  5  Cowen,  303;  1  Hill,  263;  2  id.  451. 
•2  Sand.  ,171;  12  Wend.,  439. 
T  4  Wend.,  566. 
•1  Comst.  R..413. 

*  Idem,  and  Mills  v.  Bank  of  U.  S..  11  Wheat.,  431. 
10  5  Barb.  R.,  490. 

II  Hartley  v.  Case,  4  Barn,  and  Cress.,  339;  Strange  v.  Price,  10  Ad.  and 
Ellis,  125. 

"Gilbert  v.  Dennis,  3  Metealf  R.,  495;  Pinkham  v.  Macy,  9  id.  174. 


NON-ACCEPTANCE   AND    PROCEEDINGS    ON.  471 

misdescription  will  not  vitiate  it,  unless  the  variance  is  such 
that  under  the  circumstances  of  the  case  the  notice  conveys 
no  sufficient  knowledge  to  the  drawer  and  indorsers  of  the 
identity  of  the  particular  note  or  bill  which  has  been  dishon- 
ored. And  where  the  face  of  the  notice  itself  shews  an 
error  in  the  statement  of  the  amount,  it  may  be  shewn  in  aid 
or  explanation  of  the  defect  that  there  was  no  other  note  or 
bill  in  existence  to  which  the  description  contained  in  the 
notice  could  be  applied,  i  Nevertheless  it  is  incumbent  upon 

1  Cayuga  Countj  Bank  v.  Worden  &  Griswold,  1  Comstock's  R.,  413;  was 
an  actiun  against  the  defendants  as  indorsers  of  a  promissory  note.  The  note 
was  in  the  plaintiff's  bank  at  maturity,  and  protested  for  non-payment:  it  was 
given  for  six  hundred  dollars,  payable  to  the  order  of  the  defendants  at  the 
bank,  and  the  following  notice  was  addressed  to  the  defendants  severally: 

$600.  Cayuga  County  Bank,  jluburn,  May  3,  1845. 

Sir — Take  notice  that  S.  Wordeu's  note  for  three  hundred  dollars,  payable  at 
this  bank,  indorsed  by  you,  was  this  evening  protested  for  non-payment,  and 
the  ho'ders  look  to  you  for  the  payment  thereof.  P.  B.  Eaton,  Notary  Public. 

And  it  was  proved  on  the  trial,  subject  to  objection,  that  tin?  note  in  suit  was 
given  in  renewal  of  one  of  the  same  description,  and  that  this  was  the  only  note 
in  the  bank  made  by  S.  Worden,  and  indorsed  by  the  defendants.  The  Circuit 
Judge  held  that  the  notice  was  insufficient,  a  verdict  was  rendered  for  the  de- 
fendants, and  the  Supreme  Court  of  the  seventh  district  gave  judgment  accord- 
ingly. And  the  Court  of  Appeals  reversed  the  judgment.  The  head  notes  of 
the  reporter,  Judge  Comstock,  are  iu  these  words: 

'•  Due  presentment  for  payment  and  notice  of  non-payment  are  conditions 
precedent  to  the  liability  of  an  indorser  of  a  promissory  note. 

No  precise  form  of  words  are  necessary  iu  giving  notice.  It  is  sufficient  if 
the  language  used  is  such  as  to  convey,  either  in  ex  press  terms  or  by  necessary 
implication,  notice  to  the  indorser  of  the  identity  of  the  note,  and  that  pay- 
ment, on  due  presentment,  has  been  neglected  or  refused  by  the  maker. 

Where  a  notice  misdescribes  the  note  in  some  particular,  it  may  be  shewn  in 
aid  of  the  defect  that  there  was  no  other  note  in  existence  to  which  the  descrip- 
tion contained  in  the  notice  could  be  applied. 

A  notice  of  protest  need  not  in  terms  state  that  a  demand  has  been  made 
upon  the  maker.  It  is  sufficient  if  it  state  that  the  note  has  been  protested 
for  non-payment." 

In  Platt  v.  Drake.  1  Douglass  R.,  296,  the  supreme  court  of  Michigan  holds 
that  a  notice  stating  that  a  promissory  note  has  been  protested  for  non-pay- 
ment, is  not  sufficient  to  charge  an  indorser.  "  Such  a  protest  was  unneces- 
sary, and  was  no  evidence  of  the  facts  necessary  to  charge  the  indorser.  A 
notice  by  a  notary,  that  at  the  request  of  the  holder,  he  had  made  such  protest, 
was  not  a  notice  that  payment  of  the  note  had  been  demanded  and  refused, 
or  that  the  note  had  been  dishonored.  It  only  asserted  that  the  notary  bad 
declared  it  dishonored  in  the  form  of  a  protest — an  instrument  intended  for 


472  BILLS   OF  EXCHANGE  AND    PROMISSORY   NOTES. 

the  holder  to  shew  affirmatively  that  the  drawer  or  indorser 
has  been  duly  notified  of  the  dishonor  of  the  bill  in  question; 
and  the  rule  demands  that  he  should  state  the  requisite  facts 
in  his  notice,  in  such  a  manner  as  not  to  mislead  the  party 
notified,  i  But  it  has  been  held  in  England  that  if  there  be 
more  than  one  bill  to  which  the  notice  may  apply,  it  rests 
with  the  defendant  to  shew  that  fact.  2 

The  sufficiency  of  the  notice,  when  there  is  no  dispute 
about  the  facts,  is  a  question  of  law  to  be  determined  by  the 
court.  3  But  where  a  notice  sufficient  on  its  face  misdescribes 
the  note  or  bill,  the  question  whether  the  party  notified  could 
under  the  circumstances  of  the  case  be  misled  by  the  defect, 
is  one  of  fact  and  law.  4  And  where  there  is  a  question  of 
fact  involved  in  the  issue  presented  for  trial,  the  jury  are  to 
pass  upon  it  as  in  other  cases.  5 

1  Shelton  v.  Braithwaite,  7  Mees.  and  Wels.,  436;  Messenger  v.  Southey,  1 
Man.  and  Gr.,  76  j  1  Scott  N.  R.,  180;  Stockman  v.  Parr,  11  Mees.  and  Wels., 
809. 

a  7  M.  and  W.,  436.  The  subject  will  be  more  fully  considered  in  a  subse- 
quent chapter. 

3  Van  Hoesen  v.  Van  Alstyne,  3  Wend.,  75 ;  5  Barb.,  490;  Remer  v.  Downer. 
21  Wend.,  10;  23  id.  620;  25  id.  277;  2  Hill,  587;  3  id.  520. 

4  McKnight  v.  Lewis,  5  Barb.  R.,  681;  1  Comst.,  413;  11  Eng.  Law  and  Eq. 
R.,  599. 

6  Shelton  v.  Braithwaite,  7  Mees.  and  Welsby,  436;  decided  in  1841.  The 
notice  in  this  case  was  in  these  words  :  "  Dear  sir  :  To  my  surprise,  I  have 
received  an  intimation  from  the  Birmingham  and  Midland  Counties'  Bank  that 
your  draft  on  A.  B.  is  dishonored,  and  I  have  requested  them  to  proceed  on 
the  same."  Held  that  if  there  was  more  than  one  bill  to  which  the  letter 
could  apply,  it  lay  upon  the  defendant  to  prove  that  fact,  in  order  to  shew  its 
uncertainty.  Held  also  that  the  letter  was  a  good  notice  of  dishonor. 

''  The  word  dishonor  is  a  technical  word  which  intimates  that  the  bill  has 
been  presented  and  refused  payment."  Parke,  B. 

Stockman  v.  Parr,  11  Mees.  and  Welsby,  809,  decided  in  1843.  The  notice 
described  a  bill  of  exchange  as  a  note.  Parke,  B.:  "I  entertain  the  same 
opinion  which  I  expressed  at  the  trial,  that,  in  the  absence  of  proof  of  the 
existence  of  any  other  bill,  the  notice  of  dishonor  was  sufficient.  In  this 


evidence  of  the  facts  alleged  in  it,  but  in   this  case  totally  inadmissible  as 
evidence,  and  unavailable  to  charge  the  indorser." 

In  Mellersh  v.  Ripper,  11  Eng.  Law  and  Eq.  R.,  599,  the  notice  described 
the  bill  as  drawn  by  the  acceptor  and  accepted  by  the  drawer,  and  was  held 
sufficient. 


NON-ACCEPTANCE   AND   PROCEEDINGS   ON.  473 

The  notice  itself  is  to  be  construed  by  the  court,  like  any 
other  instrument  in  writing;  whiie  the  accessory  facts  or  sur- 
rounding circumstances  which  are  admissible  in  evidence,  are 
properly  matters  for  the  jury  to  pass  upon.  Accordingly, 
where  the  notice  describes  a  note  and  states  that  it  has  been 
u  this  day  presented  to  the  maker  for  payment  and  payment 
refused,"  without  giving  any  date,  and  no  other  evidence  is 
introduced,  the  question  is  one  of  law  to  be  determined  by  the 
court;  the  notice  is  held  insufficient,  i  So,  if  the  notice  state 
a  demand  of  payment  a  day  too  soon  or  a  day  too  late,  it  is  as 
a  matter  of  law  defective.  2 

The  holder  of  a  bill  of  exchange  has  a  right  of  recourse  to 
each  of  the  prior  parties  who  has  been  charged  with  due 
notice  of  its  dishonor,  and  is  at  liberty  to  notify  them  all  him- 
self, so  as  to  avoid  the  hazard  of  some  of  the  parties  being 
discharged,  by  the  omission  of  such  notice.  And  this  is  the 
prudent  and  customary  course  pursued  in  such  cases.  But  if 
the  holder  is  satisfied  with  the  responsibility  of  his  immediate 
indorser,  there  is  no  necessity  for  his  giving  notice  to  any 
previous  party;  and  if  such  notice  be  given  by  the  other 
parties  to  the  bill,  the  holder  may  recover  thereon  against  any 
of  them.  3  In  other  words,  if  the  drawer  or  indorser  of  a  bill 
of  exchange  receive  due  notice  of  its  dishonor  from  any 
person  who  is  a  party  to  it,  he  is  directly  liable  upon  it  to  any 
subsequent  indorser,  although  he  may  have  received  no  notice 

1  Wynn  v.  Alden,  4  Demo,  1G3. 

'  Ranson  v.  Mack,  2  Hill  H.,  587,  and  cases  there  cited. 

•  Mead  v.  Engs,  6  Cowen  R.,  808. 


notice  there  is  only  one  misdescription,  the  calling  the  instrument  a  note  instead 
of  a  bill.  It  gives  the  true  date  of  the  instrument;  and  the  sum  demanilod  is 
not  stated  to  bo  the  amount  of  the  bill;  the  63/  Gs  tid  is  made  up  of  thenmoun< 
due  on  the  bill,  and  the  notarial  charges,  which  appeared  on  the  notarial 
ticket.  There  was  sufficient  evidence  of  identity  to  go  to  the  jury." 

Sec  a!so  Toboy  v.  Lcnnig,  14  Penna.  St.  R..  48;]  j  Kilgorc  v.  Bulkley,  14 
Conn.,  362;  Crocker  v.  Getchell,  10  Shcpl.,  892, 

28 


474  BILLS   OF  EXCHANGE   AND   PROMISSORY  NOTES. 

of  its  dishonor  from  him.  i  So  that  if  the  holder  gives  notice 
to  all  the  parties  liable  to  him  on  the  instrument,  it  enures  to 
the  benefit  of  each  indorser  who  stands  behind  him.  2  But 
the  indorser  receiving  notice,  cannot  complain  of  the  holder 
for  omitting  also  to  give  notice  to  the  prior  parties  liable  on 
the  bill;  for  it  is  the  business  of  each  iudorser  to  take  care 
that  the  parties  responsible  to  him  are  duly  notified.  His 
contract  is  to  pay  the  bill,  on  condition  that  the  bill  is  dis- 
honored and  due  notice  given  to  him  of  the  fact.  3 

When  the  notice  is  sent  by  the  holder  to  the  last  indorser, 
and  by  him  to  his  indorser,  and  so  on  until  the  drawer  is 
notified,  each  of  the  parties  has  the  same  time  and  is  bound  to 
exercise  the  same  diligence  in  serving  or  forwarding  the  notice, 
as  the  law  gives  to  and  requires  of  the  holder.  4  And  it  has 
been  determined  that  where  a  bill  or  note  has  been  transmitted 
by  the  holder  to  an  agent  for  collection,  and  it  is  presented  by 
the  agent  and  dishonored,  if  the  protest  or  other  evidence  of 
dishonor  is  transmitted  by  the  agent  to  his  principal,  and  by 
him  seasonably  sent  to  the  indorser,  it  is  sufficient,  although 
the  indorser  does  not  in  fact  receive  it  so  soon,  as  if  it  had 
been  transmitted  directly  by  the  agent  to  the  indorser.  5  The 
holder  of  a  bill  in  New- York  sent  it  to  a  bank  at  Providence 
for  collection,  whence  it  was  sent  to  another  bank  at  Bristol, 
(R.  I.),  where  the  acceptor  resided.  The  notary  there,  after 
making  demand  and  protest,  returned  the  bill  to  the  cashier 
of  the  Bristol  bank,  who  sent  it  by  the  next  mail  to  the  cashier 
of  the  Providence  bank,  and  the  latter  sent  it  by  the  next 
mail  to  his  immediate  indorser  in  New- York.  The  objection 
was  taken,  that  the  notary  should  have  given  notice  of  non- 
payment directly  to  all  the  prior  parties;  but  the  court  held 
it  to  have  been  given  according  to  established  commercial 

1  Jameson  v.  Swinton,  2  Campb.,  273;  Colt  v.  Noble,  5  Mass.,  167;  Bank  of 
Utica  v.  Smith,  18  John.  R.,  231. 
a  Stafford  v.  Yates,  18  John.  R.,  327. 

*  5  Cowen  R.,  303. 

*  Bray  v.  Hadwen,  5  Maule  and  Selw.,  68 ;  Williams  v.  Smith,  2  Barn,  and 
Aid.,  496;  Eagle  Bank  v.  Chapin,  3  Pick.,  180. 

*  Howard  v.  Ives,  1  Bill  R.,  268,  and  cases  there  cited. 


NON-ACCEPTANCE   AND    PROCEEDINGS   ON.  475 

usage,  i  The  agent  to  whom  the  bill  is  indorsed  for  collection, 
is  a  holder  for  the  purpose  of  giving  and  receiving  notice  of 
dishonor;  and  it  is  perfectly  immaterial  through  how  many 
hands  the  notice  may  have  to  pass,  so  only  it  be  transmitted 
with  reasonable  diligence  by  each  of  the  successive  parties.  2 

When  a  bill  or  promissory  note  is  delivered  to  a  bank  for 
collection,  it  being  the  established  custom  for  the  bank  in  such 
cases  to  cause  notice  of  dishonor  to  be  given  to  all  the  indor- 
sers,  there  is  an  implied  contract  on  the  part  of  the  bank  to 
give  notice  in  the  manner  required  by  the  usage  and  custom 
of  the  business.  3  Or  a  suit  may  be  maintained  in  the  nature 
of  an  action  on  the  case,  against  the  bank,  for  neglect  to  give 
notice  to  the  indorsers,  according  to  the  usual  course  and 
practice  of  banks.  And  where  a  note  or  bill  is  delivered  by 
the  holder  to  his  creditor  as  collateral  security  for  a  debt  due, 
and  the  latter  deposits  it  for  collection,  it  has  been  adjudged 
that  the  general  owner,  or  person  beneficially  interested  in 
having  the  duty  performed  or  notice  given,  may  recover  any 
damages  sustained  by  him  in  consequence  of  the  neglect.  4 

The  collecting  bank  is  responsible  for  the  neglect  of  its 
agents;  and  though  it  hands  the  paper  over  to  a  notary  public, 
or  sends  it  to  another  agent  to  be  by  him  presented  for  accept- 
ance or  payment  and  protested  in  case  of  dishonor,  the  liability 
of  the  bank  covers  whatever  is  necessary  to  be  done  for  the 
purpose  of  charging  the  parties  to  the  bill  or  note.  5  And  in 
this  state  it  is  settled  that  the  bank  receiving  a  bill  or  note  for 
collection  is  answerable  for  the  neglect  of  a  notary  public  and 

1  5  Cowen,  803;  2  Hill,  457,  per  Ch.  J.  Nelson. 

1  The  Bank  of  the  U.  States  v.  Davis,  2  Hill  R.,  451.  Each  party  has  a  day 
in  which  to  give  the  notice;  but  if  one  of  the  indorsers  neglects  to  give  notice 
to  his  indorser,  the  holder  cannot  take  his  place  and  give  the  notices,  after  the 
time  has  elapsed  for  him  to  give  notice,  and  recover  thereon.  The  holder  can 
recover  on  his  own  notice  only  when  it  has  been  given  promptly  and  in  the 
usual  time.  Rowe  v.  Tipper,  20  Eng.  Law  and  Eq.  R.,  220;  Harrison  T. 
Ruscoe,  15  Mee.  and  W.,  231. 

*  Smedcs  v.  Utica  Bank,  20  John.  R.,  872;  S.  C.,  3  Cowen  R.,  662.  Thit 
case  turned  on  the  question  of  con  it  deration,  in  the  court  of  errors. 

4  McKinster  v.  Bank  of  Utica,  9  Wend..  40;  S.  C..  11  Wend  ,  473. 

•Allen  v.  Merchants'  Bank  of  N.  Y,,  15  Wend.  R.,  482;  S.  C.,  22  id.  215. 


476  BILLS  OF   EXCHANGE   AND  PROMISSORY  NOTES. 

a  foreign  agent,  as  well  as  for  the  default  of  its  own  immediate 
servants,  i  But  the  rule  is  not  the  same  in  all  the  states;  in 
some  of  them  the  bank  is  not  liable  for  the  neglect  or  miscon- 
duct of  a  notary  public;  2  and  in  others,  it  is  not  responsible 
for  the  default  of  a  foreign  age  at.  3 

There  being  no  special  agreement  entered  into  between  the 
parties  and  no  local  usage  or  general  custom  shewn,  the  bank 
to  which  a  note  or  bill  is  indorsed  for  collection,  is  bound  to 
present  the  same  for  acceptance  or  for  payment,  and  if  the 
same  is  not  accepted,  or  is  not  paid  at  maturity,  to  give  due 
notice  of  the  dishonor  to  the  last  indorser,  and  he  to  the  next, 
and  so  on.  4  The  deposit  for  collection  creates  an  agency,  and 
the  duties  of  the  agent  are  regulated  and  to  be  ascertained  in 
the  same  manner  as  in  the  case  of  any  other  agency.  If  there 
be  a  special  contract,  the  parties  are  to  be  guided  by  it;  and 
'if  it  be  the  custom  of  business  that  the  bank  receiving  the 
note  for  collection  is  to  take  the  necessary  steps  to  charge  all 
the  indorsers  or  parties  to  the  instrument,  the  contract  between 
the  holder  and  the  agent  is  presumed  to  have  been  made  with 
reference  to  the  custom.  5  In  this  way  the  cases  are  recon- 
cilable on  the  same  general  principle.  6 

Notice  of  non-acceptance  from  a  mere  stranger  is  not  suffi- 
cient; and  where  a  foreign  bill  purports  to  have  been  protested 

1  22  Wend.,  215;  Downer  v.  The  Madison  Co.  Bank,  6  Hill,  648. 

'  Bellemire  v.  Bank  of  U.  States,  4  Whart.,  105;  Tiernan  v.  Commercial 
Bank,  7  How.  Miss.,  648;  Bank  of  Mobile  v.  Huggins.  3  Ala.,  206;  Agricul- 
tural Bank  v.  Commercial  Bank,  7  S.  and  M.,  592;  1  La.  Ann.  R.,  13. 

1  Phipps  v.  Millbury  Bank,  8  Met..  79.  This  case  assumes  that  a  bank  re- 
ceiving from  another  bank  a  note  for  collection,  discharges  its  duty  in  the 
premises  by  demanding  payment  and  giving  notice  to  the  bank  from  which  the 
note  was  received.  East  Uaddam  Baukv.  Scovill,  12  Conn.  R.,  303;  3  Rich., 
366. 

4  8  Metcalf  R.,  79;  so  held  where  a  bank  received  from  another  bank  a  note 
for  collection,  indorsed  by  the  cashier  of  the  latter,  and  enclosed  notices  for 
the  several  indorsers  to  the  cashier  by  whom  the  same  was  so  indorsed.  Eagle 
Bank  v.  Chapin,  3  Pick.,  180:  5  Mass  ,  167;  Haynes  v  Birks,  3  Bos.  and 
Pall.,  599;  Bank  of  U.  States  v.  Goddard,  5  Mason,  366. 

•  20  John.  R.,  372;  3  Cowen,  6(53;  8  Met.,  79;  23  Pick..  330;  3  Ala.,  206; 
Thompson  v.  Bank  of  the  State,  3  Hill  S.  C.,  77;  Riley,  81;  6  Blackf.  R., 
225. 

*  Bank  of  Orleans  v.  Smith,  3  Hill  R.,  560,  Commercial  Bank  of  Penn.  T. 
Union  Bank  of  New-York,  1  Reman  R.,  203,  and  cases  there  cited. 


NON-ACCEPTANCE   AND   PROCEEDINGS   ON.  477 

abroad  by  an  officer  unknown  to  the  custom  of  merchants,  it 
is  necessary  to  shew  that  the  protest  was  made  in  the  manner 
pointed  out  by  the  law  of  the  country  where  it  was  made;  so 
held  where  a  bill  was  protested  for  non-acceptance  at  Havre, 
by  a  huissier  audiencer  of  the  tribunal  of  commerce  at  that 
place,  pursuant  to  the  commercial  code  of  France,  i 

Though  the  notice  of  dishonor  must  in  general  come  from 
the  holder  or  his  agent,  or  from  a  party  to  the  bill,  it  will  be 
good  if  given  by  an  indorsee  who  has  transfered  it  as  collateral 
security  for  an  existing  debt;  for  such  a  person  has  a  direct 
interest  in  the  bill,  and  a  right  of  recourse  to  the  parties 
liable  thereon,  when  the  instrument  comes  back  into  his 
hands.  2 

Where  a  bill  is  drawn  by  one  of  several  partners  on  the 
firm,  in  relation  to  the  partnership  business,  3  or  where  the 
drawers  and  acceptors  are  the  same  persons,  no  notice  of 
protest  need  be  given;  for  in  each  of  these  cases  the  party  to 
be  charged  has  notice  of  the  dishonor  of  the  bill  so  drawn  in 
the  very  act  of  dishonoring  them.  4  The  case  is  the  same  in 
principle,  where  one  agent  of  a  corporation  draws  a  bill  on 
another  agent  of  the  same  corporate  body,  and  therefore  no 
notice  need  be  given  of  its  dishonor.  5 

After  a  bill  of  exchange  has  been  dishonored  for  non-accep- 
tance, it  is  not  necessary  to  present  the  same  for  payment.  6 
This  is  clear  from  the  nature  of  the  contract  entered  into  by 
the  drawer  and  indorsers,  as  well  as  from  the  authorities;  for 
the  engagement  of  these  parties  is  that  the  bill  shall  be 
accepted  when  duly  presented  for  that  purpose,  and  as 
soon  as  it  is  broken  the  holder  acquires  a  righjt  of  action 

1  Chanoinc  v.  Fowler,  3  Wend.,  173.  The  written  laws  of  a  foreign  state 
must  be  proved  here  by  an  exemplification,  and  cannot  be  proved  by  the 
printed  statute  book  of  such  state.  2  Wend.,  411.  The  protest  in  Chanoina 
v.  Fowler,  was  made  in  one  of  the  ways  directed  by  art.  173  and  174,  of  th« 
Code  of  Commerce,  but  the  code  was  not  properly  proved. 

*  Cowperthwaite  v.  Sheffield,  1  Sand.,  416. 

*  Gowan  v.  Jackson.  20  John..  176;  1  Campb..  82. 

4  The  Bank  of  Rochester  v.  Monteath,  1  Denio,  402. 

•  Hasey  v.  White  Pigeon  Beet  Sugar  Co,,  1  Doug.  (Mich..)  R.,  193. 

•  2  Hill  R.,  227;  16  East,  106.  Ester  Bank  v.  Gordon,  8  N.  Uamp.,  66. 


478  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

thereon,  on  complying  with  the  conditions  of  the  contract. 
One  of  these  conditions  is  that  the  bill  be  duly  presented  for 
acceptance,  and  the  other  is  that  notice  of  the  drawee's  refusal 
to  accept  be  given  to  the  drawer  and  indorsers.  By  omitting 
either  of  these  acts,  the  holder  looses  his  right  of  recourse  to 
these  parties  who  are  thereby  discharged,  i 

But  the  laches  of  the  holder  may  be  waived,  by  a  subse- 
quent promise  to  pay  the  bill  made  by  the  drawer  or  indorser 
with  knowledge  that  he  has  been  discharged  by  the  neglect  of 
the  holder.  2  For  instance,  if  the  drawer  or  indorser  pay  a 
part  of  the  note  or  bill,  or  promise  to  pay  it,  knowing  that  it 
has  not  been  duly  presented  for  acceptance  or  payment,  or 
that  timely  notice  of  the  dishonor  has  not  been  given,  this  is 
a  waiver  of  the  laches. 

1 1  Comst.,  321;  19  John.  R.,  391;  14  id.  114;  1  Comst.,  413. 
*  Tebbetts  v.  Dowd,  23  Wend.  R.,  379.    The  subject  will  be  more  fully  con- 
sidered in  a  subsequent  chapter. 


CHAPTER  IX. 
PRESENTMENT  FOR  PAYMENT,  AND  PAYMENT. 

Demand,  when  necessary.  As  against  the  maker  of  a  pro- 
missory note,  or  the  acceptor  of  a  bill  of  exchange,  it  is  not 
necessary  for  the  holder  to  aver  or  prove  a  demand  of  pay- 
ment :  a  suit  is  a  sufficient  demand,  as  in  other  cases  of  a 
precedent  debt  or  duty,  i  The  drawee  by  accepting  the  bill, 
becomes  the  principal  debtor,  and  thenceforth  stands  in  the 
same  relation  to  the  holder  as  does  the  maker  of  a  note.  2 

When  the  instrument  is  drawn  payable  generally,  that  is  to 
say,  without  specifying  any  place  of  payment,  the  contract  is 
clearly  not  the  same  thing  as  an  undertaking  to  pay  in  a  par- 
ticular place;  for  in  many  cases  the  place  of  payment  enters 
into  the  very  essence  of  the  agreement  between  the  parties. 
A  promise  to  pay  a  given  sum  of  money  in  the  city  of  New- 
York,  imposes  upon  the  promisor  a  different  obligation  from 
a  promise  to  pay  the  same  sum  in  London  or  in  Calcutta. 
On  this  ground  it  was  decided  in  England,  after  thorough  and 
elaborate  discussion,  that  an  acceptance  payable  at  a  particu- 
lar banking  house  in  London,  the  bill  being  drawn  on  another 
place,  is  a  special  engagement;  so  as  to  render  it  incumbent 
upon  the  holder  of  the  bill,  in  an  action  thereon  against  the 
acceptor,  to  aver  and  prove  a  demand  of  payment  at  the  place 
named.  3  Of  course  the  substance  of  the  contract  is  the 

1  Foden  v.  Sharpe,  4  John.  R.,  188;  Wolcott  v.  Van  Santvoord,  17  John. 
R.,  248;  Caldwell  v.  Cassidy,  8  Cowen  R  ,  271;  Haxlon  v.  Bishop.  3  Wend  , 
13;  Green  v.  Goings,  7  Barb.  R.,662;  Bank  of  the  U.S.  v.  Smith,  11  Wheat., 
171 ;  Fenton  v.  Gondry,  13  East  ,  469. 

»4  John.  R  ,183;  17  id.  248. 

*  Rove  v.  Toung,  2  Bligh  R.,  891 ;  2  Brod.  and  B.,  166.  The  act  of  1  and  2 
Goo.  4,  c.  78,  passed  in  1821,  makes  all  bills  accepted  payable  at  a  particular 
place  or  house,  payable  the  same  as  if  accepted  generally;  unless  the  accep- 
tance makes  the  bill  payable  at  that  "  place  only,  and  not  otherwise  or  else- 
where." Rowe  v.  Young,  was  decided  the  year  before  the  passage  of  the 
statute.  Turner  v.  Haydeu,  4  Barn,  and  Ore*.,  1. 


480  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

same,  no  matter  where  it  is  made;  and  the  promisor  may 
discharge  his  stipulation  at  the  place  where  he  engaged  to 
pay.  But  in  this  country  the  rule  of  pleading  and  evidence 
does  not  require  the  holder  to  take  any  notice  of  the  place  of 
payment;  though  the  right  of  the  promisor  to  fulfill  his 
engagement  at  the  place  appointed  is  conceded  in  all  the  cases, 
both  here  and  in  England,  i 

In  this  state,  as  we  have  already  seen,  the  holder  of  a  bill 
of  exchange  need  not  shew  a  demand  of  payment  of  the 
acceptor,  any  more  than  of  the  maker  of  a  note.  It  is  the 
business  of  the  acceptor  to  shew,  that  he  was  ready,  at  the 
day  and  place  appointed,  but  that  no  one  came  to  receive  the 
money,  and  that  he  was  always  ready  afterwards  to  pay.  2 
The  rule  was  the  same  in  Westminster  Hall  at  the  time  of  its 
adoption  here.  In  an  action  against  the  acceptor  of  an  inland 
bill  of  exchange  payable  at  the  bank  of  Utica,  where  the 
question  came  up  on  a  demurer  to  a  declaration,  on  the  ground 
that  it  contained  no  allegation  of  a  presentment  at  the  bank 
named  for  payment,  Chief  Justice  Spencer  after  reviewing  the 
authorities  on  the  subject,  concludes  "  that  the  time  and  place 
of  payment  are  merely  modal,  forming  no  essential  part  of  the 
contract;  that  it  is  incumbent  on  the  defendant,  whether  the 
payee  was  at  the  place  at  the  time  appointed  or  not,  to  shew 
in  his  defence  that  he  was  there  ready  and  willing  to  pay,  and 
that  the  payee  did  not  come;  that  the  consequences  of  the 
absence  of  the  payee,  under  such  circumstances,  unless  he 
makes  a  subsequent  special  demand  and  there  be  then  a  refu- 
sal, are  merely  that  he  must  be  content  with  receiving  the 
sum  originally  payable;  and  if  he  sue  without  having  made  a 
special  demand,  he  looses  all  claim  to  damages  and  costs,  and 
will  himself  be  subject  to  them.  This  I  consider  not  only 
entirely  equitable  and  just,  as  between  the  parties,  but  the 
old  and  settled  law  of  the  land."  3  The  doctrine  so  laid  down 

1  Smith  v.  Thatcher,  4  Barn,  and  Aid.,  200,  and  American  cases  cited  above. 

•  4  John.  R.,  184. 

*  Walcott  v.  Van  Santvoord,  17  John.  R.,  248.    Mr.  Justice  Van  Ness  dis- 
sented from  the   opinion  pronounced  in  this  case,  holding  a  demand   of  the 
maker  and  acceptor  necessary  in  order  to  charge  them.    See  cases  cited  by  him, 


PRESENTMENT     FOR    PAYMENT.  481 

has  been  generally  followed  in  this  country,  i  and  applies  with 
equal  force  where  the  action  is  against  the  maker  of  a  promis- 
sory note  payable  at  a  particular  place.  •->  If  the  place  of 
payment  be  material  to  the  promisor,  it  is  for  him  to  take  the 
necessary  steps  to  secure  the  advantage  resulting  from  the 
stipulation  in  that  respect.  In  other  words,  a  demand  at  the 
place  named  is  not  a  condition  precedent,  and  need  not  be 
avered  by  the  payee  or  holder  of  a  note;  at  the  same  time  the 
maker  is  at  liberty  to  plead  his  readiness  to  pay  at  the  time 
and  place  appointed  in  bar  of  damages,  though  not  in  bar  of 
the  action.  3 

Bank  bills,  which  are  promissory  notes  in  form  and  sub- 
stance, were  for  a  time  spoken  of  in  the  courts  of  this  state 
as  forming  an  exception  to  the  general  rule;  though  no  deci- 
sion to  that  effect  was  formally  made.  4  At  length  the  question 
came  up  for  adjudication,  and  the  court  in  passing  upon  it, 
say :  "  bank  notes  are  promissory  notes,  and  actions  founded 
upon  them  are  governed  by  the  same  rules.  The  corporation 
being  a  person  in  law,  has  the  same  rights,  and  is  subject  to 
the  same  liabilities  as  an  individual,  unless  the  act  of  incorpo- 
ration varies  these  rights  and  liabilities.  5  In  relation  to 
promissory  notes,  it  is  well  settled  that  in  an  action  on  a  note 
payable  on  demand,  generally  no  demand  need  be  proved; 

•Green  T.  Goings,  7  Barb.  R.,  652;  1  Peters  R.,  604;  11  Wheat.,  171;  3 
Richardson  R.,  311. 

•  Caldwell  v.  Cassidy,  8  Cowen  R.,  271. 

'  Ruggles  T.  Patten,  8  Mass.  R.,  480;  Fenton  T.  Gondry,  13  East.  473; 
Turner  v.  Hayden,  4  Barn,  and  Cress..  1.  Where  the  holder  of  a  bill  of  ex- 
change, accepted  payable  at  a  bankers,  but  not  made  payable  "  there  only," 
did  nut  present  it  fur  payment,  and  tlie  banker  about  three  weeks  afterward* 
failed,  having  had  in  his  hands  all  that  time  a  balance  in  favor  of  the  acceptor 
exceeding  the  amount  of  the  bill.  Held  that  the  latter  was  not  discharged  by 
the  omission  to  present  the  bill  for  payment,  the  acceptance  being  in  law* 
general  acceptance;  decided  in  1825.  In  Fayle  v.  Bird,  6  Barn,  and  Cress, 
631.  which  was  an  action  on  a  bill  of  exchange  drawn  by  plaintiff  on  and 
accepted  by  the  defendant  payable  at  a  particular  place;  and  held  that  it  was 
a  general  acceptance  under  the  statute,  and  that  it  was  not  necessary  to  prove 
presentment  at  that  place.  See  stat.  1  and  2  Geu.  4.  c.  78;  decided  in  1827. 

4  The  Bank  of  Niagara  T.  McCrocker.  18  John.  R.,  403;  The  Jefferson  Cow 
Bank  v.  Chapman,  19  id.  322;  8  Cowen  R  ,  1:71. 

•  The  Bank  of  Utica  v.  Magher,  18  John.  R.,  341. 


482  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

the  commencement  of  a  suit  is  a  demand.  So  also  in  an  action 
on  a  note  payable  at  a  particular  place,  on  a  particular  day,  it 
is  not  necessary  to  aver  or  prove  a  demand  at  the  time  and 
place;  but  the  readiness  of  the  defendant  is  matter  of  defence. 
It  seems  to  follow  that  in  an  action  on  a  note  (bank  bill)  pay- 
able on  demand  at  a  particular  place,  no  demand  need  be 
avered  or  shewn;  but  if  the  defendant  pleads  that  when  the 
demand  was  made,  that  is,  when  the  suit  was  commenced,  he 
was  ready  at  the  place  mentioned  in  the  note  to  make  pay- 
ment, and  brings  the  money  into  court,  he  discharges  himself 
from  interest  and  costs."  i 

The  case  is  different  where  an  action  is  brought  by  the 
holder  on  the  half  of  a  bank  note  that  has  been  severed  for 
safe  transmission  by  mail  from  one  place  to  another;  for  here 
the  owner  of  the  bill  has  no  right  of  action  upon  the  instru- 
ment itself,  2  and  is  not  entitled  to  recover  the  face  of  the 
note  until  he  has  shewn  himself  the  owner,  and  accounted  for 
the  lost  or  absent  half.  3  And  if  he  neglects  to  do  this  before 
bringing  his  action,  it  has  been  held  that  he  cannot  recover 
either  interest  or  costs  of  suit.  4 

When  property  is  given  in  pledge  or  as  collateral  security 
for  the  payment  of  a  promissory  note,  a  demand  of  payment 
must  be  made  before  the  pledgee  can  proceed  to  sell  the  secu 
rity  deposited  with  him.  And  the  rule  is  the  same,  although 
the  debt  is  payable  presently  and  without  demand,  and  not- 
withstanding, by  the  terms  of  the  pledge,  the  creditor  may 
sell  at  public  or  private  sale,  without  giving  notice  to  the 
debtor.  5  The  object  here  is  to  give  the  owner  an  opportunity 
to  redeem  the  pledge.  6 

1  Haxtun  v.  Bishop,  3  Wend.,  13;  15  Mass.,  447. 

•  Hinsdale  v.  The  Bank  of  Orange,  6  Wend.,  378. 

3  6  Bank  of  Virginia  v.  Ward,  6  Munf.;  166;  Farmers'  Bank  v.  Reynolds,  4 
Rand.,  186. 

4  4  Rand.,  186.    In  Kentucky  it  is  necessary  to  shew  on  the  trial  a  present- 
ment of  notes  made  payable  at  a  bank,  for  payment,  but  it  is  not  necessary  to 
aver  a  demand  in  the  complaint.    Bank  of  K.  v.  Hickey,  4  Litt.,  225. 

•  Wilson  v.  Little,  2  Comst.  R.,  443. 

•  Edwards  on  Bailm.,  250. 


PRESENTMENT     FOR   PAYMENT.  483 

Although  a  presentment  for  payment  is  not  necessary  for 
the  purpose  of  perfecting  or  completing  the  liability  of  the 
acceptor  of  a  bill  or  of  the  maker  of  a  note,  it  is  a  condition 
precedent  to  the  liability  of  the  drawer  and  indorser.  i  The 
holder  is  required  to  perform  two  distinct  acts  in  order  to 
charge  these  parties,  or  what  is  the  same  thing,  in  order  to 
convert  the  conditional  contract  made  by  them  into  an  abso- 
lute undertaking.  And  hence  a  waiver  of  notice  of  non-pay- 
ment by  an  indorser  does  not,  according  to  the  law  merchant, 
dispense  with  the  demand  itself.  2  But  a  waiver  of  protest, 
where  the  term  is  evidently  used  in  its  popular  acceptation,  is 
a  waiver  of  both  demand  and  notice.  3 

In  one  of  the  earlier  cases  the  duty  of  the  holder  in  pre- 
senting for  payment  is  stated  by  Lord  Mansfield  in  these 
words :  "  We  are  all  of  opinion  that  in  actions  upon  inland 
bills  of  exchange,  by  an  indorsee  against  an  indorser,  the 
plaintiff  must  prove  a  demand  of  or  due  diligence  to  get  the 
money  from  the  drawee  (or  acceptor,)  but  need  not  prove  any 
demand  of  the  drawer :  and  that  in  actions  upon  promissory 
notes,  by  an  indorsee  against  the  indorser,  the  plaintiff  must 
prove  a  demand  of  or  due  diligence  to  get  the  money  from 
the  maker  of  the  note."  4  The  same  rule  applies  with  equal 
force  to  foreign  as  well  as  inland  bills;  5  and  includes  within 
itself  an  exception  in  favor  of  those  cases  in  which  the  holder 
is  unable  to  make  a  demand,  with  the  exercise  of  due  dili- 
gence. 6 

Mr.  Justice  Kent  states  the  rule  with  the  same  qualification : 
"  I  have  always  understood  the  law  to  be  well  settled  that  the 

1  Cuyler  v.  Stevens,  4  Wend.,  666;  Cayuga  Co.  Bank  v.  Warden,  1  Comst. 
B.,  413.  Notice  of  non-payment  to  the  drawer  or  indorser  is  also  a  condition 
precedent. 

*  Berkshire  Bank  v.  Jones,  6  Mass.  R.,  624;  Backus  v.  Shepherd,  11  Wend., 

629. 

*  Coddington  v.  Davis,  1  Comst.  R..  186. 

4  Heylyn  v.  Adamson,  2  Burr.,  669.  This  case  shews  that  from  inaccuracy 
in  the  previous  reports,  it  had  been  inferred  that  a  demand  of  payment  WM 
also  necessary  to  be  made  upon  the  drawer. 

•  Bromley  v.  Frazier,  1  Strange,  141. 

•  2  Burr.,  669. 


484  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

drawer  of  a  bill  is  only  responsible  after  a  default  on  the  part 
of  the  acceptor;  and  that  the  holder  must  first  demand  payment 
or  use  diligence  to  demand  it  of  the  acceptor,  before  he  can 
resort  to  the  drawer."  i  And  the  indorser,  being  a  new 
drawer,  is  responsible  on  the  same  terms,  whether  his  in- 
dorsement was  made  before  or  after  the  bill  became  due.  2 
When  the  holder  of  a  note  that  is  over  due,  transfers  it  by 
indorsement,  it  is  to  be  considered  as  a  note  payable  on  de- 
mand, and  the  demand  and  notice  must  be  made  within  a 
reasonable  time.  3 

Where  the  maker  of  a  note  or  the  acceptor  of  a  bill  has 
absconded,  or  cannot  be  found  with  the  use  of  due  diligence, 
a  personal  demand  is  out  of  the  question;  and  in  such  cases 
the  former  practice  was  to  aver  presentment  and  notice  as  if 
the  same  had  been  made  and  given  in  the  ordinary  manner; 
and  it  was  held  that  evidence  of  due  diligence  in  the  holder 
to  obtain  payment,  without  an  actual  demand,  would  support 
the  averment,  and  be  received  as  equivalent  to  an  actual  pre- 
sentation of  it  to  the  maker  or  acceptor.  4  But  it  has  been 
suggested  with  great  propriety  that  the  averment  should  cor- 
respond with  the  fact — a  suggestion  that  has  the  force  of  law 
in  those  states  where  it  is  appropriate  or  necessary  that  the 
pleadings  should  be  verified.  5 

The  fact  that  the  maker  of  a  note  has  absconded,  does  not 
at  all  affect  the  contract  of  the  indorser  :  it  operates  only 

'Munroe  v.  Easton.  2  John.  Gas.,  75. 

a  Berry  v.  Robinson.  9  John.  R.,  121.  "  The  plaintiff  was  properly  non- 
suited, for  not  proving  demand  of  payment  of  the  maker,  and  notice  of  his 
default  to  thi-  indorser.  Though  the  note  was  indorsed  long  after  it  was  due( 
yet  the  indorsee  took  it  subject  to  this  condition.  The  indorsement,  in  every 
case,  where  a  drawer  really  exists,  is  a  conditional  contract  to  pay  in  the  event 
of  a  demand,  or  due  diligence  to  make  a  demand  on  the  maker,  and  his  default. 
It  was  equivalent  in  this  case  to  an  order  on  the  drawer  to  pay  the  amount." 

3  Van  Hoesen  v.  Van  Alstyne,  3  Wend.,  75.     This  case  seems  to  assume 
that  the  holder  of  such  a  note  is  not  bound  as  in  other  cases  to  give  immediate 
notice  of  dishonor.     See  1  Cowen,  387;  3  id.  252;  3  Comst.,  494. 

4  Stewart  v.  Eden,  2  Caines,  127;  Williams  v.  Matthews,  3  Cowen,  262; 
Saunderson  v.  Judge.  1  H.  Bl.,  510;  Ogden  v.  Conley,  2  John.  R.,  274;  Gist 
v.  Sybraud,  3  Ohio,  307;  Putnam  v.  Sullivan,  4  Mass.,  45;  C  id.  449;  3  Met., 
495;  4  Serg.  and  R.,  480;  4  Leigh,  114. 

6  Blakely  v.  Grant,  6  Mass.,  386;  see  chap.  5,  Code  of  Procedure. 


PRESENTMENT     FOR   PAYMENT.  -1 V, 

upon  the  question  of  diligence,  in  respect  to  the  proper  steps 
to  be  taken  by  the  holder  in  order  to  charge  him.  Thus, 
where  the  objection  was  made  by  the  defendants,  who  were 
sued  as  indorsers,  that  no  demand  had  been  made  on  the 
promisor  when  the  note  became  payable,  Chief  Justice  Par- 
sons pronouncing  the  opinion  of  the  court,  says  :  "  As  to  this 
objection,  the  facts  are,  that  on  the  first  day  of  grace,  which 
was  the  last  day  of  February,  notice  was  left  at  the  lodgings 
of  the  promisor,  that  the  note  would  be  due  on  the  lust  day 
of  grace,  with  a  request  to  pay  it  then;  but  it  also  appears 
that  before  that  time  it  was  known  to  the  parties  that  lie  had 
absconded,  and,  when  the  note  was  payable  he  was  not  to  be 
found.  The  condition  on  which  an  indorser  of  a  note  is 
holden,  is,  that  the  indorsee  shall  present  the  note  to  the 
promisor  when  due,  and  demand  payment  of  it,  if  it  can  be 
done  by  using  due  diligence.  Now,  it  appears  that  when  the 
note  in  this  case  was  due,  it  could  not  be  presented  to  the 
promisor  for  payment,  and  that  there  was  no  neglect  in  the 
indorsees.  We  are  all,  therefore,  satisfied  that  the  indorsers 
are  holden  on  the  indorsement  in  this  case,  notwithstanding 
there  was  no  demand  on  the  promisor."  i  So,  where  the 
maker  has  removed  from  the  state  or  gone  out  of  the  country, 
after  having  made  the  note,  the  holder  is  excused  from 
demanding  payment  of  him  personally.  2  The  diligence 
demanded  by  the  law  does  not  require  the  holder  to  hunt  up 
an  absconding  debtor,  or  to  follow  one  who  removes  from  the 
state  or  country,  in  order  to  present  his  note  for  payment.  3 
But  where  there  has  been  no  removal  after  the  making  of  the 
note,  the  holder  must  present  it  for  payment  to  the  maker 
personally  or  at  his  residence  or  place  of  business,  no  matter 
whether  that  be  in  the  state  where  the  note  was  made  or  in  a 
•foreign  country.  » 

The  exceptions  to  the  general  rule  requiring  demand  and 
notice  have  been  mentioned  in  a  former  chapter.  >     \Vhcn  the 

1  Putnam  v.  Sullivan,  4  Mass..  58;  Lefflngwell  v.  While,  1  John.  Cas  ,  93. 

*  Widgcry  v.  Munroc,  <*>  Mass..  4i9;  A  • .  Drake,  14  John.  K.,  111. 
1  Gulpin  v.  Hard,  3  McCurd.  .94;  14  John.  R.,  114. 

«GiImore  v.  Spies,  1  Barb.  R..  158;  S.  C..  1  Comst.  R.,  Sil. 

*  Sec  former  chap.  3, "  of  forms,  requisites,  &c." 


486  BILLS    OF  EXCHANGE  AND    PROMISSORY    NOTES. 

maker  has  absconded;!  when  the  maker  is  a  seaman  on  a 
voyage,  having  no  domicil  in  the  state; 2  when  he  has  no 
known  residence  or  place  of  business  at  which  the  note  can  be 
presented  for  payment;  3  and  when  he  makes  the  note  here 
and  removes  from  the  state,  and  takes  up  a  permanent  resi- 
dence elsewhere,  before  it  becomes  payable,  the  holder  is  not 
bound  to  follow  and  search  him  out,  for  the  purpose  of  making 
the  usual  demand  of  payment.  4  It  would  be  unreasonable 
to  compel  the  holder  to  find  an  absconding  debtor,  at  the 
peril  of  losing  his  recourse  to  the  indorsers;  or  to  follow  a 
sailor  on  his  voyage,  or  to  seek  out  a  person  who  has  no  fixed 
residence  or  place  of  business;  or  to  follow  a  person  who  resides 
and  makes  a  note  here,  into  another  state  or  foreign  country,  in 
order  to  present  the  same  for  payment.  Neither  the  payee 
nor  the  indorsee  of  a  note  could  have  anticipated  the  abscon- 
ding, absence  or  removal  of  the  maker;  and  it  would  not  be 
just,  to  cast  upon  him  a  new  burden  in  consequence  of  this 
unexpected  event. 

It  is  clear  from  what  has  been  said,  as  well  as  from  the 
adjudged  cases,  that  neither  the  bankruptcy,  insolvency,  nor 
death  of  the  acceptor  of  a  bill,  or  of  the  maker  of  a  promis- 
sory note,  is  of  itself  sufficient  to  dispense  with  the  necessity 
of  a  regular  demand  of  payment.  5  But  the  insolvency  of  the 

1 1  Lord  Raym.,  443,  742;  Putnam  v.  Sullivan,  4  Mass.  R.,  53;  Lechman 
v.  Jones,  1  Watts  and  Serg.,  126. 

8  Barnett  v.  Willes,  4  Leigh,  114. 

8  Dennis  v.  Walker,  7  N.  Hamp.,  199;  "Whittier  v.  Graffam,  3  Greenl.,  82. 
If  the  party  have  a  residence  here,  a  demand  must  be  made  at  his  residence. 
Putnam  v.  Sullivan,  supra;  Duncan  v.  McCullough,  4  S.  and  R..  480. 

4  McGruder  v.  Bank  of  Washington,  9  Wheat.,  588;  Anderson  v.  Drake,  14 
John.  R.,  114;  Gillespie  v.  Hanahan,  4  McCord  R.,  503;  Reid  v.  Morrison,  2 
Watts  and  Serg.,  401;  Wheeler  v.  Field,  6  M e teal f,  290;  3  Ohio  R-,  307; 
Louisiana  State  Ins.  Co.  v.  Shamburgh,  14  Martin  R.,  511;  Central  Bank  v» 
Allen.  16  Maine  R.,  41;  Taylor  v.  Snyder,  3  Denio  R.,  151. 

6  Galpin  v.  Hard,  3  McCord,  394.  The  necessity  of  demand  is  superseded 
in  cases  where  the  maker  of  a  note  or  the  acceptor  of  a  bill  has  absconded  or 
removed  into  a  distant  country;  but  in  other  cases,  where  the  drawee  of  a  bill 
or  the  maker  of  a  note  has  removed  from  the  place  where  the  instrument 
represents  him  to  reside,  or  where  he  did  reside  at  the  time  it  was  drawn  or 
made,  the  holder  is  bound  to  use  every  reasonable  endeavor  to  find  out  whither 
he  has  removed,  and  if  he  succeed  he  must  present  it  for  payment,  to  charge 


PBESEKTMEJTT     FOR   PAYMEHT.  487 

maker  or  acceptor  is  often  an  important  circumstance,  with 
other  evidence,  tending  to  shew  a  waiver  of  demand  and 
notice  j  i  just  as  the  absence  or  death  of  the  maker  or  acceptor 
may  be  shewn,  by  way  of  dispensing  with  the  necessity  of  a 
formal  or  personal  demand.  2  While  in  themselves  neither  of 
these  facts  or  events  works  the  slightest  alteration  in  the 
terms  of  the  contract  by  which  the  parties  are  respectively 
bound,  each  of  them  does  or  may  vary  the  mode  of  fulfilling 
the  conditions  precedent  to  the  liability  of  the  drawer  and 
indorsers.  If  the  maker  of  a  note  be  dead,  the  demand 

1  Leonard  v.  Gary,  10  Wend.,  604;  Whitney  v.  Abbott,  6  N.  Hamp.,  378; 
Leffingwell  &,  Pierpont  v.  White,  1  John.  Cas.,  99. 

•  1  McCord,  339. 


the  indorser.  The  circumstance  of  its  being  dated  at  a  particular  place  does 
not  make  it  payable  at  that  place  alone.  Decided  in  1825. 

Barton  v.  Baker,  1  Serg.  and  R.,  334.  If  the  drawer  of  a  promissory  note 
be  known  by  the  indorser  to  have  been  insolvent  when  the  note  was  made  and 
when  it  became  due,  the  indorser  is  nevertheless  entitled  to  notice  of  non- 
payment by  the  drawer.  But  if  the  indorser  has  accepted  from  the  drawer  a 
general  assignment  of  his  estate  and  effects,  notice  is  not  necessary.  Decided 
in  1815. 

The  Juniatta  Bank  v.  Hale,  16  Serg.  and  R.,  157.  The  death  of  the  drawer 
of  a  promissory  note  before  it  becomes  due,  and  the  taking  out  of  letters  of 
administration  upon  his  estate  by  the  indorsers  and  others,  before  the  note 
comes  to  maturity,  do  not  dispense  with  the  necessity  of  notice  to  the  indor- 
sers. of  non-payment  by  the  drawer.  Decided  in  18L(7. 

Clair  v.  Barr.  2  Marshall's  R.,  255.  Action  against  tlie  indorser  of  a  pro- 
missory note ;  held  that  the  insolvency  of  the  maker  does  not  absolve  the 
holder  from  his  duty  to  use  diligence  in  collecting  the  same  of  the  maker,  in 
the  manner  pointed  out  by  the  laws  of  Kentucky. 

Price  v.  Young.  1  McCord,  339.  Action  against  the  indorser  of  a  note,  the 
maker  of  which  had  died  before  it  became  due,  and  the  excuse  alleged  for  not 
making  demand  was  that  there  was  no  legal  representative  on  whom  demand 
could  be  made.  Per  Curium,  "  Where  a  demand  cannot  be  made,  the  law 
does  not  dispense  with  notice.  The  circumstances  which  prevented  it  and  the 
notice  are  still  required.  It  was  the  duty  of  the  holder  in  this  case,  admitting 
that  a  demand  could  not  have  been  made,  to  have  given  the  defendant  notice 
in  as  short  a  period  after  having  ascertained  that  the  demand  could  not  be 
made,  as  she  could  have  been  required  to  do,  if  a  demand  had  been  made. 
Suppose  the  demand  had  been  made  on  the  26th  of  October,  and  no  notice  to 
the  defendant  had  been  given  until  the  10th  or  15th  of  November,  could  this 
have  been  considered  a  reasonable  time,  when  the  parties  were  so  contiguous 
to  each  other  as  to  have  enabled  the  plaintiff  to  have  given  the  notice  in  five 


488  BILLS  OF  EXCHANGE  AND   PROMISSORY  NOTES. 

should  be  made  upon  his  legal  representative;!  unless  the 
note  is  payable  at  a  particular  place,  and  then  it  may  be  pre- 
sented for  payment  at  the  place  agreed  upon  between  the 
parties.  2 

And  where  the  note  falls  due  after  the  death  of  the  maker 
and  before  any  legal  representative  has  been  appointed,  the 
demand  may  be  made  at  the  residence  of  the  deceased,  or  if 
the  house  be  closed,  the  note  may  be  treated  as  dishonored, 
and  notice  given  accordingly :  so  in  the  case  of  a  bill  of 
exchange.  3  But  the  facts  shewing  or  dispensing  with  the 

1  5  Hill  R.,  234;  Shepherd  v.  Hawley,  1  Conn.  R.,  867. 

*  Philpot  v.  Bryant,  3  Carr.  and  P.,  244. 

8  16  Serg.  and  R.,  157;  5  Hill  R..  232,  236;  1  McCord.  339.  The  circum- 
stances which  dispense  with  the  necessity  of  a  demand,  do  not  relieve  the 
holder  from  the  duty  of  giving  due  notice  to  the  indorser.  Landry  v.  Stans- 
bury,  10  Louis.  Rep.,  484. 


hours,  or  at  most  in  one  day  ?  I  presume  not.  The  law  is  express  that  the 
notico  shall  be  given  as  soon  as  shall  be  conveniently  practicable."  1  Nott  and 
McCord,  438. 

Treadway  v.  Nicks  &  Johnson,  3  McCord,  195.  Action  against  defendants 
as  drawers.  Held  that  the  complaint,  which  did  not  allege  presentment,  non- 
payment and  notice  to  the  defendants,  was  insufficient. 

The  Commercial  Bank  v.  St.  Croix  Manufacturing  Co.,  23  Maine  R.,  280. 
This  action  was  brought  on  three  bills  of  exchange  drawn  by  Smith,  an  agent 
of  the  defendants,  on  Copclaud,  their  treasurer,  and  accepted  by  him,  and  also 
indorsed  in  the  same  manner  by  defendants;  and  it  was  held  that  the  treasurer 
being  the  disbursing  officer  of  the  corporation,  his  knowledge  that  the  drafts 
in  question  had  been  dishonored  must  be  considered  as  notice  to  the  defendants. 
Decided  in  1843. 

Moore  v.  Waitt,  13  New  Hamp.,  415.  The  drawer's  liability  is  not  changed 
by  a  notice,  when  the  bill  is  drawn,  that  it  will  be  discounted  or  left  for  collec- 
tion at  a  certain  bank  in  the  vicinity,  where  the  usage  is  not  to  make  present- 
ment when  the  bill  becomes  due,  but  to  give  notice  to  the  acceptor,  and 
drawer.  Decided  in  1843. 

Hunt  v.  Wadleigh,  26  Maine,  271.  The  insolvency  of  the  acceptor  of  a  bill 
or  draft  is  no  excuse  for  neglecting  to  present  the  same  for  payment.  The 
transfer  of  a  dishonored  bill  is  equivalent  to  drawing  a  new  draft  on  the  accep- 
tor payable  on  demand  or  at  sight;  and  the  holder  must  make  demand  within 
a  reasonable  time,  and  give  notice  of  non-payment  to  the  indorser  as  in  other 
cases.  A  promise  to  pay  with  full  knowledge  of  the  holder's  laches,  made 
after  the  dishonor,  will  bind  the  promisor;  but  will  not  bind  him  if  made  ia 
ignorance  of  the  facts. 

"U'hituey  v.  Abbott,  5  N.  Hamp.,  378.  In  this  c&\-^,  after  it  was  ascertained 
by  the  parties  that  the  makers  of  the  note  had  failed,  and  before  the  note  had 


PRESENTMENT    FOR   PAYMENT.  489 

demand,  must  be  proved  by  the  holder  or  party  seeking  to 
recover  upon  the  instrument.  Proof  that  the  defendant 
indorsed  the  note  after  and  with  knowledge  of  the  maker's 
death,  dispenses  with  the  necessity  of  a  demand,  especially 
where  the  law  gives  to  the  representative  already  appointed, 
a  certain  length  of  time  for  the  settlement  of  the  estate  and 
for  the  payment  of  the  debts  of  the  deceased,  i 

Where  the  house  of  the  maker  or  acceptor  is  closed,  it  is 
the  duty  of  the  holder  to  make  diligent  inquiry  for  him; 2 
and  in  case  he  has  removed  to  another  residence  in  the  same 
state,  he  is  bound  to  follow  him  and  present  the  bill  or  note 
for  payment.  3  The  rule  here  is  that  the  holder  must  exercise 
reasonable  diligence  in  order  to  find  the  party.  4  But  if  the 
note  specifies  the  place  of  payment,  or  a  bill  be  addressed  to 

1  Davis  v.  Francisco,  11  Missouri,  572;  Hale  v.  Burr,  12  Mass.  R..  86.  Mr. 
Justice  Story  questions  the  decision  in  this  latter  case  as  not  founded  on  prin- 
ciple. Story  on  Notes,  §  253  and  note. 

*  Ellis  v.  Commercial  Bank,  7  Howard  (Miss.,)  294.    The  holder  should 
inquire  for  the  acceptor  in  the  neighborhood. 

'14  John.  R.,  114;  19  id.  391;  2  Watts  and  Serg.,  401;  Wheeler  v.  Field,  6 
Mete.,  290. 

*  Carroll  T.  Upton,  2  Sand.,  171. 


become  due,  the  defendant  who  was  sued  as  an  indorser  told  the  plaintiff  that 
the  latter  should  have  no  trouble  about  it,  that  he,  the  defendant  would  pay 
it,  and  that  he  was  going  to  procure  the  money  to  pay  it:  And  it  was  held 
that  this  was  equivalent  to  an  absolute  promise  to  pay  the  note,  and  a  waiver 
of  demand  and  notice.  Decided  in  1831. 

Gibbs  v.  Cannon,  9  Serg.  and  R..  193.  On  a  guaranty  of  a  promissory  note, 
drawn  and  indorsed  by  others,  if  the  drawer  and  indorser  are  insolvent  when 
the  note  becomes  due,  this  would  prima  facie  be  evidence  that  the  guarantor 
was  not  prejudiced,  and  therefore  the  giving  him  notice  of  non-payment  is  in  such 
case  dispensed  with.  Decided  in  1822. 

In  Lawrence  v.  Ralston,  8  Bibb,  102,  it  was  held  that  the  absence  of  the 
defendant  from  his  residence  was  no  excuse  for  not  giving  him  notice  at  his 
residence  of  the  non-payment  of  a  bill  drawn  on  New-York.  The  defendant 
was  sued  as  an  indorser  of  a  bill  of  exchange  drawn  by  Aaron  Burr,  in  Decem- 
ber, 1806,  and  the  defendant  was  absent  for  tome  time,  having  gone  down  the 
river,  and  the  notice  of  dishonor  was  not  served  till  his  return  to  his  home  in 
Louisville. 

In  Camidge  v.  Allenby,  6  Barn,  and  Cress.,  873.  It  appeared  that  certain 
notes  of  the  bank  of  Dobson  8t  Co.,  were  delivered  in  payment  of  the  purchase 

29 


490  BILLS  OF  EXCHANGE  AND   PROMISSORY  NOTES. 

the  acceptor  at  a  certain  number  of  a  street  named,  a  present- 
ment at  the  place  indicated  will  be  sufficient  if  made  in  the 
usual  hours  of  business,  though  the  place  be  closed  and  no 
person  found  there  to  give  an  answer  respecting  the  bill,  i  In 
such  a  case,  the  place,  as  well  as  the  time  of  payment,  is 
fixed  by  the  agreement  between  the  parties;  and  it  is  the  duty 
of  the  debtor  to  be  there  within  the  proper  hours  of  business, 
ready  to  pay,  either  himself  personally  or  by  his  agent. 

Where  a  person  goes  abroad  leaving  an  agent  at  home 
authorized  to  accept  bills,  and  he  accepts  one  for  him,  the 
bill  when  due  should  be  presented  to  the  agent  for  payment;  2 
or  if  the  acceptor  go  abroad  after  having  accepted  the  bill, 
the  presentment  should  be  made  at  his  residence  or  place  of 
business,  or  to  his  known  and  general  agent.  3 

As  against  the  drawer,  where  he  has  no  ground  to  expect 
that  his  bill  will  be  paid,  and  no  effects  in  the  hands  of  the 

J  De  Wolf  v.  Murray,  2  Sand.  R.,  166. 
*  Phillips  v.  Astling,  2  Taunt.,  206. 
3  Cromwell  v.  Hinson,  2  Esp.  R.,  611. 


money  of  some  goods,  and  that  the  bank  failed  on  the  same  day  in  the  after- 
noon, neither  of  the  parties  knowing  of  the  insolvency  of  the  bank  at  the  time ; 
the  notes  were  not  circulated  or  presented  for  payment,  but  returned  to  the 
purchaser  a  week  after  the  sale:  Held,  under  the  circumstances,  that  the 
vendor  of  the  goods  was  guilty  of  laches,  and  had  thereby  made  the  notes  his 
own,  and  consequently  that  they  operated  as  a  satisfaction  of  the  debt.  De- 
cided in  1827. 

Esdaile  v.  Sowerby,  11  East,  114.  Lord  Ellenborough,  C.  J.  :  "  It  is  too 
late  now  to  contend  that  the  insolvency  of  the  drawer  or  acceptor  dispenses 
with  the  necessity  of  a  demand  of  payment,  or  of  notice  of  the  dishonor. 
And  as  to  knowledge  of  the  dishonor  by  the  person  to  be  charged  on  the  bill 
being  equivalent  to  due  notice  of  it  given  to  him  by  the  holder,  the  case  of 
Nicholson  v.  Gouthit,  is  so  decisive  an  authority  against  that  doctrine,  that  we 
cannot  enter  again  into  the  discussion  of  it."  Nicholson  v.  Gouthit,  2  H.  Black., 
609. 

Philpot  v.  Bryant,  3  Carr.  and  P.,  244.  It  appeared  in  this  case  that  the 
.drawee  had  died  before  the  bill  became  due ;  and  the  objection  was  raised  that 
the  holder  of  this  bill,  which  was  payable  after  date,  should  have  alleged 
presentment  for  acceptance ;  but  it  was  held  not  necessary,  and  that  a  bill 
accepted  payable  at  No.  18,  Bishopsgate  street,  was  properly  presented  at 
that  place  for  payment,  notwithstanding  the  death  of  the  drawee.  Decided  iu 
1827. 


PRESENTMENT    FOR    PAYMENT.  491 

drawee,  a  presentment  of  the  bfll  for  payment  is  not  necessary 
to  charge  him.  The  defendant  drew  his  bill  on  John  Twist, 
payable  six  months  after  date;  and  the  complaint  against  him 
alleged  that  he  had  not  at  the  time  of  drawing  nor  at  any  time 
afterwards  before  it  became  due,  any  effects  in  the  hands  of 
the  drawee,  nor  any  reasonable  grounds  to  expect  that  he 
would  have  any,  or  that  the  bill  would  be  paid,  and  further 
that  he  had  not  sustained  any  injury  or  damage  by  reason  of 
the  bill's  not  having  been  presented  for  payment  on  the  day 
it  became  due;  and  a  verdict  having  been  rendered  for  the 
plaintiff,  Lord  Denman,  C.  J.  delivering  the  opinion  of  the 
King's  bench,  said :  1  Many  cases  establish  that  notice  of  dis- 
honor need  not  be  given  to  the  drawer  in  such  a  case;  and 
the  reason  assigned  is,  because  he  is  in  no  respect  prejudiced 
by  want  of  such  notice,  having  no  remedy  against  any  other 
party  on  the  bill.  This  reason  equally  applies  to  want  of 
presentment  for  payment,  since,  if  the  bill  were  presented  and 
paid  by  the  drawee,  the  drawer  would  become  indebted  to  him 
in  the  amount,  instead  of  being  indebted  to  the  holder  of  the 
bill,  and  would  be  in  no  way  benefited  by  such  presentment 
and  payment."  It  was  accordingly  held  that  want  of  effects 
will  operate  as  an  excuse  for  a  failure  to  present  for  payment, 
under  such  circumstances  as  will  dispense  with  a  notice  of 
dishonor;  and  the  rule  in  arrest  (5f  judgment  was  refused.  2 

1  Terry  v.  Parker,  6  Adolphus  and  Ellis,  502.  The  marginal  note  to  this 
ease  is  in  these  words  :  "  If  the  drawer  of  a  bill  of  exchange  have  no  effect* 
in  the  hands  of  the  drawee  at  the  time  of  drawing  the  bill,  and  of  its  maturity, 
and  have  no  ground  to  expect  that  it  will  be  paid,  it  is  not  necessary  to  present 
the  bill  at  maturity;  and  if  it  be  presented  two  days  after  and  payment  be  re- 
fused, the  drawer  is  liable."  The  bill  in  this  case  had  not  been  presented  for 
acceptance. 

*  The  opinion  contained  the  following  criticism  on  two  cases  cited  on  the 
argument  :  "  The  case  of  De  Berdt  v.  Atkinson,  2  II.  Bl  ,  836,  was  an  action 
on  a  promissory  note  against  the  payee  and  mdorser,  who  had  lent  his  name, 
knowing  that  the  maker  was  insolvent;  and  it  was  held  that  be  was  not  dis- 
charged by  the  note  not  having  been  presented  till  the  day  after  it  was  due, 
and  notice  of  dishonor  not  having  been  given  for  several  days.  But  that  case 
can  hardly  be  supported,  inasmuch  as  the  defendant  was  not  the  party  for 
whose  accommodation  the  note  was  made;  on  the  contrary,  be  lent  his  name 
to  accommodate  the  maker.  Neither  is  the  case  of  Hapley  T.  Dufresne,  15 
East,  275,  an  authority  the  other  way;  for,  although  that  was  a  case  of  aa 


492  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

The  duty  of  the  holder  to  use  diligence  in  presenting  the 
bill  for  payment  necessarily  implies  an  exception  in  favor  of 
those  unavoidable  accidents  which  must  prevent  the  party 
from  doing  it  within  the  regular  time,  i  Inevitable  accident, 
superior  force,  or  a  contagious  disease  that  prevails  so  as  to 
interrupt  all  business,  will  excuse  a  delay  to  present  for  pay- 
ment so  long  as  the  preventing  cause  continues.  2  The  true 
question  in  such  cases  appears  to  be,  whether  it  was  physically 
or  morally  impossible  for  the  holder  to  present  the  bill  or  note 
for  payment  in  due  time.  3  Mr.  Justice  Story  mentions  among 
the  accidents  that  excuse  delay,  political  events  which  inter- 
rupt intercourse  between  different  countries,  or  different  parts 
of  the  same  country,  the  stoppage  of  the  mail  by  ice  or  snow 
or  freshets,  the  detention  of  a  vessel  by  contrary  winds,  a  loss 
of  the  bill  by  robbery,  the  sudden  death  of  the  holder,  or  of 
his  correspondent  to  whom  the  bill  has  been  sent  for  present- 
ment. 4  But  it  requires  to  be  noticed  that  neither  of  these 
events  will  excuse  a  delay,  which  is  not  the  direct  and  neces- 
sary consequence  of  the  event  or  cause  preventing  the  demand. 
For  instance,  the  mistake  of  a  clerk  in  the  post  office  occa- 
sioning a  delay  in  the  transmission  of  a  bill  will  form  no 
excuse,  if  it  also  appears  that  the  bill  was  sent  in  a  wrong 
direction  by  the  holder.  On  the  same  principle,  if  the  bill  or 
note  is  sent  by  mail  at  so  late  a  day  as  to  render  it  uncertain 
whether  it  will  arrive  in  time,  or  if  the  holder  die,  or  if  a  loss 
of  the  bill  occur  by  robbery  or  otherwise,  a  sufficient  length 
of  time  before  it  becomes  payable,  to  give  the  holder  or  his 
representative  an  opportunity  to  make  a  regular  demand,  it 
is  evident  that  he  cannot  allege  either  of  the  causes  men- 

1  Patience  v.  Townley,  2  Smith,  223. 

9  Tunno  v.  Lague,  1  John.  Gas.,  1;  Story  on  Bills,  §  308. 

'  Schofield  v.  Bayard,  3  Wend.,  488. 

4  Story  on  Bills,  §  308,  309. 


acceptance  for  the  accommodation  of  the  defendant,  Lord  Ellenborough  non- 
suited the  plaintiff,  because  the  bill  was  presented  to  the  acceptor's  bankers 
after  banking  hours ;  yet  that  non-suit  was  set  aside  on  the  ground  of  there 
being  evidence  of  a  subsequent  waiver  j  and  the  point,  whether  the  drawer  was 
entitled  to  object  to  the  want  of  due  presentment  was  not  determined." 


PRESENTMENT    FOR    PAYMENT.  493 

tioned  as  an  excuse  for  delay,  i  Like  a  common  carrier  who 
may  excuse  or  justify  delay  in  the  carriage  of  goods  by  such 
events  as  interrupt  the  navigation  or  prevent  the  transporta- 
tion from  being  made  within  the  usual  time,  the  holder  can- 
not interpose  the  excuse  where  his  own  negligence  has  con- 
tributed to  the  delay.  2  Nor  can  he  excuse  a  failure  to 
present  a  note  for  payment  by  shewing  that  a  violent  storm 
prevailed  on  the  day  it  fell  due,  unless  he  shews  that  the 
roads  were  thereby  rendered  impassable,  and  thus  proves  that 
a  demand  could  not  in  fact  be  made.  3 

Where  a  person  enters  into  a  contract,  and  in  express  terms 
undertakes  the  performance  of  a  condition  precedent,  he  will 

1  3  Wend.,  488;  The  Windham  Bank  v.  Norton,  Converse  8c  Co.,  22  Conn.  R., 
213,  decided  in  1852.  The  holder  is  bound  to  use  reasonable  diligence  in  for- 
warding and  presenting  a  bill  or  note  for  payment;  and  the  negligence  of  his 
agents  is  his  negligence.  But  the  holder  of  a  bill  who  forwards  it,  say  from 
New-York  to  Philadelphia,  by  mail,  in  time  to  reach  the  latter  place,  is  not 
answerable  for  the  consequences  of  a  mistake,  made  by  a  clerk  in  the  post 
office  at  New -York,  by  marking  the  mail  bags  designed  for  Philadelphia/or 
Washington ,  through  which  mistake  they  are  carried  forward  beyond  their 
destination,  and  do  not  come  back  to  it  until  it  is  too  late  for  presentment  on 
the  right  day.  The  same  general  principle  is  applied  here,  that  was  adopted 
in  Schofield  v.  Bayard,  3  Wend.,  488.  In  the  latter  case  the  holder  had  sent 
the  bill  to  Liverpool  when  he  should  have  sent  it  direct  to  London,  and  tho 
mistake  or  negligence  of  the  holder  was  treated  as  evincing  a  want  of  due 
diligence  on  his  part.  On  the  other  hand  in  the  case  above  cited,  the  holder 
had  sent  his  bill  by  mail  direct  to  Philadelphia,  in  time  to  reach  that  place  in 
season  for  a  due  presentment. 

Aborn  v.  Bosworth,  1  R.  Island  R.,  401.  This  was  an  action  against  the 
drawer  of  a  bill  of  exchange  payable  at  sight,  and  declared  upon  as  lost,  and 
the  plaintiff  was  allowed  to  prove  the  loss  by  his  own  oath,  and  then  shew  its 
contents;  and  the  court  in  charging  the  jury  said  :  '•  As  a  general  proposition 
it  is  not  enough  to  prove  loss;  unless  the  bill  was  either  destroyed,  or  so  in- 
dorsed, or  so  left  without  indorsement,  that  the  finder  or  any  subsequent  holder 
could  not  recover  upon  it.  •  •  •  Another  defence  is  the  delay  in  making 
the  demand  upon  the  drawee  and  the  want  of  protest.  The  fact  that  the  bill 
is  lost  is  an  excuse  for  delay,  but  for  no  more  than  reasonable  delay.  Tho 
holder  was  bound  to  exercise  reasonable  diligence,  and  to  make  a  reasonable 
presentment  of  his  claim  as  upon  a  lost  bill." 

*  Edwards  on  Bailm.,  623-520.  The  cases  excusing  a  delay  by  the  carrier 
are  referred  to  only  as  an  illustration  of  this  principle,  that  the  excuse  will  not 
be  allowed  in  any  case  where  the  party's  own  neglect  brings  the  goods  to  be 
carried  under  the  operation  of  forces  causing  delay,  nor  will  such  an  excuse  be 
valid  after  the  preventing  cause  has  ceased  to  operate. 

1  Barker  v.  Parker,  6  Pick.,  80. 


494  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTE» 

not  be  excused  or  released  from  his  undertaking  by  accident 
or  inevitable  necessity,  without  fault  on  his  part,  i 

By  whom  to  be  made.  Notes  and  bills  ought  to  be  presented 
for  payment  by  the  holder  or  by  his  authorized  agent;  and  a 
person  to  whom  a  note  or  bill  is  indorsed  for  collection  is  to 
be  regarded  as  a  holder  for  the  purpose  of  making  a  demand 
and  giving  notice.  2  But  an  authority  to  demand  payment 
confered  on  an  agent,  need  not  be  in  writing,  3  and  need  not 
be  given  in  express  terms  :  4  if  the  notary  or  agent  have  the 
paper  in  his  possession  ready  to  be  delivered  up,  his  right  to 
demand  and  receive  payment  will  be  implied.  5  A  mere 
stranger  cannot  charge  the  parties  by  giving  them  notice  of 
dishonor;  6  but  a  party  in  possession  of  the  paper,  though  it 
come  into  his  hands  by  accident,  as  by  the  death  of  an  agent, 
may  and  ought  to  present  it  for  payment,  and  give  the  usual 
notice  of  refusal.  7  And  when  a  negotiable  note  or  bill  comes 
into  the  hands  of  any  person  under  a  blank  indorsement, 
prima  facie  he  is  the  holder;  and  entitled  to  demand  and 
recover  the  amount  due  thereon.  8 

Where  the  holder  dies  before  the  note  or  bill  becomes  due, 
it  should  be  presented  for  payment  by  his  legal  representa- 
tives. 9  And  so  where  the  holder  assigns  his  personal  estate 
for  the  benefit  of  creditors,  the  presentment  should  be  made 
by  his  assignee :  10  and  on  the  same  ground,  trustees  acting  as 
a  committee  of  an  insane  person,  and  receivers  appointed  by 
authority  of  law,  should  take  care  to  present  in  due  time,  all 

1  Carpenter  v.  Stevens.  12  "Wend..  589;  Oakley  v.  Morton,  1  Kernan  R.,  25, 
and  cases  there  cited. 

8 10  Mod.,  286;  5  East,  476;  Chitty  on  Bills,  365;  5  Cowen,  303;  1  Hill  R., 
263;  2  id.;  451. 

8  Bank  of  Utica  v.  Smith,  231;  Shed  v.  Bret,  1  Pick.,  401. 

4  Idem;  and  Hartford  Bank  v.  Parry,  17  Mass.,  95;  7  id.  486;  9  id.  423. 

•  Sussex  Bank  v.  Baldwin,  2  Harrison,  487,  and  cases  above  cited. 

6  3  Wend.,  179;  Jones  v.  Fort.  9  Barn,  and  Cress.,  764. 

7  Chitty  on  Bills,  365. 

8  Mauran  v.  Lamb,  7  Cowen  R.,  174.     The  case  is  the  same  when  the  instru- 
ment is  drawn  payable  to  bearer.     Sherwood  v.  Roys,  14  Pick.,  172. 

•  Byles  on  Bills,  159. 

w  Jones  v.  Fort,  9  Barn,  and  Cress.,  764. 


PRESENTMENT    FOR    PAYMENT.  495 

bills  and  notes  belonging  to  the  estate  committed  to  them,  for 
payment.  1 

In  brief,  the  receipt  of  a  bill  or  note  for  collection,  2  as  col- 
lateral security,  3  or  on  a  sale  of  goods,  4  implies  an  under- 
taking from  the  receiver  to  the  party  to  the  instrument,  who 
would  be  entitled  to  bring  an  action  on  paying  it,  or  taking 
it  up,  to  present  the  same  in  proper  time  for  payment  and 
take  the  necessary  steps  to  charge  the  parties  thereto. 

Where  and  to  whom.  In  the  next  place,  to  whom  and  where 
should  bills  and  notes  be  presented  for  payment  ?  The  same 
general  rules  prevail  here  as  in  the  presentment  of  bills  for 
acceptance.  5  If  the  note  be  drawn,  or  the  bill  accepted,  pay- 
able at  large,  that  is  to  say,  without  specifying  any  place  of 
payment,  the  instrument  should  be  presented  for  payment  to 
the  maker  or  acceptor  at  his  residence  or  place  of  business.  6 
The  exceptions  to  this  principle,  in  the  case  of  removal  from 
the  state  or  country,  or  other  cause  preventing  a  presentment, 
have  been  noticed  in  a  former  place.  7 

The  demand  of  payment  is  not  a  mere  form;  it  is  an  act 
necessary  to  be  performed  by  the  holder  in  order  to  charge 
the  drawer  and  indorsers;  and  accordingly,  in  an  action  against 
either  of  these  parties,  the  plaintiff  must  allege  a  presentment 
to  the  maker  or  acceptor  for  payment.  8  But  it  is  not  neces- 
sary for  him  to  prove  in  support  of  this  averment  that  the 
paper  was  presented  to  the  maker  or  acceptor  personally;  9  it 

1  In  such  cases  the  assignment  operates  as  a  transfer  of  the  title,  so  that  the 
receiver  is  to  be  regarded  as  a  holder. 

•  Bayley  on  Bills,  ch.  7,  §  1 ;  20  Wend.,  821. 

•  Russell  v.  Hester,  10  Ala.,  536j  Foot  v.  Brown,  2  M'Lean,  869. 

4  Tobey  v.  Barber,  5  John.  R.,  68;  Jones  v,  Savage,  6  Wend.,  658.;  Dayton 
v.  Trull,  23  Wend.,  845. 

•  See  former  chapter  on  that  subject. 

•  Degrand  v.  Banks,  1C  Louis.  461 ;  14  John.  R.,  114;  1  Corast.,  821.    Local 
statutes  sometimes  point  out  the  mode  of  presenting  and  protesting  negotiable 
paper,  and  these  of  course  are  to  be  examined  carefully  to  determine  the  steps 
to  be  taken  in  particular  cases.     See  notes  on  a  former  page. 

T  9  Wheat.,  598,  and  ante  p.  484-489. 

8  Jackson  v.  Henderson,  8  Leigh,  197;  7  Wend.,460;  2  Show.,  180;  7  East, 
231. 

•  Brown  v.  M'Dermot,  5  Esp.  R.,  266. 


496  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

is  sufficient  if  shewn  to  have  been  made  at  his  house  or  place 
of  business,  i 

When  a  bill  of  exchange  is  addressed  to  the  drawee  at  a 
particular  place  and  accepted  in  general  terms,  it  is  enough  if 
the  notary  take  the  bill  to  the  place  designated  and  present  it 
there  for  payment  within  the  usual  hours  of  business ;  and  if 
the  place  be  found  closed,  and  no  person  there  to  give  an 
answer  respecting  the  bill,  a  certificate  of  such  presentment 
will  be  sufficient  proof  of  demand.  2 

When  a  bill  or  note  is  drawn  payable  at  a  place  named,  it 
is  essential  to  shew,  in  an  action  against  the  drawer  or  indorser, 
a  presentment  at  the  place  appointed.  3  This  is  so  both  in 
this  country  and  in  England  where  all  acceptances  are  declared 
general  by  statute,  unless  made  payable  at  a  particular  place 
and  not  elsewhere.  4  The  rule  is  that  a  demand  must  be 
made  on  the  maker  of  the  note  on  the  day  it  falls  due;  the 
exception  is  that  when  the  note  is  payable  at  a  particular 
place,  such  demand  need  not  be  made,  if  the  holder,  or  any 
one  for  him,  is  at  the  place  with  the  note,  so  that  he  may 
receive  the  money  and  give  up  the  note.  5  And  hence,  a  note 
made  payable  at  a  particular  bank  is  sufficiently  demanded, 
if  left  there  for  collection  on  the  day  it  becomes  due;  6  or  if 
presented  at  the  bank  for  payment  on  that  day,  within  the 
time  allowed  by  the  custom  of  the  bank  for  such  presentation.  7 

J3  Denio,  145;  2  Hill  R.,  635;  2  Sand.,  166. 

a  DeWolf  v.  Murray,  2  Sand.,  166;  2  Hill  R.,  635;  Hine  v.  Allely,  4  B.  and 
Adol.,  624. 

8  Seneca  Co.  Bank  v.  Neass,  5  Denio,  329;  Woodworth  v.  Bank  of  America, 
19  John.  R.,  391;  18  id.  315;  3  John  R.,  207;  Gihbs  v.  Mather,  8  Bing.,f214. 

4  8  Bing..  214;  Wilmot  v.  "Williams,  8  Man  and  Gr.,  1017;  5  id.  340;  4  id. 
7;  1  Moore  and  Scott,  387. 

6 13  Mass.,  558. 

6  Nichols  v.  Goldsmith,  7  Wend.,  160. 

7  Wolcott  v.  Van  Santvoord,  17  John.  R.,  248;  Flint  v.  Rogers,  15  Maine 
R.,  67.     The  presentment  of  a  draft  payable  at  a  particular  hank,  to  the 
cashier  for  payment  at  the  hank,  on  the  day  it  fell  due,  hut  after  business 
hours,  who  refused  payment  because  the  acceptors  had  provided  no  funds,  is 
sufficient.    The  objection  that  the  demand  was  not  seasonable,  that  is  to  say, 
was  not  in  business  hours,  comes  too  late  if  it  is  not  made  at  the  time  of  pre- 
sentment.    The  cashier,  in  this  case,  whose  duty  it  was  to  attend  to  business 
of  this  sort,  was  at  the  bank  and  answered  the  demand  at  the  time  it  waVmade, 


PRESENTMENT    FOR  PAYMENT.  497 

The  instrument  being  made  payable  at  a  specified  place,  it  is 
immaterial  where  the  maker  or  acceptor  resides;  and  it  is 
sufficient  if  the  presentment  be  made  at  the  place  so  named 
or  otherwise  agreed  upon  between  the  parties,  i 

But  if  a  note  or  bill  drawn  payable  at  a  bank  be  not  left  or 
presented  there  for  payment  at  its  maturity,  the  drawer  and 
indorsers  are  prima  facie  discharged.  2  The  note  or  bill  being 
in  the  bank  ready  to  be  surrendered  upon  payment,  dispenses 
with  the  necessity  of  making  any  formal  demand;  and  it  is 
understood  to  be  the  custom  of  banks  holding  bills  or  prom- 
issory notes,  payable  at  their  own  counter,  to  wait,  on  the  day 
of  the  maturity  of  the  note  or  bill  until  the  close  of  business 
hours,  and  then,  if  the  maker  or  acceptor  does  not  come  to 
pay  and  has  no  funds,  to  give  notice  of  non-payment,  without 
making  any  other  demand.  3  If  the  bank  is  the  owner  of  the 
note  or  bill,  it  will  be  presumed,  in  the  absence  of  proof  to 
the  contrary,  that  the  instrument  was  at  the  bank  ready  to  be 
delivered  up  on  payment;  which  is  all  that  the  holder  is 
bound  to  do.  4  So,  if  the  person  at  whose  house  the  note  or 
bill  is  payable,  be  himself  the  holder,  it  is  a  sufficient  demand 
if  he  examine  his  books,  or  in  any  other  manner  ascertain  that 
no  funds  have  been  left  for  its  payment;  and  the  failure  of 
the  acceptor  or  maker  to  appear  and  pay  the  bill  or  note  is 

'Smith  v.  Little,  10  N.Hamp.,  626;  Sanderson  v.  Oakey,  14  Louis.  R., 
373;  Central  Bank  v.  Allen,  16  Maine,  41;  11  Wheat.,  171;  2  Peters,  643;  6 
How.  U.  S.,  69;  12  Mass.,  172. 

1  Folger  v.  Chase,  18  Pick.,  68. 

*  Gillctt  v.  Averill.  5  Denio,  85;  2  Peters,  648;  6  Mass.,  624;  Tuckerman  T. 
Hartwell,  3  Greenl.,  147;  Evans  v.  St.  John,  9  Porter,  186. 

4  18  Pick.,  68. 


and  it  appearing  that  the  acceptors  had  provided  no  funds  the  court  held  the 
demand  sufficient.    See  Garnett  v.  Woocock,  1  Stark.  R.,  476. 

Church  v.  Clark,  21  Pick.,  310.  A  note  is  due  on  demand,  made  at  any 
time  on  the  third  day  of  grace;  but  where  a  note  is  drawn  payable  at  a  bank, 
the  effect  of  the  contract  is,  that  the  note  shall  be  paid  at  some  time  during 
the  usual  hours  of  business  at  such  bank;  and  there  is  no  default,  on  which  an 
action  can  be  commenced,  until  the  close  of  the  hours  of  business.  So  held 
where  the  action  was  commenced  at  one  minute  past  twelve  o'clock  at  night, 
on  the  morning  of  the  third  day  of  grace. 


I 

498  BILLS    OF   EXCHANGE  AND    PROMISSORY  NOTES. 

sufficient  proof  of  a  refusal  to  pay.  i  In  all  such  cases  tlie 
indorsers  as  well  as  the  maker  and  acceptor,  engage  that  pay- 
ment shall  be  made  at  the  place  named  for  that  purpose.  2 

In  some  instances  it  becomes  the  duty  of  the  maker  of  a 
note  and  of  the  acceptor  of  a  bill  to  make  enquiries  for  the 
instrument,  to  the  end  that  he  may  find  and  pay  it  on  the  day 
it  is  payable  :  as  where  a  note  is  made  payable  at  a  certain 
bank  that  ceases  to  exist,  or  at  the  counting  room  of  a  firm 
that  is  dissolved,  before  the  note  matures.  3  Neither  the  dis- 
continuance of  the  bank,  nor  the  dissolution  of  the  firm  can 
in  any  respect  lessen  the  binding  force  of  the  contract  entered 
into  by  the  parties  to  the  instrument;  and  therefore  it  has 
been  held  in  such  cases,  that  the  note  may  be  presented  for 
payment  at  the  firm  or  bank  doing  business  in  the  place  of 
those  which  have  been  discontinued.  4  But  where  the  maker 

1  2  H.  Bla.,  509;  6  Denio,  85. 

9  6  Mass.,  525. 

8  Central  Bank  v.  Allen,  16  Maine  ;  Sanderson  v.  Oakey.  14  Louis.  R.,  373  j 
Roberts  v.  Mason,  1  Ala.,  373. 

4  Idem;  Central  Bank  v.  Allen,  16  Maine  R.,  41.  The  action  was  against 
the  indorser  of  a  promissory  note.  Per  Curiam  :  '•  The  maker  had  promised 
to  pay  it  at  a  day  and  place  certain.  The  place,  the  Branch  Bank  in  Portland, 
was  well  known  and  understood  at  the  date  of  the  note.  Before  its  maturity, 
that  bank  ceased  to  have  a  place  of  business  in  that  city.  It  has  been  held 
that  where  a  bill  is  drawn  and  accepted,  payable  at  a  particular  house,  going 
to  that  house  with  the  bill  on  the  day  of  payment,  and  finding  it  closed,  is  a 
sufficient  presentment.  And  we  are  inclined  to  the  opinion,  that  the  Branch 
Bank  having  ceased  to  operate,  if  their  banking  house  had  not  been  occupied 
by  a  similar  institution,  presentment  would  have  been  excused.  *  *  *  But 
if  the  discontinuance  of  the  Branch  Bank  at  Portland,  has  the  same  effect  as 
if  no  place  of  payment  had  been  appointed,  we  are  of  opinion  that  such  dili- 
gence was  used  by  the  messenger  of  the  holder,  as  excused  a  personal  demand 
upon  the  maker.  He  testifies  that  he  made  diligent  inquiry  for  his  place  of 
residence,  which  it  appears  had  been  at  Portland,  and  was  informed  that  he 
had  gone  into  the  Western  country,  and  particularly  that  he  had  this  informa- 
tion from  the  maker's  brother  who  had  been  connected  with  him  in  business. 
The  answers  he  obtained  upon  these  inquiries,  were  very  clearly  admissible  as 
a  part  of  the  res  gesta.  The  holder  was  under  no  obligation  to  send  into  the 
Western  country  to  make  demand,  but  the  written  demand  of  payment,  left 
at  Moorhead's,  his  former  residence  in  Portland,  was  sufficient.  McGurder  v. 
Bank  of  Washington,  9  Wheat.,  598;  Anderson  v.  Drake,  14  John.  R.,  114. 

In  Sanderson  v.  Oakey,  and  al.,  14  Louis.  R.,  373.  the  action  was  against 
the  defendants  as  makers  of  a  promissory  note,  payable  to  the  order  of 
"  Joshua  Fisher,  at  his  counting  house  in  New-York."  The  payee  took  Henry 


PRESENTMENT   FOR   PATMEKT.  499 

resides  in  the  same  village  or  city,  doubtless  the  prudent 
course  would  be  to  present  the  note  for  payment  in  the  same 
manner  as  if  it  had  been  drawn  payable  at  large,  especially 
where  no  bank  or  firm  succeeds  the  other  in  the  same  room. 

Where  a  note  is  made  payable  at  a  bank,  the  demand  of 
payment  must  be  made  at  the  bank;  it  is  not  sufficient  to  shew 
a  demand  made  of  the  cashier,  i  But  where  a  note  is  made 
payable  at  the  maker's  dwelling  house,  and  the  same  is  pre- 
sented to  him  personally  for  payment  in  the  neighborhood, 
and  he  makes  no  objection  to  the  place  of  demand,  it  is  held 
sufficient.  2 

When  a  bill  or  note  is  drawn  payable  at  either  of  two 
places,  the  holder  may  present  it  for  payment  at  either,  and 
treat  it  as  dishonored  in  case  it  is  not  duly  paid.  3  So  a  note 

1  Seneca  Co.  Bank  v.  Neass,  5  Denio,  829;  S.  C.,  8  Comst.,  442;  6  Met. ,308. 

*  Baldwin  v.  Farnsworth,  1  Fairf.,  414. 

1  Beeching  v.  Gower,  1  Holt,  N.  P.,  813.  Where  a  note  is  made  payable  at 
either  of  the  banks  .in  a  large  city,  where  there  are  some  twenty  banks,  it 
seems  the  note  is  not  payable  at  a  place  certain,  and  that  it  is  the  duty  of  the 
holder  to  notify  the  maker  at  which  of  them  it  will  be  left  for  payment.  North 
Bank  v.  Abbott,  13  Pick.,  465. 


Fisher,  his  brother,  into  partnership  before  the  note  became  due,  and  continued 
business  in  the  same  place;  and  the  firm  indorsed  the  note  over  to  the  plaintiff; 
and  payment  of  the  note  was  demanded  at  the  counting  room  of  the  firm  at 
its  maturity;  and  it  was  held  that  the  indorsement  was  valid  and  the  demand 
properly  made. 

In  Roberts  v.  Mason,  1  Ala.  R.,  New  Series,  374,  the  action  was  against  an 
jndorser  of  a  promissory  note  "  negotiable  and  payable  at  the  office  of  dis- 
count and  deposit  of  the  Bank  of  the  United  States  at  Mobile."  On  the  trial 
proof  was  adduced  to  shew  that  the  office  of  discount  and  deposit  of  the  Bank 
of  the  U.  S.,  at  Mobile,  was  sold  out  to  the  Bank  of  Mobile,  and  ceased  to  hare 
a  place  of  business  in  that  city  before  the  note  matured;  and  evidence  was  also 
introduced  tending  to  shew  that  one  of  the  makers  resided  there  all  the  time, 
or  at  least  at  the  time  the  note  became  due,  and  had  a  known  place  of  busi- 
ness there.  The  note  having  been  presented  at  the  Branch  of  the  Bank  of  the 
State  of  Alabama,  at  Mobile,  and  not  elsewhere,  it  was  held  that  the  circum- 
stances disclosed  dispensed  with  the  necessity  of  making  a  personal  demand  of 
the  makers,  and  that  it  was  enough  to  present  the  note  for  payment  at  the 
place  designated.  "  This  being  impracticable  for  the  reasons  already  stated, 
was  the  holder  bound  to  call  on  the  makers  for  payment  ?  We  think  not." 
The  indorser's  contract  was  to  pay  in  a  certain  event,  and  as  that  event  was 
rendered  impossible  of  performance  by  an  event  over  which  the  holder  had  no 
control,  it  did  not  operate  to  interpolate  a  new  condition  into  his  contract. 


600  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

or  bill  made  payable  in  a  particular  city,  where  the  maker  or 
acceptor  does  not  reside,  specifying  no  place  of  payment,  may 
be  protested  for  non-payment,  or  treated  as  dishonored,  and 
notice  given  accordingly;  a  search  for  the  party  being  unne- 
cessary, where  it  is  certain  to  prove  unavailing,  i 

If  a  note  be  made,  or  a  bill  be  accepted  by  several  persons 
who  are  not  partners,  a  demand  of  payment  must  be  made 
upon  each,  as  in  other  cases,  personally,  or  at  his  dwelling 
house  or  place  of  business.  2  And  if  one  of  them  dies  before 
the  day  of  payment  arrives,  the  demand  must  be  upon  his 
legal  representatives.  3  But  where  a  firm  accepts  a  bill,  and 
one  of  the  partners  dies  before  it  becomes  due,  the  present- 
ment for  payment  should  be  made  to  the  survivor,  on  whom 
in  the  first  instance  the  liability  of  the  firm  devolves.  4  If, 
however,  the  bill  or  note  is  made  payable  at  a  particular 
place,  the  death  of  a  maker  or  acceptor  does  not  impose  upon 
the  holder  any  new  duty;  it  is  enough  if  he  present  it  for 
payment  at  the  place  appointed.  5 

The  contract  of  the  indorser  being  raised  or  implied  by  law, 
is  fixed  and  rendered  certain  by  the  act  of  indorsement;  so 
that  if  a  note  payable  generally,  be  indorsed  and  afterwards 
altered  by  the  maker  and  made  payable  at  a  particular  bank, 
and  payment  is  accordingly  demanded  only  at  the  bank,  the 
indorser  is  discharged.  6  But  a  mere  memorandum  at  the 
foot  of  a  note  naming  or  appointing  a  place  of  payment,  is 
not  a  material  alteration  of  the  contract,  and  a  presentment 
made  according  to  such  direction  will  be  good.  7  Such  a 

1  Mason  v.  Franklin,  3  John.  R.,  202,  and  Boot  v.  Franklin,  id.  207 ;  Gum- 
ming v.  Fisher,  Anthon  N.  P.,  1. 

*  Union  Bank  &c.  v.  Willis,  8  Met.,  504. 

8  5  Hill  R.,  234;  Shepherd  v.  Hawley,  1  Conn.  R.,  867. 

4  Cayuga  Co.  Bank  v.  Hunt,  2  Hill.  635.  In  Ohio  it  has  been  held  that  the 
makers  of  a  joint  and  several  promissory  note  are  to  be  considered  quoad 
hoc  partners,  so  that  a  demand  on  one  of  them  is  sufficient.  Harris  v.  Clark, 
10  Ohio,  5. 

6  Philpot  v.  Bryant,  3  Carr.  and  P.,  244-  1  Moore  and  P..  754;  4  Bing.,  717. 

6  Woodworth  v.  Bank  of  America,  19  John.  R.,  391 ;  24  Wend.,  374. 

7  See  cases  cited  and  commented  on  by  Ch.  J.  Spencer,  in  Bank  of  America 
v.  Woodworth,  18  John.  R.,  316.     It  is  a  question  of  fact  whether  it  be  only  a 
private  memorandum,  or  an  actual  alteration  of  the  note.    24  Wend.,  374. 


PRESENTMENT    FOR    PAYMENT.  501 

memorandum,  made  merely  as  information  to  the  bolder,  is  no 
more  an  alteration  of  the  instrument,  than  the  acceptance  of 
a  bill  making  it  payable  at  a  bank  is  a  special  acceptance. 
But  we  have  seen  that  an  acceptance  of  a  bill  making  it 
payable  in  a  distant  place,  is  a  special  acceptance,  because  it 
postpones  the  time  within  which  the  drawer  or  indorser  is 
entitled  to  be  notified  in  case  of  dishonor :  i"  and  on  the  same 
ground,  it  is  clear  that  the  maker  of  the  note  cannot  in  any 
manner  appoint  a  distant  place  of  payment,  without  the  con- 
sent of  the  indorser,  that  will  or  may  postpone  the  time  within 
which  the  indorser  has  a  right  to  know  whether  or  not  the 
note  has  been  paid.  2  Neither  has  the  payee  a  right  to  add  to 
the  note  a  memorandum  specifying  the  place  of  payment, 
without  having  the  assent  of  the  makers  to  the  alteration ;  for 
although  it  is  not  necessary  in  an  action  against  the  maker  to 
allege  a  presentment  for  payment  at  the  place  specified,  the 

1  Rowe  v.  Young,  2  Brod.  and  Bingh.,  165;  Wallace  v.  McConnell,  13  Peters, 
136,  and  authorities  there  cited. 
1 19  John.  R.,  391. 

Williams  v.  Waring,  10  Barn,  and  Cress.,  2,  was  an  action  of  assumpsit  on 
a  promissory  note  by  the  indorsee  against  the  maker.  The  note  was  drawn  as 
follows  :  *'  31st  January,  1827.  Two  months  after  date,  I  promise  to  pay  A. 
B.  25/,  value  received.  J.  Waring.  At  Messrs.  B.  &  Go's  Bankers,  London." 
On  the  ti  ial  the  objection  was  raised  by  counsel  for  defendant  that  the  decla- 
ration should  have  described  the  note  as  payable  at  Messrs.  B.  &.  Go's.,  and 
should  have  alleged  or  proved  presentment  there  for  payment.  Lord  Tenter- 
den  :  "  In  point  of  practice,  the  distinction  between  mentioning  a  particular 
place  for  payment  of  a  note,  in  the  body  and  in  the  margin  of  the  instrument, 
has  been  frequently  acted  on.  In  the  latter  case  it  has  been  treated  as  a 
memorandum  only,  and  not  as  a  part  of  the  contract ;  and  I  do  not  sec  any 
sufficient  reason  for  departing  from  that  course." 

Exon  v.  Russell,  4  Maule  and  Selw.,  605.  A  memorandum  made  at  the 
foot  of  the  note,  such  as  this,  "  at  Messrs.  B.  G.  and  Go's,  bankers,  London,  is 
no  part  of  the  instrument;  and  hence  it  is  a  misdescription  to  describe  the 
note  as  if  that  formed  a  part  of  the  note. 

Tuckerman  v.  Hartwell,  3  Greenl.,  147.  If  the  place  of  payment  is  desig- 
nated in  a  memorandum  at  the  bottom,  or  if  to  the  acceptance  of  a  bill  is 
added  a  particular  place  of  payment,  with  the  assent  of  the  holder;  such 
memorandum  or  qualification  is  part  of  the  contract.  And  if  only  the  name 
of  the  place  be  written  at  the  bottom  of  the  note  or  of  the  acceptance,  it  is 
for  the  jury  to  determine  when,  by  whom,  and  for  what  purpose  it  was  placed 
there.  What  is  a  material  alteration  ?  See  Chappell  v.  Spencer,  23  Barb., 


502  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

inserting  of  a  place  of  payment  clearly  affects  the  contract, 
by  restricting  or  limiting  the  place  at  which  the  maker  is  at 
liberty  to  make  a  tender  of  payment,  i 

The  result  of  the  authorities  appears  to  be  this :  if  a  note 
is  drawn  payable  generally,  and  the  holder  or  payee  or  maker 
inserts  a  place  of  payment  so  as  to  make  it  a  part  of  the  con- 
tract, the  alteration  is  material;  and  if  done  after  indorsement 
without  consent  of  the  indorser,  it  will  discharge  the  latter;  2 
while  a  memorandum  written  subsequently  to  the  indorse- 
ment, at  the  bottom  of  the  note,  forming  no  part  of  the  con- 
tract, but  naming  a  place  of  payment,  affects  no  one  but  the 
party  making  it;  3  and  is  not  a  stipulation  that  enters  into  the 
agreement  made  by  the  pther  parties  to  the  instrument.  As 
an  appointment  of  the  place  of  payment,  it  binds  the  maker 
when  made  by  him;  just  as  an  acceptance  payable  at  a  bank, 
renders  a  presentment  at  the  bank  sufficient.  4 

An  unauthorized  alteration  of  a  general  acceptance  of  a 
bill  by  the  addition  of  a  place  of  payment,  discharges  the 
acceptor,  even  as  against  a  bona  fide  holder,  subsequently 
taking  the  bill  for  value  and  without  notice  of  the  alteration :  5 
so  held  in  England,  notwithstanding  the  statute  before  refered 
to  making  all  acceptances  general,  unless  otherwise  specially 
expressed.  6 

As  between  the  maker  and  payee  of  a  promissory  note,  a 
memorandum  written  at  the  bottom  on  the  face  of  the  note, 
after  it  has  been  signed,  but  before  its  delivery,  is  to  be  con- 
sidered as  a  part  of  the  contract,  in  the  same  manner  as  if  it 
had  been  included  in  the  body  of  the  note,  or  written  over 

1  Nazro  v.  Fuller,  24  Wend.,  374. 

*  Rowe  v.  Young,  supra;  Bank  of  America  v.  Woodworth,  18  John.  R.3 
316;  and  19  id.  391 ;  and  24  Wend.,  374;  10  Barn,  and  Cress.,  2;  4  Maule  and 
Sel.,  505;  quere,  by  adding  a  new  maker  to  a  note,  23  Barb.,  584. 

8  Saunderson  v.  Judge,  2  H.  Bl.,  509;  4  Campb.,  N.  P.,  200;  3  Esp.,  57;  7 
East,  385. 

*  Treacher  v.  Hinton,  4  Barn,  and  Aid.,  413. 

'  Birehfleld  v.  Moore,  3  Ellis  and  Blackburn's  R.   683,  decided  in  1854. 

*  Cowie  v.  Halsall,  4  Barn,  and  Aid.,  197,  decided  before  the  statute  was 
passed;  and  M'Intosh  v.  Haydon    1  Ry.  and   Mood.,  362,  and  Taylor  v. 
Moseley,  6  Carr.  and  Payne,  273;  and  Birchfield  v.  Moore,  supra,  decided  aftar 
the  act;  see  Gardiner  v.  "Walsh,  33  Eng.  law  and  Eq.  R.,  162. 


PRESENTMENT    FOR   PAYMENT.  503 

the  maker's  signature;  i  and  there  is  no  reason  why  a  person 
who  afterwards  indorses  the  note,  should  not  be  held  responsi- 
ble thereon  according  to  the  terms  of  the  instrument.  2 

Mode  of  presentment.  The  mode  of  presenting  bills  and 
notes  for  payment  has  already  been  considered,  in  respect  to 
the  degree  of  diligence  required  in  finding  the  maker  or 
acceptor,  and  what  is  deemed  in  law  equivalent  to  a  demand 
in  certain  cases.  It  remains  for  us  now  to  consider  the  man- 
ner of  presenting  and  demanding  payment  where  th'ere  are  no 
special  circumstances  qualifying  the  duty  of  the  holder. 

In  the  first  place,  then,  the  demand  may  be  made  upon  the 
maker  or  acceptor  personally;  but  must  be  made  at  a  reason- 
able time  and  place.  A  demand  in  the  street  is  not  sufficient, 
unless  the  party  on  whom  it  is  made  declines  wholly  to  pay, 
or  offers  something  which  is  not  a  payment  and  does  not 
object  to  the  place  on  the  ground  that  he  is  not  there  ready 
to  pay.  3  The  presumption  always  is  that  the  maker  or 
acceptor  is  prepared  to  pay  at  his  residence  or  place  of  busi- 
ness^ and  if  the  notary  meets  him  in  the  street  and  presents 
the  bill  or  note  for  payment,  and  he  offers  to  pay  at  his  place 
of  business,  or  at  his  residence,  the  notary  is  bound  to  give 
him  an  opportunity  to  do  so.  5 

1  Hay  wood  v.  Perria,  10  Pick.,  228. 

*  Tappan  T.  Ely,  15  Wend.,  862 j  8  John.  R.,  485. 
1  King  v.  Holmes.  11  Penn.  State  R.,  456. 

4  The  Branch  Bank  of  Decatur  v.  Hodges,  18  Ala.  N .  S.  R.,  42,  decided  in  1849. 

*  King  v.  Holmes,  supra;  M'Gurder  v.  Bank  of  Washington,  9  Wheat., 
598.    This  case  decides  that  a  removal  into  another  state  or  jurisdiction 
excuses  a  failure  to  make  an  actual  demand  of  payment  on  the  maker  of  a 
note.    "  A  demand  on  the  maker  is  in  general  indispensable;  and  that  demand 
must  be  made  at  his  place  of  abode  or  place  of  business.    That  it  should  bo 
strictly  per  tonal,  in  the  language  of  the  submission,  is  not  required;  it  is 
enough  if  it  be  at  his  place  of  abode,  or  generally,  at  the  place  where  he 
ought  to  be  found."     Decided  in  1824. 

Louisiana  Ins.  Co.  v.  Shamburgh,  2  Martin's  R.  N.  S.,  511.  This  case  de- 
cides that  when  the  maker  of  a  note  cannot  be  found,  payment  must  be  de- 
manded at  his  domicil  if  within  the  state.  It  was  a  case  of  removal  from 
New  Orleans  to  Plaquemine,  in  the  same  state,  and  the  omission  to  present 
the  note  for  payment  was  not  sufficiently  excused  by  shewing  diligence 

Bellevre  v.  Bird,  4  id.  186,  is  a  similar  case;  the  maker  had  removed  from 
Baton  Rouge  to  New  Orleans,  and  a  sufficient  search,  that  is,  due  diligence 
was  not  used  by  the  notary  to  find  out  the  residence  of  the  maker  of  the  note. 


504  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

For  the  same  reason,  where  the  drawees  of  a  bill  of  exchange 
absent  themselves  from  their  place  of  business  and  make  no 
provision  for  its  payment,  a  presentment  there  to  a  clerk  or 
book-keeper  is  a  sufficient  presentment  to  charge  the  drawer 
and  indorsers.  i  The  undertaking  of  the  acceptor  is  to  pay 
the  bill  at  its  maturity,  on  due  presentment;  and  that,  as  we 
have  seen,  may  be  made  either  at  hJ3  place  of  business  or  at 
his  residence.  2  But  it  will  not  be  good  if  made  at  his  former 
place  of  residence,  or  at  a  store  formerly  occupied  by  him,  un- 
less there  are  other  circumstances  excusing  a  further  demand.  3 

In  the  next  place,  it  is  necessary  that  the  bill  or  note  should 
be  actually  presented  for  payment;  that  it  should  be  exhibited 
or  shewn  to  the  maker  or  acceptor,  and  payment  thereof  de- 
manded. A  demand  made  by  a  person  who  has  not  the  draft 
or  bill  in  his  possession,  is  insufficient.  4  A  request  of  pay- 
ment communicated  to  the  maker  of  a  promissory  note,  by 
letter  through  the  post  office,  is  not  such  a  demand  as  the  law 
requires :  the  holder  or  his  agent  should  call  on  the  maker 
and  present  the  note  and  demand  payment  of  it.  5  The  instru- 
ment itself  should  be  produced;  6  for  the  acceptor  has  a  right 
to  see  the  bill  before  he  determines  whether  he  will  pay  it  or 
not;  and  if  he  pays  it,  he  has  a  right  to  have  it  delivered  to 
him  as  a  voucher  in  his  settlement  with  the  drawer.  7  And 
for  the  same  reason,  the  maker  of  a  promissory  note  is  entitled 
to  have  it  surrendered  on  payment.  Being  negotiable  paper, 
neither  the  acceptor  nor  the  maker  is  bound  to  make  payment 
without  receiving  the  note  or  bill  as  his  voucher,  or  evidence 
that  it  is  not  outstanding  in  the  hands  of  some  other  person.  8 

1 18  Ala.  N.  S.  Rep.,  42. 

"Hoodie  v.  Morrall,  1  S.  Car.  R.,  367;  Shed  v.  Onett,  1  Pick.,  413. 

9  Freeman  v.  Boynton,  7  Mass.  R.,  483;  Bond  r.  Farnham,  5  Mass.  R.,  170. 
A  removal  out  of  the  country,  or  out  of  the  state,  itself  excuses  a  presentment 
and  demand.  9  Wheat.  R.,  598. 

*  Musson  v.  Lake,  4  How.  TJ.  S.  Rep.,  262. 

6  Stuckert  v.  Anderson,  3  Whart.,  116;  9  Wheat.,  598. 

*  Draper  v.  Clemens,  4  Miss.,  52. 

7  The  Bank  of  Vergennes  v.  Cameron,  7  Barb.  R.,  143,  per  Harris,  J. 

8  Smith  v.  Rockwell,  2  Hill  R.,  482.     The  indorser,  tendering  the  amount 
due  on  a  note,  has  a  right  to  insist  on  its  delivery  to  him.    Wilder  v.  Seelye, 
8  Berb.  R.,  408. 


PRESENTMENT    FOR    PAYMENT.  505 

Drafts  payable  at  sight  shew  on  their  face  that  they  are  to 
be  presented  for  payment.  When  the  cashier  of  a  bank  that 
had  received  a  draft  as  security  for  a  loan,  met  Chase,  one  of 
the  house  upon  which  the  bill  was  drawn,  and  informed  him 
that  the  bank  had  the  draft,  upon  which  Chase  told  him  that 
they  should  not  accept  or  pay  it,  the  question  arose  whether 
this  conversation  amounted  to  a  presentment  for  acceptance; 
and  the  court  say :  i  "  The  term  presentment  imports  not  a 
mere  notice  of  the  existence  of  a  draft  which  the  party  has  in 
his  possession,  but  the  exhibiting  of  it  to  the  person  on  whom 
it  is  drawn,  that  he  may  see  the  same,  and  examine  his 
accounts  or  correspondence,  and  judge  what  he  shall  do; 
whether  he  shall  accept  the  draft  or  not.  Here  there  appears 
to  have  been  nothing  more  than  a  casual  meeting  of  the  par- 
ties, and  the  conversation  on  the  subject  of  the  draft  ensued. 
If  this  had  been  communicated,  it  would  have  created  no 
obligation  on  the  part  of  the  indorser  to  make  present  pay- 
ment, and  consequently  such  conversation  imposed  no  present 
duty  on  the  holders,  as  to  the  other  parties  to  the  bill."  These 
remarks  were  made  in  an  action  brought  on  a  bill  payable  six 
months  after  date,  where  it  was  not  the  duty  of  the  holder  to 
present  the  same  for  payment  until  it  became  payable. 

The  duty  of  the  holder  in  presenting  a  draft  for  acceptance, 
manifestly,  is  not  governed  by  rules  or  rather  circumstances 
so  urgent  as  those  that  attend  the  presentment  and  demand 
for  payment :  2  in  the  former  case,  the  time  within  which  the 
act  may  be  done  is  not  precisely  fixed,  while  in  the  latter,  the 
day  of  payment  cannot  be  delayed,  nor  can  the  holder  in  any 
case  wait  till  the  following  day  to  find  the  acceptor  or  receive 

1  Fall  River  Union  Bank  v.  Willard,  5  Mete.,  216.  This  case  also  shews  that 
the  holder  is  at  liberty  to  agree  with  the  drawer  not  to  present  a  bill  payable 
a  certain  time  after  date,  until  it  becomes  due,  notwithstand:ng  the  same  has 
been  indorsed  for  the  accommodation  of  the  drawer.  He  has  a  right  to  omit 
presenting  it,  and  he  may  agree  to  do  so. 

1  Mr.  Justice  Story  intimates  an  opinion  that  this  distinction  is  founded 
more  in  courtesy  than  in  duty;  but  allows  that  in  practice  the  holder  baa 
greater  freedom,  in  calling  again  to  find  the  drawee  when  he  is  not  at  home, 
and  in  waiting  for  his  decision,  than  can  be  exercised  in  presenting  bills  and 
notes  for  payment.  Story  on  Bills,  §  350. 

30 


506  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

his  answer  to  the  bill,  as  he  may  do  when  he  merely  presents 
it  for  acceptance,  i  In  other  words,  the  holder  is  under  a 
necessity  of  presenting  the  bill  for  payment  on  the  very  day 
it  becomes  due,  if  he  wishes  to  charge  the  drawer  and  indor- 
sersj  and  is  not  at  liberty  to  leave  the  bill  with  the  drawee 
on  the  day  it  becomes  due,  until  the  following  day,  before 
protesting  it  for  non-payment,  notwithstanding  it  has  not  been 
previously  presented  for  acceptance.  2 

According  to  Mr.  Chitty,  the  bill  or  note  should  not  be  left 
in  the  hands  of  the  drawee  or  maker  without  immediate  actual 
payment  in  money;  at  least  if  it  be,  the  presentment  is  not 
considered  as  made  until  the  money  is  called  for ;  3  and  though 
it  has  been  decided  that  neither  the  holder  nor  a  banker, 
acting  as  agent,  is  guilty  of  neglect  by  giving  up  a  bill  to  the 
acceptor  upon  his  delivering  to  them  his  check  on  another 
banker, 4  that  doctrine  may  now  be  questionable;  and  he  adds, 
that  most  of  the  London  bankers,  on  presenting  a  bill  for  pay- 
ment in  the  morning  leave  a  ticket  where  it  lies  due,  declaring 
that  "  in  consequence  of  great  injury  having  arisen  from  the 
non-payment  of  drafts  taken  for  bills,  no  draft  can  in  future 
be  received  for  bills,  but  that  the  parties  may  address  them 
for  payment  to  their  bankers,  or  attach  a  draft  to  the  bill  when 
presented."  5 

Receiving  a  check  on  a  bank  in  payment  of  a  draft  or  note, 
would  not  extinguish  the  latter,  in  the  absence  of  any  inten- 
tion to  give  the  maker  or  acceptor  a  further  credit;  6  but  a 
surrender  of  the  note  or  bill  would  embarrass  the  holder  in 
his  attempt  to  recover  on  the  instrument,  7  and  a  delay  to 

1  Bank  of  Washington  v.  Trlplett,  1  Peters  R.,  25,-  Mitchell  v.  Degrand,  1 
Mason  R.,  176. 

8  Montgomery  Co.  Bank  v.  Albany  City  Bank  and  The  Bank  of  the  State  of 
New-York,  8  Barb.  R.,  396;  S.  C.,  3  Selden  R.,  459. 

*  Hayward  v.  Bank  of  England,  1  Stra  ,  550. 

4  Russell  v.  Hankey,  6  Terra  R.,  13.  The  practice  of  notaries  in  New-York 
is  to  take  nothing  in  payment  of  bills  or  notes  but  money  or  a  certified  check. 

6  Chitty  on  Bills.  369. 

«  The  People  v.  Howell,  4  John.  R.,  296;  5  John.  R.,  68;  Olcott  v.  Rath- 
bone,  5  Wend.,  490. 

1  2  Hill  R.,  482;  7  Barb  ,  143. 


PRESENTMENT    FOR    PAYMENT.  507 

protest  the  same  for  non-payment  on  the  day  it  became  pay- 
able would  discharge  the  drawer  and  indorsers.  i  Hence  it  is 
evident  that  the  notary  or  agent  for  collection,  cannot  with 
safety  surrender  the  note  or  draft  on  receiving  a  check  for  the 
amount;  and  that  if  he  does  so,  he  ought  to  ascertain  promptly 
whether  the  check  will  be  honored,  so  that  in  case  it  is  not  he 
may  nevertheless  protest  the  note  or  draft  for  non-payment, 
and  give  regular  notice  of  its  dishonor  to  the  parties  to  be 
charged  thereon. 

The  form  of  the  notarial  certificate  shews  sufficiently  the 
manner  in  which  the  presentment  and  demand  for  payment 
should  be  made.  2  But  though  the  rule  be  general,  requiring 
that  a  promissory  note,  a  draft  or  bill  of  exchange  be  exhibited 
to  the  maker  or  acceptor  when  the  demand  of  payment  is 
made,  there  are  exceptions  to  the  rule,  some  of  which  we  have 
already  noticed,  3  and  others  that  deserve  to  be  mentioned. 
Thus,  where  the  maker  of  a  promissory  note  went  to  the  store 
of  the  holder  on  the  last  day  of  grace,  where  the  note  was, 
and  stated  that  he  was  unable  to  pay,  and  should  not  pay  the 
note,  and  wished  the  holder  to  notify  the  indorser;  the  court 
were  of  opinion  that  this  was  a  sufficient  demand  and  refusal 
to  constitute  a  dishonor  of  the  note.  4  To  render  the  demand 
good,  the  party  making  it  should  have  the  note  with  him;  and 
the  demand  ought  to  be  so  made  that  this  fact  should  appear :  5 
otherwise  the  maker  may  well  refuse  to  pay,  on  the  ground 
that  he  has  a  right  to  have  his  obligation  or  note,  or  to  see  it 
cancelled,  when  he  is  called  upon  to  discharge  it.  6 

The*  possession  of  the  note  is  evidence  that  the  person 
making  the  demand,  is  authorized  to  receive  the  money  and 
deliver  up  the  note.  7  So,  if  payable  at  a  particular  place, 

1  3  Selden  R.,  459;  8  Barb.,  496. 

'  See  the  form  given  on  a  former  page,  shewing  that  the  note  or  bill  must  be 
exhibited,  and  Story  on  Bills,  §  276,  and  note. 

1  See  authorities  cited,  supra,  in  reference  to  demand  where  notes  or  bills 
are  made  payable  at  particular  places. 

4  Gilbert  v.  Dennis,  3  Metcalf,  495;  Belmont  Bank  v.  Patterson,  17  Ohio,  78. 

*  Freeman  v.  Boynton,  7  Mass.,  483. 

4  Idem,  per  Parker,  J. 

••  Shed  v.  Brett,  1  Pick.,  401. 


BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

the  note  must  be  left  or  sent  there,  ready  to  be  surrendered 
up  on  payment,  i 

When  a  note  or  bill  has  been  lost,  the  presentment  may  be 
made  by  copy,  or  by  a  statement  in  writing  describing  the 
instrument;  2  but  the  demand  of  payment  should  be  accom- 
panied by  a  sufficient  tender  of  indemnity  against  any  future 
liability  thereon,  so  as  to  render  the  maker  safe  in  paying  it.  3 
In  due  form,  the  holder  should  present  a  copy  or  description 
of  the  lost  instrument,  proof  of  the  loss,  and  an  ample  indem- 
nity, to  the  maker  or  acceptor  in  place  of  the  note  or  bill,  and 
demand  payment  thereof:  in  short,  he  should  do  all  that  he 
would  be  bound  to  do,  in  order  to  recover  on  the  same  in  an 
action  at  law  or  in  equity;  4  and  a  tender  of  indemnity  should 
also  be  made  to  the  indorser  at  the  same  time,  so  that  he  may 
be  in  a  situation  to  pay  the  demand  at  any  time,  and  look  to 
the  principal  debtor.  5 

Where  there  is  a  local  custom  or  usage  of  business,  the 
parties  entering  into  a  contract  to  be  performed  where  the 
custom  prevails,  are  supposed  to  make  their  agreement  with 
reference  to  it;  so  that,  in  substance,  where  the  terms  used  do 
not  negative  that  intention,  the  usage  being  known  to  the 
parties,  is  incorporated  into  and  made  a  part  of  the  contract 
between  them.  <j  Upon  this  ground  a  usage  of  banks  has  been 
sanctioned  judicially  in  Massachusetts  and  some  of  the  other 
states  of  the  union,  dispensing  with  the  necessity  of  formally 
presenting  inland  bills  and  notes  for  payment.  7  The  usage 
appears  to  be  this :  when  the  note  or  bill  is  about  to  become 
payable,  a  messenger  of  the  bank  holding  it,  or  in  whfch  it  is 
deposited  for  collection,  delivers  a  notice  to  the  maker  or 

1  Shaw  v.  Reed,  12  Pick.,  132. 

s  Hinsdale  v.  Miles,  6  Conn.  R.,  331;  Posey  &  Coffee  v.  The  Decatur  Bank, 
18  Ala.  N.  S.  R.,  802. 

8  Smith  v.  Rockwell,  2  Hill  R.,  482;  7  Barn,  and  Cress.,  90;  3  Cowen  R., 
303;  7  Mass.,  486. 

4  18  Ala.  N.  S.  R.,  802;  5  Conn.  R.,  331;  2  Hill  R.,  482. 

6  Smith  v.  Rockwell,  2  Hill  R.,  482. 

6  4  Term  R.,  681;  3  Comst.  R.,  322;  6  Hill  R.,  157. 

7  4  Mass. ,245;  6  Mass.,  449;  Whitwell  v.  Johnson.  17  Mass.,  449;  Shove 
v.  Wiley.  18  Pick.,  558;  North  Bank  v.  Abbott,  13  Pick.,  465;  Central  Bank 
v.  Davis,  19  Pick.,  373;  Maine  Bank  r.  Smith,  18  Maine,  99. 


PRESENTMENT    FOR   PAYMENT.  509 

acceptor,  or  leaves  it  for  him  at  his  place  of  business,  stating 
the  bank  where  the  note  or  bill  is  to  be  found,  naming  the 
day  on  which  it  will  become  payable,  and  requesting  payment 
accordingly;  and  in  case  he  fails  to  come  to  the  bank  and  pay 
the  bill  or  note  within  the  usual  hours  of  business  on  the  day 
named,  that  being  the  last  day  of  grace,  a  mere  notice  is  then 
sent  to  the  makers  and  indorsers  of  non-payment,  and  the 
paper  is  considered  dishonored,  i  But  this  species  of  demand 
is  allowed  only  where  the  party  bound  to  pay  has  knowledge 
of  the  custom,  and  is  recognized  as  valid  upon  the  ground 
that  he  in  fact  assents  to  this  qualified  mode  of  demand.  In 
other  words,  such  previous  notice  to  the  promisor,  and  neglect 
on  his  part  to  pay  the  note  at  the  bank,  are  a  conventional 
demand  and  refusal,  amounting  to  a  dishonor  of  the  note  :  it 
is  not  the  delivery  of  the  previous  notice  to  the  promisor, 
which  constitutes  the  presentment,  nor  would  an  actual  pre- 
sentment, demand  and  refusal,  before  the  last  day  of  grace, 
constitute  such  default  of  the  promisor,  as  to  be  a  dishonor  of 
the  note.  It  is  the  failure  to  pay  at  the  bank  during  bank 
hours,  on  the  last  day  of  grace,  which  completes  the  dishonor; 
and,  it  is  conceded,  the  custom  does  not  accelerate  nor  alter 
the  day  of  payment.  2 

1  The  Boston  Bank  v.  Hodges,  9  Pick.,  420;  Maine  Bank  v.  Smith,  18  Maine 
R.,  99.  "  A  written  notice,  demanding  payment  of  the  two  first  notes  named, 
was  sent  at  the  proper  time,  to  the  dwelling  house  of  the  maker,  but  the  notes 
remained  in  the  bank.  The  residence  of  the  maker  was  in  the  city.  The 
plaint  ill's  were  permitted  to  introduce  evidence,  that  such  was  the  invariable 
usage  of  the  bank,  respecting  inland  bills  and  notes;  and  that  the  maker  and 
defendant  had  done  business  at  the  bank;"  and  it  was  held  that  the  evidence 
was  proper,  and  that  the  usage  being  proved  the  demand  was  proper. 

Contra.  Bank  of  Maryland  v.  Duvall,  7  Gill,  and  John.,  78.  The  liability 
of  the  indorser  of  a  note  is  contingent,  and  depends  upon  a  demand  of  pay- 
ment being  made  upon  the  maker,  and  due  notification  to  the  indorser  of  the 
dishonor  of  the  note.  On  the  failure  of  either,  no  recovery  can  be  had  against 
him.  The  demand  should  be  made  on  the  last  day  of  grace,  and  if  made  at 
any  time  before  it  will  be  fruitless:  and  a  demand  of  payment  without  the 
presentation  of  the  note,  would  in  general  be  equivalent  to  no  demand;  and 
when  it  is  made  the  holder  or  agent  should  be  prepared  and  ready  to  pro- 
duce it. 

8  Mechanics'  Bank  at  Baltimore  v.  Merchants'  Bank  at  Boston,  G  Mete.,  13, 
per  Ch.  J.  Shaw. 


510  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

The  effect  of  this  custom,  where  the  indorser  does  not  know 
of  its  existence,  is  to  convert  a  note  payable  at  large  into  a 
debt  payable  at  a  particular  place,  and  it  is  not  easy  to 
perceive  upon  what  principle  it  can  be  defended.  An  incor- 
porated bank,  though  a  creation  of  the  legislature,  is  only  a 
person,  entitled  to  transact  banking  business;  and  a  custom 
of  banks  is  entitled  to  no  more  respect  in  the  eye  of  the  law 
than  a  custom  established  among  grocers  or  dealers  in  stocks.  1 
And  it  is  well  settled  that  a  usage  cannot  be  shewn  to  control 
or  subvert  the  acknowledged  law  of  the  land.  2  The  objec- 
tion to  the  custom  is  still  stronger  where  an  individual  bank 
is  allowed  to  shew  its  own  usage,  by  way  of  substituting 
something  else  in  place  of  the  presentment  and  demand 
required  by  law;  because  it  operates  to  permit  one  person  to 
establish  a  custom  overriding  a  rule  of  law;  a  privilege 
not  granted  to  a  private  individual.  3  And  clearly,  as  a 
matter  of  contract,  it  can  hardly  be  maintained  that  the 
indorser  of  a  note  payable  generally,  waives  his  right  to  insist 
upon  a  legal  presentment  and  demand,  in  case  the  note  hap- 
pens to  come  into  the  possession  of  a  bank  having  a  special 
custom;  for  this  would  be  equivalent  to  saying,  that  his  con- 
tract is  one  thing  in  the  hands  of  a  bank  and  another  in  the 
hands  of  a  private  person. 

When  a  note  or  bill  is  made  and  indorsed  payable  at  a 
particular  bank,  it  is  reasonable  to  presume  that  the  parties 
contract  with  reference  to  its  mode  of  doing  business,  and 
thus  make  it  the  law  of  the  contract :  4  and  so  where  a  nego- 

1  Allen  v.  Dykers,  3  Hill  R.,  593;  S.  C.,  7  id.  497;  Hinton  v  Locke,  5  Hill, 
437;  2  Sand.,  89,  127;  14  John.  R.,  316. 

*  Eddie  v.  The  East  India  Co.,  2  Burr,  1216;  Woodruff  v.  The  Merchants' 
Bank  of  the  city  of  N.  Y.,  25  Wend.,  673;  S.  C.,  6  Hill  R.,  174;  13  John.  R., 
40;  16  id.  367. 

»  Whitwell  v.  Johnson,  18  Mass.,  449;  18  Maine  R.,  99. 

4  Parker  v.  Gordon,  7  East,  385;  5  Smith,  358;   S.  C.,  and  other  cases,  • 
shewing  that  such  a  bill  or  note  should  be  presented  during  the  usual  hours  of 
business,  within  banking  hours. 

Mills  v.  Bank  of  the  United  States,  11  Wheat.,  431.  '•'  It  has  been  decided 
by  this  court,  upon  full  consideration  and  argument  in  the  case  of  Rentier  v. 
The  Bank  of  Columbia,  (9  Wheat.,  582,)  that  where  a  note  is  made  for  the 
purpose  of  being  negotiated  at  a  bank,  whose  custom,  known  to  the  parties,  it 


PRESENTMENT    FOR   PAYMENT.  511 

liable  note  is  made  payable  in  a  particular  city,  where  it  is 
an  established  custom  of  all  the  banks  to  do  business  in  a 
particular  manner,  the  parties  to  it  are  fairly  chargeable  \vith 
knowledge  of  a  usage  so  general  in  its  character. 

Time  of  presentment  and  demand.  For  the  purpose  of  charg- 
ing the  drawer  and  indorser,  the  rule  is  that  bills  and  notes 
should  be  presented  and  payment  thereof  demanded  on  the 
very  day  they  become  payable,  where  that  is  rendered  certain 
by  the  terms  of  the  instrument  as  modified  by  the  law  or  cus- 
tom of  merchants.  The  time  can  neither  be  hastened  nor 
delayed  a  single  day.  i 

1  Farmers'  Bank  v.  Duvall,  7  Gill,  and  John.  R.,  78;  6  Metcalf,  13. 


is  to  demand  payment  and  give  notice  on  the  fourth  day  of  grace,  that  custom 
forms  a  part  of  the  law  of  such  contract,  at  least  so  far  as  to  bind  their  rights. 
In  the  present  case,  the  court  is  called  upon  to  take  one  step  farther;  and 
upon  the  principles  and  reasoning  of  the  former  case,  it  has  come  to  the  con- 
clusion that  when-a  note  is  made  payable  or  negotiable  at  a  bank,  whose  inva- 
riable usage  it  is  to  demand  payment,  and  give  notice  on  the  fourth  day  of 
grace,  the  parties  are  bound  by  that  usage,  whether  they  have  a  personal 
knowledge  of  it  or  not.  In  the  case  of  such  a  note,  the  parties  are  presumed 
by  implication  to  be  governed  by  the  usage  of  the  bank  at  which  they  have 
chosen  to  make  the  security  itself  negotiable."  Decided  in  182ti;  opinion  de- 
livered by  Mr.  Justice  Story. 

Bridgeport  Bank  v.  Dyer,  19  Conn.  R.,  136.  A  usage  of  the  bank  to  send 
bills  and  checks  by  a  captain  of  a  steamboat  once  a  week  to  New-York,  for 
collection,  may  be  shewn  in  an  action  against  the  indorser  of  a  check,  by  way 
of  proving  diligence,  or  accounting  for  delay.  Such  usage,  known  to  the  par- 
ties, is  evidence  of  an  agreement  to  dispense  with  or  not  to  insist  upon  the 
usual  rule  of  law  regarding  the  transmission  of  checks.  Decided  in  1818. 

In  Adams  v.  Otterback,  15  How.  U.  S.  R..  589,  the  question  arose  whether 
a  demand  of  payment  could  be  postponed  till  the  fifth  day  after  it  became  due, 
by  shewing  a  custom  of  two  years  standing  established  by  the  bank,  it  being  a 
change  from  a  former  custom,  and  that  oy  the  change,  if  the  fourth  day  of 
grace  happened  to  fall  on  Sunday  the  note  was  delivered  to  the  notary  to  de- 
mand payment  and  give  notice  on  Monday;  and  the  court  delivering  their 
opinion  say  :  "  To  constitute  a  usage,  it  must  apply  to  a  place,  rather  than  to 
a  particular  bank.  It  must  be  a  rule  of  all  the  banks  of  the  place,  or  it  cannot 
consistently  be  called  a  usage.  If  every  bank  could  establish  its  own  usage, 
the  confusion  and  uncertainty  would  greatly  exceed  any  local  convenience  re- 
sulting from  the  arrangement.  •  •  The  usage  is  not  proved  in  this  case." 
The  bill  had  been  discounted  by  the  bank,  and  a  distinction  was  taken  between 
this  and  former  cases. 


512  BILLS   OF  EXCHANGE   AND   PROMISSORY  NOTES. 

Notes  that  are  drawn  payable  on  demand,  or  that  specify" 
no  time  of  payment,  are  in  one  sense  due  immediately,  so  that 
the  statute  of  limitations  begins  to  run  against  them  from  the 
day  of  their  date,  i  But  in  order  to  charge  the  indorser  of  a 
note  payable  on  demand,  it  is  sufficient  if  the  demand  of  pay- 
ment be  made  within  a  reasonable  time.  2  And  where  bills 
or  notes  are  drawn  payable  so  many  days  or  months  after  sight, 
the  time  of  payment  is  fixed  by  the  act  of  presenting  the 
notes  and  of  accepting  the  bills;  and  the  rule  of  law  is  satis- 
fied if  the  presentment  be  made  within  a  reasonable  time.  3 

To  determine  with  accuracy  the  time  when  a  note  or  bill 
becomes  payable,  it  is  necessary  first  to  ascertain  the  rules  of 
computation — the  legal  principles  upon  which  time  is  calcu- 
lated. On  checks  and  notes  and  drafts  payable  on  demand, 
ordinarily  no  question  can  arise;  they  are  payable  on  demand, 
strictly  according  to  the  terms  of  the  instrument.  4  But  when 
a  bank  check  is  post-dated  on  a  Sunday,  or  a  note  or  other 
contract  not  entitled  to  days  of  grace  falls  due  on  Sunday, 
that  day  is  excluded  from  the  calculation  and  considered  as 
stricken  from  the  calendar;  5  and  the  party  bound  has  the 
Monday  following  to  make  his  payment  in,  or  perform  his 
engagement.  So,  in  computing  the  time  allowed  for  pleading 
and  other  matters  of  practice,  under  the  rules  of  court,  it  is 
well  settled  that  when  the  last  day  falls  on  Sunday  the  party 
has  the  whole  of  the  next  day  in  which  to  perform  the  act 
required.  6  But  in  computing  the  time  allowed  for  pleading, 
or  the  time  mentioned  in  a  contract  for  the  doing  of  an  act, 

1  Wenman  Y.  The  Mohawk  Ins.  Co.,  13  Wend  ,  267.  The  rule  is  different 
where  a  note  is  payable  a  certain  time  after  demand.  Cornell  v.  Moulton,  3 
Denio  R.,  12;  Norton  v.  Ellam,  2  Mees.  and  "Wels.,  461;  Thompson  v.  Ket- 
chum,  8  John.  K.,  190,  374. 

a  1  Cowen  R.,  397;  3  "Wend.,  75.  What  is  reasonable  time,  has  been  con- 
sidered in  a  former  place. 

*  20  John.  R.,  146,  176;  7  Cowen  R.,  705. 

4  Woodruff  v.  Merchants'  Bank,  &c.  25  Wend., -673;  Moyser  v.  WhStall,  9 
Barn,  and  Cress.  409;  20  Wend.,  205;  2  Conn.  R..  69;  10  Ohio,  426;  1  Met- 
calf,  47. 

6  Avery  v.  Stewart,  2  Conn.  R.,  69;  Salter  T.  Burt,  20  Wend.,  205. 

6  5  Wend.,  84;  1  Stra.,  86;  6  John.  R.,  326;  2  Hill  R.,  377,  note  b;  Code 
of  Procedure,  §  407,  and  notes  to  Yoorhies'  second  edition,  419. 


PRESENTMENT   FOB   PAYMENT.  513 

intervening;  Sundays  are  to  be  counted  like  other  days;  i  except 
in  cases  where  the  evident  intention  is  to  give  business  time.  2 
The  period  of  a  year  is  a  determinate  space  of  time,  con- 
sisting of  three  hundred  and  sixty-five  days;  the  added  day 
of  a  bissextile  or  leap  year  and  the  day  immediately  preceding 
being  counted  together  as  one  day.  3  But  at  common  law  the 
period  of  a  month  was  reckoned  in  two  ways;  either  as  a 
lunar  month,  consisting  of  twenty-eight  days,  or  as  a  calendar 
month;  -and  in  general,  when  the  term  occurred  in  deeds  or 
statutes,  it  was  formerly  construed  to  mean  a  lunar  month,  or 
twenty-eight  days,  unless  otherwise  expressed.  4  But  in  the 
case  of  bills  of  exchange,  promissory  notes  and  other  mercan- 
tile contracts,  a  month  is  always  a  calendar  month;  so  that  if 
a  bill  or  note  is  dated  on  the  tenth  of  January,  and  made  pay- 
able one  month  after  date,  it  is  due,  the  three  days  of  grace 
being  included,  on  the  thirteenth  of  February.  5  In  this  state, 
the  computation  of  time  is  regulated  in  all  cases  by  statute, 
and  the  term  "  month,"  is  declared  to  mean  a  calendar  month, 
when  used  in  deeds,  statutes  or  contracts;  6  though  for  the 
purpose  of  calculating  interest,  a  month  is  considered  the 
twelfth  part  of  a  year,  and  as  consisting  of  thirty  days.  7 

The  difference  between  the  old  and  the  new  style  in  the 
computation  of  time,  which  is  now  twelve  days,  requires  to 
be  noticed,  s  Upon  a  bill  drawn  at  a  place  using  one  style, 
and  payable  at  a  place  using  the  other,  if  the  time  is  to  be 
reckoned  from  the  date,  it  is  computed  according  to  the  style 
of  the  place  at  which  it  was  drawn;  otherwise  according  to 
the  style  of  the  place  where  it  is  payable :  in  the  former  case, 
the  date  must  be  reduced  or  carried  forward  to  the  style  of  the 
place  where  the  bill  is  payable,  and  the  time  reckoned  from 

1  20  Wend.,  207. 
•Anon.  2  Hill  R.,  376. 

•  21  Henry  8;  1  R.  S.f  of  New-York,  774.  3d  ed. 
4  2  Bla.  Com.,  141 ;  6  Term  R.   224. 

•  4  Term  R.,  148;  Cockell  v.  Gray,  3  Brod.  and  B.,  187. 
•1  R.S.,774,  3d  ed. 

f  2  R.  S.,  58,  3d  ed. 

•  Story  on  Bills,  §  331. 


614  BILLS   OF  EXCHANGE  AND  PROMISSORY 

thence,  1  In  other  words,  when  a  bill  is  drawn  in  a  country 
using  the  old  style,  say  at  St.  Petersburg,  on  a  country  using 
the  new,  payable  one  month  from  date,  the  time  is  to  be  cal- 
culated from  the  day  corresponding  with  the  date.  Thus,  on 
a  bill  dated  the  first  of  May,  old  style,  payable  here  two 
months  after  date,  the  time  must  be  computed  from  the  cor- 
responding day  of  May,  new  style,  namely,  thirteenth  May; 
and  on  a  bill  dated  May  first,  new  style,  payable  at  St.  Peters- 
burg, two  months  after  date,  from  the  corresponding-  day  of 
April,  old  style,  namely,  the  nineteenth  of  April,  2 

In  computing  ths  time  when  bills  and  notes  payable  a 
certain  number  of  days,  months  or  years  after  date,  become 
due,  the  rule  is  to  exclude  the  day  of  the  date  from  the 
calculation;  and  include  the  day  of  payment,  assuming  that 
no  days  of  grace  are  allowed.  3  For  instance,  a  note  dated 
on  the  first  of  January,  payable  ten  days  after  date,  becomes 
due  on  the  eleventh;  and  if  made  payable  one  year  from  date, 
it  becomes  due  on  the  same  day  of  the  month  in  the  year 
following;  and  if  entitled  to  days  of  grace,  these  are  to  be 
added  in  each  case  to  the  time  which  the  note  has  to  run.  4 
So,  when  a  bill  is  drawn  payable  ten  days  after  sight,  the  day 
oa  which  the  bill  is  accepted  is  excluded  from  the  computa- 

1  Bayley  on  Bills,  ch.  7,  §  1. 

8  Chitty  on  Bills,  370.  The  reduction  of  time  from  one  style  to  the  other  ia 
a  simple  matter,  that  requires  only  the  addition  of  twelve  days  to  the  time 
reckoned  by  the  old  style,  in  order  to  bring  it  to  the  corresponding  day  of  the 
new  style.  And  of  course  the  latter  is  brought  back  to  the  former  by  a  deduc- 
tion of  twelve  days.  See  the  article  Calendar,  2  Encyclopedia  Americana. 

3  Bellasis  v.  Hester,  Lord  Raym.,  280;  Campbell  v.  French,  6  Term  R., 
212;  Chitty  on  Bills,  370. 

4 Hartford  Bank  v.  Barry,  17  Mass.  R.,  94.  In  this  case  the  note  sued  on 
was  dated  May  20th,  1819,  and  payable  in  four  mouths  from  date  and  grace. 
Payment  was  demanded,  and  notice  of  non-payment  given  September  23d,  in 
the  same  year;  and  the  demand  and  notice  were  held  sufficient. 

Ripley  v.  Greenleaf,  2  Vermont  R.,  129.  This  was  an  action  against  the 
indorser  of  a  note  dated  August  25th,  1818,  payable  in  four  years  from  date, 
and  the  demand  of  payment  was  made  on  the  28th  of  August,  four  years 
after;  and  the  objection  being  taken  that  the  demand  should  have  been  made 
on  the  29th,  the  point  was  fully  considered  by  the  court,  and  the  demand  made 
on  the  28th  was  held  good.  The  four  years  expired  on  the  day  of  the  date, 
four  years  afterwards,  and  the  addition  of  the  three  days  of  grace  brings  it  to 
the  28th. 


PRESENTMENT    FOR   PAYMENT.  6 16 

tion;  and  adding  the  usual  days  of  grace,  payment  thereof 
may  be  demanded  on  the  thirteenth  day  after  the  acceptance : 
thus,  if  accepted  on  the  first  day  of  the  month,  the  ten  days 
expire  on  the  eleventh,  and  the  bill  by  the  addition  of  the 
days  of  grace  when  they  are  three  in  number,  becomes  due  on 
the  fourteenth;  which  is  the  thirteenth  day  after  the  accep- 
tance, i  And  when  a  bill  is  drawn  payable  so  many  months 
after  date  or  after  sight,  the  computation  is  made  by  the 
calendar,  and  without  counting  the  days  of  grace  the  bill  will 
become  due  on  the  day  of  the  month  corresponding  with  the 
day  of  the  date  or  acceptance;  that  is  to  say,  if  the  bill  be 
dated  or  accepted  on  the  tenth  of  the  month,  it  will  mature 
or  become  due  on  the  tenth.  Thus,  if  dated  or  accepted  on 
the  tenth  of  February,  payable  two  months  thereafter,  it  will 
become  due  on  the  tenth  of  April,  or  on  the  thirteenth  adding 
the  days  of  grace.  2 

But  when  a  bill  is  drawn  payable  one  month  after  date,  in  a 
month  longer  than  the  succeeding  one,  the  computation  is 
not  carried  into  the  third  month  :  for  instance,  on  a  bill  dated 
the  thirtieth  or  thirty-first  of  January,  and  payable  one  month 
after  date,  the  time  expires  on  the  last  day  of  February, 
whether  that  have  in  it  twenty-eight  or  twenty-nine  days. 
So,  if  dated  on  the  twenty-ninth,  or  thirtieth,  or  thirty-first 
of  August,  and  payable  six  months  after  date,  it  will  fall  due 
on  the  last  of  February,  and  including  days  of  grace,  on  the 
third  of  March.  3 

1  9  Henry  v.  Jones,  8  Mass.  R.,  458.  Per  Curiam  :  '*  Where  a  note  is  pay- 
able a  certain  number  of  days  from  the  date  or  from  the  day  of  the  date,  the 
day  of  the  date  is  to  be  excluded  from  the  computation.  In  the  cose  at  bar, 
the  note  was  made  payable  in  sixty  days,  without  adding,  as  is  customary, 
from  th«  date.  But  the  intention  is  apparent,  and  the  court  will  supply  tho 
omission."  In  this  state,  by  the  act  of  1867,  checks  and  drafts  on  banks  and 
bankers  are  payable  as  drawn,  without  any  days  of  grace. 

1  17  Mass.  R.,  94;  2  Verm.,  129. 

1  Wagner  and  another  v.  Kenner,  2  Robinson  Louis.  R.,  120.  This  action 
was  brought  against  the  defendant  as  indorser  of  a  promissory  note  dated  the 
31st  of  September,  1839,  payable  six  months  after  date,  and  protested  on  the 
3d  of  April,  1840;  and  the  only  question  made  in  the  case  was,  whether 
the  protest  was  made  in  time  T  Martin,  J.,  delivering  the  prevailing  opinion 
of  the  court,  says  :  <:  The  computation  of  bills  or  notes  drawn  one  or  more 


616  BILLS   OF  EXCHANGE  AND  PROMISSORY  NOTES. 

It  was  formerly  customary  to  draw  foreign  bills  of  exchange 
payable  at  one,  two  or  more  usances;  but  more  recently  the 
practice  has  become  general  to  make  them  payable  at  so  many 
months  or  days  after  date  or  sight,  as  in  the  case  of  inland 
bills,  i  The  term  usance  designates  the  time  which  is  allowed 
by  the  usage  or  custom  of  countries  between  which  bills  are 
drawn,  for  their  payment;  and  though  sufficiently  definite,  is 
not  so  universally  understood  as  the  computation  of  time  by 
days  and  months.  Moreover,  bills  so  drawn  are  subject  to  this 
further  disadvantage;  the  usance  varies  between  diiferent 
places  and  countries,  so  that  the  contract  does  not  shew  upon 
its  face  when  it  falls  due.  In  other  words,  courts  cannot  take 
judicial  notice  of  foreign  usances  that  vary  according  to  the 
custom  of  business  established  between  diiferent  places;  and 
therefore  it  is  necessary  to  aver  and  prove  the  duration  of  the 
usance  at  which  the  bill  in  question  was  drawn  payable.  2 

1  Chitty  on  Bills,  370;  Byles  on  Bills,  160;  Bayley  on  Bills,  ch.  7,  §  1. 
a  Buckley  v.  Campbell,  Salk.,  131;  see  Smart  v.  Dean,  3  Keb.,  645. 


months  from  date  is  made  according  to  the  Gregorian  calendar,  that  is  to  say, 
from  the  day  of  the  month  it  bears  date,  to  the  corresponding  day  of  the 
month  of  its  maturity,  without  any  attention  to  long  and  short  months.  For 
instance,  a  note  drawn  on  the  28th,  29th,  80th,  or  31st  of  January,  and  due  a 
month  from  date,  will  be  due  the  28th  of  February,  if  the  year  be  not  bissex- 
tile, because  the  month  of  February  has  no  other  corresponding  day;  those 
drawn  on  the  28th  or  29th  of  February  and  due  one  month  Jfrom  date,  will  be 
due  on  the  28th  or  29th  of  March,  because  the  corresponding  days  are  found  in 
the  month  of  March.  A  bill  drawn  the  81st  of  March,  and  due  one  month 
from  date,  will  be  due  on  the  30th  of  April ;  and.  on  the  other  hand,  one  drawn 
on  the  30th  of  April,  will  be  payable  on  the  30th  of  May,  and  not  the  31st. 
This  mode  of  calculation  facilitates  greatly  the  ascertaining  of  the  day  of  the 
protest,  and  the  computation  of  interest.  It  is  extremely  simple.  *  *  * 
A  majority  of  the  court  concurring  in  this  opinion,  it  is  therefore  ordered  that 
the  judgment  of  the  lower  court  be  reversed,  and  that  there  be  judgment  for 
the  defendant."  The  judgment  of  the  court  proceeded  on  the  assumption  that 
the  note  was  dated  on  the  30th  or  last  day  of  September,  and  the  computation 
was  made  on  that  basis.  See  2  John.  R.,  203;  2  Ld.  Raym  ,  1079;  3  Cowen, 
252;  4  Mass.  R.,  53.  Blanchard  v.  Billiard,  11  Mass.,  88,  recognizes  the  usage 
of  a  bank  at  which  the  maker  and  indorser  were  accustomed  to  do  business, 
not  as  rules  for  the  decision  of  the  court,  but  as  evidence  of  their  assent  to 
the  usage,  and  the  notice  left  at  the  maker's  place  of  business  on  the  day  the 
note  became  due,  mentioning  the  third  day  of  grace  as  the  day  of  payment, 
was  held  sufficient. 


PRESENTMENT    FOR    PAYMENT.  517 

The  table  given  by  Mr.  Chitty,  copied  in  the  note  below, 
shews  how  much  diversity  in  this  respect  exists  in  the  usages 
and  course  of  trade  between  different  cities;  and  may  serve 
to  explain  the  superior  convenience  of  the  modern  practice,  i 

There  is  another  element  to  be  taken  into  account  in  the 
computation  of  the  time  when  bills  and  notes  become  due, 
known  as  days  of  grace.  At  an  early  period  these  were  in 
fact  what  the  words  imply,  an  indulgence  or  respite  granted 
to  the  acceptor  as  a  matter  of  favor;  2  but  they  have  at  length 
ripened  into  a  right  as  clear  and  definite  as  any  confered  by 
the  positive  stipulation  of  the  parties.  So  that  for  all  practi- 
cal purposes,  a  bill  or  note  entitled  to  days  of  grace  becomes 
due  at  the  same  time  and  in  the  same  manner  as  if  these 
days  were  added  to  the  time  it  has  to  run,  and  the  instrument 
drawn  without  grace.  3  The  code  Napoleon  abolishes  them 
altogether,  and  leaves  the  parties  to  fix  the  day  of  payment 
without  any  reference  to  a  rule,  couched  in  words  that  have 
now  legitimately  only  a  historical  meaning.  4 

1  A  usance  between  London  and  places  mentioned  below,  is  as  follows: 

Amsterdam,  is  one  calendar  month  after  date:  America,  North,  is  said  to  be 
sixty  days:  Altona,  Antwerp,  Brabant,  Bruges,  Geneva,  Germany,  Hamburgh, 
Holland  and  the  Netherlands,  Middleburgh,  Paris,  Rotterdam,  Rouen  and  Zea- 
land, is  one  calendar  month  after  date:  Berlin  and  Frankfort  on  the  Main,  14 
days  after  acceptance:  Cadiz,  Lisbon,  Madrid  and  all  Spain,  2  calendar  months 
after  date:  Genoa,  Leghorn,  Italy,  Milan,  Palermo,  Rome,  Venice,  and  Zante, 
3  calendar  months  after  date:  Constantinople,  Smyrna  and  West  Indies,  31 
days  after  date:  Oporto,  30  days  after  date:  Sweden.  75  days  after  date. 

Bayley  on  Bills,  ch.  7,  §  1,  says  ;  An  usance  between  this  kingdom  and  Am- 
sterdam, Rotterdam,  Hamburg,  Altona,  Paris,  or  any  place  in  France,  is  one 
calendar  month  from  the  date  of  the  bill ;  an  usance  between  us  and  Cadiz* 
Madrid  and  Bilboa,  two;  an  usance  between  us  and  Leghorn,  Genoa,  or  Venice, 
three.  Where  it  is  necessary  to  divide  a  month  upon  an  half  usance,  which  is 
the  case  where  the  usance  is  either  one  month  or  three,  the  division,  notwith- 
standing the  difference  in  the  length  of  the  months,  contains  fifteen  days. 

These  usances  are  calculated  exclutively  of  the  day  of  the  date  of  the  bill. 
Chitty  on  Bills.  873. 

*  Story  on  Bills,  §  338. 

1  Hogan  v.  Cuyler,  8  Cowen  R.,  208.  The  maker  as  well  as  the  indoraer  of 
a  promissory  note,  is  entitled  to  days  of  grace.  2  Cowen  R.,  712. 

4  Commercial  Code,  art.  135,  "  all  days  of  grace,  of  favor,  of  usage,  or  local 
custom,  for  the  payment  of  bills  of  exchange,  are  abolished."  Art.  187,  ex- 
tends the  same  provision  to  promissory  notes. 


518  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

In  computing  the  time  when  a  note  or  bill  becomes  due,  the 
days  of  grace  are  added;  and  what  shews  most  conclusively 
that  there  is  now  no  idea  or  notion  of  favor  connected  with 
them,  is  the  fact  that  interest  is  charged  and  allowed  for  them 
just  the  same  as  if  they  formed  a  part  of  the  note  or  bill 
itself,  i 

Days  of  grace  have  the  same  origin  as  usances,  and  like 
them  vary  in  number  in  different  places.  In  this  country  and 
in  Great  Britain,  three  days  are  allowed  as  days  of  grace,  to 
be  counted  exclusive  of  the  day  on  which  the  bill  or  note  falls 
due,  and  inclusive  of  the  last  day  of  grace;  unless  the  last 
day  happens  to  fall  on  a  Sunday  or  on  a  general  holiday  or 
day  of  rest,  and  in  that  case  the  note  or  bill  becomes  due  on 
the  day  preceding.  2  And  in  the  absence  of  proof  to  the 
contrary,  our  courts  always  presume  that  the  same  number  of 
days  are  allowed  by  way  of  grace  in  other  countries;  3  that  is 
to  say,  they  decide  according  to  the  law  as  it  stands  here, 
unless  the  party  claiming  the  benefit  of  the  foreign  law  proves 
it,  like  any  other  fact  tending  to  modify  or  establish  his  right 
of  action.  4 

But  when  properly  proved,  the  law  of  the  place  where  the 
bill  or  note  is  made  payable,  prescribes  the  number  of  days  of 
grace  allowed,  and  the  mode  in  which  they  are  to  be  calculated.  5 
A  bill  drawn  on  Paris,  or  any  other  place  in  France,  is  not 
entitled  to  any  days  of  grace;  6  while  a  bill  drawn  on  Berlin 
is  entitled  to  three  days,  and  a  foreign  bill  drawn  on  Spain  is 
generally  entitled  to  fourteen  days  grace.  7 

1  Bank  of  Utica  v.  Wager,  2  Cowen  R.,  712.  "  To  every  practical  purpose, 
therefore,  the  days  of  grace  are  a  part  of  the  note  itself." 

11 1  John.  Gas.  328;  2  Caines,  243;  4  Dal.,  127;  5  Binn.,  541;  4  Yerger.  2105 
10  Ohio,  507;  1  Minor,  295;  3  N.  Hamp.,  14;  2  Verm.,  129;  7  Gill,  and  John., 
78;  9  Peters,  33;  4  Met.,  203;  2  Hill  R.,  587;  12  John.  R.,  423;  13  id.  430;  3 
"Wend.,  456. 

»  Dollfus  v.  Frosch,  1  Denio,  367. 

4  Thompson  v.  Ketchum,  8  John.  R.,  189;  Cowen  and  Hills  Notes  to  Phil. 
Ev.,  1136,  7,  8,  and  cases  there  cited.  Wood  v.  Corl,  4  Met.,  203;  3  Kernan 
R.,  290. 

6 1  Denio,  367;  Kyd,  8;  Chitty  on  Bills,  376;  Story  on  Notes,  §  216,  247. 

*  See  the  article  of  the  Code  quoted  above. 

7  Mr.  Chitty,  giving  the  modern  usage  says  :  "  The  number  of  these  days 

varies,  according  to  the  ancient  custom  or  express  law  prevailing  in  each  par. 
l 


PRESENTMENT    FOR    PAYMENT.  519 

The  effect  of  a  local  custom  in  regulating  the  number  of 
days  of  grace  has  given  rise  to  some  discussion.  The  Supreme 
Court  of  the  United  States  decided  in  one  case  that  where  a 
note  is  made  for  the  purpose  of  being  negotiated  at  a  bank, 
whose  custom,  known  to  the  parties,  it  is  to  demand  payment 
and  give  notice  on  the  fourth  day  of  grace,  the  custom  forms  a 
part  of  the  law  of  the  contract;  i  and  have  followed  that  deci- 
sion by  another  to  this  effect,  that  when  a  note  is  made  payable 
or  negotiable  at  a  bank,  whose  invariable  usage  it  is  to  demand 
payment  and  give  notice  on  the  fourth  day  of  grace,  the 
parties  are  bound  by  the  usage,  whether  they  have  a  personal 
knowledge  of  it  or  not.  2  And  the  decision  was  placed  upon 
the  ground  of  an  implied  agreement  between  the  parties  to 
be  governed  by  the  usage  of  the  bank  at  which  they  have 

1  Rentier  v.  The  Bank  of  Columbia,  9  Wheat.,  582.    The  question  arose  in 
respect  to  a  long  standing  usage  in  the  District  of  Columbia. 
»  Mills  v.  The  Bank  of  the  U.  States,  11  Wheat.,  431. 


ticular  country.  In  the  former  edition  of  this  work  was  given  a  table  of  the 
days  of  grace  allowed  in  the  time  of  Beawes,  but  various  alterations  were  in- 
troduced by  the  Code  Napoleon,  and,  therefore,  the  following  table,  acknow- 
ledged to  be  most  accurate,  is  substituted  : 

jSltona.  Sundays  and  holydays  included,  and  bills  falling  due  on  a  Sunday 
or  holiday  must  be  paid,  or  in  default  thereof,  protested  on  the  day  previous, 
12  days. 

America.    3  days. 

Amsterdam  and  Antwerp.    Abolished  since  the  Code  Napoleon,  none. 
Berlin.    When  bills,  including  them,  do  not  fall  due  on  a  Sunday  or  holiday, 

in  which  case  they  must  be  paid  or  protested  the  day  previous,  3  days. 
Brazil.    Rio  Janerio,  Bahia,  including  Sundays,  8tc.,  as  in  the  last  case,  16 

days. 

England,  Scotland,  Walet  and  Ireland.    8  days. 
France.    Abolished  by  the  Code  Napoleon,  Hvre  1,  tit.  8,  §  5,  pi.  186;  1  Par- 

dess,  189.    Ten  days  were  formerly  allowed.    Pothier  pi.  14,  15;  none. 
Frankfort  on  the  Main.    Except  on  bills  drawn  at  sight,  Sundays  and  holy- 
days  not  included,  4  days. 

Genoa.    Abolished  by  the  Code  Napoleon,  none. 
Hamburg.    Same  as  at  Altona.  12  days. 
Ireland.    3  days. 
Leghorn.    None. 

Lisbon  and  Oporto.    15  days  on  local,  and  6  on  foreign  bills;  but  if  not  pre- 
viously accepted,  must  be  paid  on  the  day  they  fall  due,  6  or  16  day*, 
Palermo.    None. 


520  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

made  the  security  negotiable,  i  On  the  other  hand,  it  has 
been  adjudged  in  this  state  that  evidence  of  a  local  usage  in 
the  city  of  New- York,  cannot  be  given  for  the  purpose  of 
shewing  that  a  draft  drawn  upon  a  cashier  of  a  bank  and 
accepted  by  him,  payable  a  certain  time  after  date,  is  not 

1  Bank  of  Washington  v.  Triptett  &  Neale,  1  Peters  R.,  25.  Chief  Justice 
Marshall,  delivering  the  opinion  of  the  court  in  this  case,  says:  "  The  demand 
was  made  on  the  fourth  day  after  that  mentioned  on  the  face  of  the  bill  as 
the  day  of  payment.  The  defendants  in  error  insist  that  if  the  bill  was  never 
presented  for  acceptance,  payment  ought  to  have  been  demanded  on  the  day 
mentioned  on  its  face.  If  this  be  so,  then  it  ought  to  have  been  demanded  on 
the  third  day  afterwards,  which  is  the  last  day  of  grace. 

The  allowance  of  days  of  grace  is  a  usage  which  pervades  the  whole  com- 
mercial world.  It  is  now  universally  understood  to  enter  into  every  bill,  or 
note  of  a  mercantile  character,  and  to  form  so  completely  a  part  of  the  con- 
tract, that  the  bill  does  not  become  due,  in  fact  or  in  law,  on  the  day  mentioned 
on  its  face,  but  on  the  last  day  of  grace.  A  demand  of  payment,  previous 
to  that  day  will  not  authorize  a  protest  or  charge  the  drawer  of  the  bill." 

(The  bill  had  been  drawn  at  Alexandria  on  a  person  residing  in  "Washing- 
ton, and  demanded  according  to  the  usage  at  the  latter  place,  on  the  fourth 
day  of  grace.) 

"  The  usage  by  which  questions  of  this  sort  are  governed,  is  different  in 

Petersburgh.  Bills  drawn  after  date  are  entitled  to  10  days  grace,  those  drawn 
at  sight  to  only  3  days,  and  those  at  any  number  of  days  after  sight,  none 
whatever.  But  bills  received  and  presented  after  they  are  due  are  never- 
theless entitled  to  10  days  grace.  In  these  days  of  grace  are  included  Sun- 
days and  holydays,  as  also  the  day  when  the  bill  falls  due,  on  which  days 
they  cannot  be  protested  for  non-payment,  but  on  the  morning  of  the  last 
day  of  grace,  payment  must  be  demanded  and  if  not  complied  with,  the  bill 
must  be  protested  before  sunset,  10  or  3  <2ays. 

Rotterdam.     Abolished  by  the  Code  Napoleon,  none. 

Scotland.    3  days. 

Spain.  Vary  in  different  parts  of  Spain,  generally  14  days  on  foreign,  and  8 
on  inland  bills;  at  Cadiz,  only  6  days  grace.  When  bills  are  drawn  at  a  cer- 
tain date,  fixed  or  precise,  no  days  of  grace  are  allowed.  Bills  drawn  at 
sight  are  not  entitled  to  any  days  of  grace;  nor  are  any  bills  unless  accepted 
prior  to  maturity:  14  days,  but  vary. 

Trieste.  3  days  on  bills  drawn  after  date,  or  any  term  after  sight  not  less  than 
7  days,  or  payable  on  a  particular  day;  but  bills  presented  after  maturity 
must  be  paid  within  24  hours.  Sundays  and  holydays  ars  included  in  the 
days  of  grace,  and  if  the  last  day  of  grace  fall  on  such  a  day,  payment  must 
be  made  or  the  bill  protested  on  the  first  following  open  day,  3  days. 

Venice.  6  days,  in  which  Sundays,  holydays  and  the  days  when  the  bank  is 
shut,  are  not  included,  6  days. 

Vienna.    Same  as  at  Trieste,  3  days. 
Wales.    3  days. 


PRESENTMENT    FOR   PAYMENT.  521 

entitled  to  days  of  grace,  i  The  question  arose  on  a  draft  or 
bill  of  exchange  drawn  in  Detroit,  on  the  cashier  of  the  Oak- 
land county  bank,  Michigan,  payable  at  the  Phoenix  Bank,  in 
the  city  of  New- York,  sixty  days  after  date,  the  action  being 
brought  against  the  defendant  for  negligence  in  not  presenting 
the  same  for  payment  on  the  third  day  of  grace;  and  the 
offer  was  to  prove  that  by  the  usage  and  custom  of  banks, 
bankers  and  merchants  in  the  city  of  New- York,  the  instru- 
ment was  a  mere  bank  check,  payable  without  days  of  grace, 
and  that  consequently  there  had  been  no  negligence  on  the 
part  of  the  notary  in  treating  it  as  a  bank  check.  The  ruling 
of  the  court  upon  this  state  of  facts  has  been  reaffirmed  by 
the  court  of  Appeals,  in  a  recent  case,  where  it  was  held  that 
a  usage  of  banks  in  the  state  of  Connecticut  could  not  be 
received  in  evidence  to  shew  that  an  instrument  in  the  form 
of  a  check,  payable  at  a  future  day,  is  not  entitled  to  days  of 
grace. 2 

1  Woodruff  v.  The  Merchants'  Bank  of  the  city  of  N.  Y.,  25  Wend.,  878; 
S.  C.,  6  Hill  R.,  174. 

*  Bowen  v.  Newell,  4  Selden  R.,  190.  The  check  was  drawn  in  this  form: 
"  $2,000.  New-York,  October  5th,  1849.  Cashier  of  Thompson  Bank,  j>ay 
Zenas  Newell,  or  order,  two  thousand  dollars  on  the  12th  inst." 

"  Whether  days  of  grace  are  to  be  allowed  or  not  depends  upon  the  ques- 
tion whether  the  instrument  is  payable  on  demand,  or  at  a  future  day." 


different  places.  It  varies  from  three  to  thirty  days  and  the  usage  of  the 
place  on  which  the  bill  is  drawn,  or  where  payment  is  to  be  demanded, 
uniformly  regulates  the  number  of  d&ys  of  grace  which  must  be  allowed. 
This  bill  being  drawn  on  a  person  residing  in  Washington,  and  being  protested 
for  non-payment  in  the  same  place,  is,  according  to  the  law  merchant,  to  be 
governed  by  the  usage  of  Washington." 

The  usage  of  the  banks  in  the  District  of  Columbia  to  make  demand  on  the 
fourth  day  of  grace,  applies  only  to  notes  negotiated  by  the  bank.  Notes  left 
in  bank  for  collection  are  due  on  the  third  day  of  grace.  Hill  v.  Norvell.  8 
McLean,  583.  This,  however,  is  a  change  from  the  former  usage.  Cooken- 
dorf  v.  Preston,  4  How.  U.  S.,  817.  The  tendency  to  adopt  local  usages  in 
place  of  the  general  rule  of  commercial  law,  has  been  materially  checked  by 
recent  decisions,  15  id.,  539;  4  Selden  R.,  190;  but  the  law  of  the  place  of 
payment  governs.  Bowen  v.  Newell,  8  Kernan  R.,  290;  S.  C.,  2  Duer  R., 
684,  and  authorities  there  cited  by  Judge  Duer. 

31 


522  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

It  is,  however,  well  settled  that  the  law  of  the  place  where 
a  draft  is  made  payable  is  to  govern,  in  respect  to  the  allow- 
ance of  grace  upon  a  bill  of  exchange  or  check  drawn  in  one 
state  upon  another,  i  And  it  is  now  declared  by  statute  that 
such  a  draft  or  check,  drawn  on  a  bank  or  banker  in  this  state, 
is  not  entitled  to  days  of  grace.  2 

A  promissory  note  payable  at  a  certain  length  of  time  after 
date,  when  made  by  a  bank,  is  called  a  post  note;  and  it  has 
been  held  in  Massachusetts,  under  a  statute  allowing  days  of 
grace  on  all  negotiable  notes,  orders  and  drafts  payable  at  a 
future  day  certain,  that  no  usage  of  banks  or  business  men 
can  be  allowed  to  control  the  settled  law  of  the  state,  or  to 
take  from  such  a  note  the  days  of  grace  allowed  by  statute.  3 
But  where  it  is  uncertain  whether  or  not  days  of  grace  are  to 
be  allowed,  a  collecting  agent  acting  in  good  faith  and  with 
reasonable  skill  is  not  responsible  for  a  mistake  made  with 
respect  to  a  doubtful  question  of  law.  4  Thus,  when  a  bank 
receives  a  note  for  collection,  it  is  bound  to  use  reasonable 
skill  in  making  the  collection,  and  for  that  purpose  is  bound 
to  make  a  reasonable  demand  on  the  promisor,  and  in  case  of 
dishonor  to  give  due  notice  to  the  indorsers,  so  that  the  secu- 
rity of  the  holder  shall  not  be  lost  or  essentially  impaired  by 
the  discharge  of  the  indorsers.  5  Like  any  other  agent,  such 
bank  is  bound  to  the  use  of  reasonable  skill  and  ordinary 
diligence.  By  reasonable  skill  is  understood  such  as  is  ordi- 
narily possessed  and  exercised  by  persons  of  common  capacity, 
engaged  in  the  same  business  or  employment;  and  by  ordinary 
diligence  is  understood  that  degree  of  diligence,  which  persons 
of  common  prudence  are  accustomed  to  use  about  their  own 
aifairs.  6  As  a  general  rule,  every  man  is  bound  to  know  the 

1  Bowen  v.  Newell,  3  Kernan  R.,  290. 

8  See  statute  of  1857. 

3  Mechanics'  Bank  at  Baltimore  v.  Merchants'  Bank  at  Boston,  6  Metcalf, 
13;  Perkins  v.  Franklin  Bank,  21  Pick.  R.,  483. 

46Metcalf,  13. 

6  Fabeus  v.  Mercantile  Bank,  23  Pick.  R.,  330. 

6  Per  Ch.  J.  Shaw,  6  Met.,  26.  The  same  rule  applies  to  attorneys,  Gilbert 
v.  "Williams,  8  Mass.,  51 ;  to  Insurance  brokers,  Chapman  v.  Walton,  10  Bing., 
67;  to  factors,  Leverick  v.  Meigs,  1  Cowen,  645;  and  to  surgeons,  Scare  Y. 
Prentice,  8  East,  348. 


PRESENTMENT    FOR    PAYMENT.  623 

law;  but  consummate  skill  and  absolute  knowledge  of  the  law 
cannot  be  expected  of  men  engaged  in  the  ordinary  transac- 
tions of  business,  and  is  not  required,  i 

Checks,  drafts  and  notes  payable  on  demand  are  not  entitled 
to  any  days  of  grace;  while  notes,  bills  and  drafts  drawn  pay- 
able at  sight  are  entitled  to  the  usual  days  of  grace,  though 
the  form  of  the  instrument  does  not  appear  to  contemplate 
any  delay.  2 

By  a  statute  just  passed,  all  bills  of  exchange  or  drafts, 
drawn  payable  at  sight,  at  any  place  within  this  state,  are 
deemed  due  and  payable  on  presentation,  without  any  days  of 
grace  being  allowed  thereon.  And  all  checks,  bills  of  exchange 
or  drafts,  appearing  on  their  face  to  have  been  drawn  upon 
any  bank  or  upon  any  banking  association  or  individual 
banker,  carrying  on  banking  business  under  the  act  to  authorize 
the  business  of  banking,  which  are  on  their  face  payable  on 
any  specified  day  or  in  any  number  of  days  after  the  date  or 
sight  thereof,  are  deemed  due  and  payable  on  the  day  men- 
tioned for  the  payment  of  the  same,  without  any  days  of  grace 
being  allowed;  and  it  is  not  necessary  to  protest  the  same  for 
non-acceptance.  3 

1  It  seems  to  be  sufficient,  if  the  agent  on  a  doubtful  question  of  law  follows 
the  prevailing  practice,  6  Met.,  82. 

*  Chitty  on  Bills,  376;  Story  on  Bills,  §  342;  id.  on  Notes,  §  224;  Colman 
v.  Sayer,  1  Barnard  B.  R.,  303;  Bayley  on  Bills,  ch.  7,  §  1;  Selw.,N.  P.  844, 
7th  ed;  Smith's  Mercantile  Law,  244;  6  C.  &.  P.,  820. 

'Act  "  In  relation  to  commercial  paper,"  passed  April  17,  1857.  Session 
Laws  of  New-York.  The  statute  is  as  follows: 

The  People  of  the  State  of  New- York  repretented  in  Senate  and  Jtttrmbly, 
do  enact  at  follow*: 

§  1.  All  bills  of  exchange  or  drafts,  drawn  parable  at  sight,  at  any  place 
within  this  State,  shall  be  deemed  due  and  payable  on  presentation,  without 
any  days  of  grace  being  allowed  thereon. 

§  2.  All  checks,  bills  of  exchange  or  drafts,  appearing  on  their  face  to  have 
been  drawn  upon  any  bank  or  upon  any  banking  association  or  individual 
banker,  carrying  on  banking  business  under  the  act  to  authorise  the  business 
of  banking,  which  are  on  their  face  payable  on  any  specified  day  or  in  any 
number  of  days  after  the  date  or  sight  thereof,  shall  be  deemed  due  and  pay- 
able on  the  day  mentioned  for  the  payment  of  the  same,  without  any  days  of 
grace  being  allowed,  and  it  shall  not  be  necessary  to  protest  the  same  for  non- 
acceptance. 

§  3.  Whenever  the  residence  or  place  of  business  of  the  indorser  of  a  pro- 
missory note,  or  of  the  drawer  or  indoser  of  a  check,  draft  or  bill  of  exchange, 


524  BILLS  OF  EXCHANGE  AND    PROMISSORY   NOTES. 

It  deserves  to  be  mentioned  in  this  connexion  that  prom- 
issory notes,  being  made  negotiable  by  statute,  are  not  placed 
upon  the  footing  of  bills  of  exchange  in  all  the  states,  and  are 
not  generally  entitled  to  days  of  grace,  in  the  absence  of  any 
statutory  law  on  the  subject- 1  In  some  of  the  states,  as 
noticed  in  a  former  chapter,  notes  made  payable  to  order  or 
bearer,  at  a  bank,  are  made  negotiable  in  the  same  manner  as 
inland  billsr  leaving  other  common  notes  of  hand  out  of  the 
range  of  the  commercial  law.  2  In  others,  as  in  this  state,  the 
statute  gives  to  promissory  notes,  in  writing,  for  the  payment 
of  money,  drawn,  in  a  negotiable  form,  the  same  effect,  and 
makes  them  negotiable  in  like  manner  as  inland  bills  of  ex- 
change, according  to  the  custom  of  merchants.  3  In  others 
still,  the  statute  declares  them  negotiable,  without  giving  to 
them  the  usual  incidents  of  negotiable  paper.  4 

1  Ante  page  264-285,  note;  Norton  v.  Lewis,  2  Conn.  R.,  478;  Sharp  v. 
Ward,  7  Ham.  part  1st  (Ohio,)  R.,  223;  Jones  v.  Fales,  4  Mass.,  245;  Shep- 
herd v.  Hall,  1  Conn.  R.,  329;  6  Pick.,  80 -r  Backus  v..  Danforth,  10  Conn.  R., 
297. 

a  Pickard  v.  Valentine,  1  Shep.  (Maine, >R.,  412?  McDonald  v.  Smith,  2 
id.  99;  Rea  v.  Dorrance,  6  Shep.,  137;  Branch  Bank  at  Montgomery  v.  Goff- 
ney,  9  Ala.,  153;  Goddin  v.  Shipley,  7  B.  Mon.,  575. 

8  2  R.  S.,  52,  3d  ed;  6  Met.,  13;  21  Pick.,  483;  3  Cowen,  252. 
4  See  notes  giving  a  brief  abstract  of  the  statutes  of  the  different  states  on 
a  former  page. 


shall  be  in  the  city  or  town,  or  whenever  the  city  or  town  indicated  under  the 
indorsement  or  signature  of  such  indorser  or  drawer,  as  his  or  her  place  of  re- 
sidence, or  whenever  in  the  absence  of  such  indication,  the  city  or  town  where 
such  indorser  or  drawer,  from  the  best  information  obtained  by  diligent  inquiry, 
is  reputed  to  reside  or  have  a  place  of  business,  shall  be  the  same  city  or  town 
where  such  promissory  note,  check,  draft  or  bill  of  exchange  is  payable  or 
legally  presented  for  payment,  or  acceptance,  all  notices  of  non-payment  and 
of  non-acceptance  of  such  promissory  note,  check,  draft  or  bill  of  exchange 
may  be  served  by  depositing  them,  with  the  postage  thereon  prepaid,  in  the 
post-office  of  the  city  or  town  where  such  promissory  note,  check,  draft  or  bill 
of  exchange  was  payable  or  legally  presented  for  payment  or  acceptance, 
directed  to  the  indorser  or  drawer,  at  such  city  or  town. 

§  4.  This  act  shall  take  effect  on  the  first  day  of  July  next,  but  shall  not 
apply  to  any  bills  of  exchange,  checks,  drafts  or  promissory  notes  bearing 
date  prior  to  that  time. 


PRESENTMENT    FOR   PAYMENT.  525 

As  a  general  rule,  notes  that  are  not  negotiable  are  not 
entitled  to  days  of  grace,  i  This  class  of  notes  comprehends 
such  as  are  not  drawn  in  negotiable  terms,  2  such  as  are  pay- 
able in  specific  articles,  3  and  such  as  neither  the  statute  law 
nor  any  recognized  and  established  custom  has  rendered  nego- 
tiable. If  entitled  to  days  of  grace  by  custom  and  not  by 
virtue  of  statute  law,  the  custom  must  be  proved  affirm- 
atively. 4 

As  we  have  before  observed,  the  days  of  grace  when  allowed, 
in  reality  form  a  part  of  the  time  during  which  the  note  or 
bill  has  to  run :  as  a  consequence  of  this,  the  negotiability  of 
a  note  is  as  perfect  and  unrestricted  during  those  days  as  before 
their  commencement;  5  and  no  action  can  be  brought  upon 
the  instrument  until  the  third  day  has  expired.  6  The  bill 
or  note  is  dishonored  as  soon  as  payment  is  refused  on  a  de- 
mand made  at  a  suitable  hour  on  the  third  day  of  grace;  and 
it  is  held,  in  the  state  of  Massachusetts,  that  a  suit  may  be 
brought  on  the  note  on  the  very  day  it  becomes  due,  after 
demand  and  notice.  7  And  an  opinion  to  the  same  effect  has 
been  expressed  in  the  state  of  Maine.  8  But  it  is  admitted  on 

'10  Conn.  R.,  297;  Salter  v.  Burt,  20  Wend.,  206;  2  Conn,  ft.,  69;  8 
Hawks,  465. 

•  10  Conn.  R.,  297;  2  Conn.  R..  69. 

•  Hardeman  v.  Cowan,  10  S.  and  M.,  486. 
4  7  B.  Mon.,  575. 

•  The  Savings  Bank  of  New-Haven  v.  Bates,  8  Conn.  R.,  605. 

•  Osborne  v.  Moncure,  8  Wend.,  170;   Thomas  v.  Shoemaker,  6  Watts  and 
Serg.,  179;  Sevan  v.  Eldridge,  2  Miles,  353;  Wiggle  v.  Thompson,  11  S.  and 
M.,  452. 

1  Shed  v.  Butt,  1  Pick.,  401.  Wliere  the  notice  of  dishonor  is  given  to  an 
indorser  through  the  post-office,  the  notice  is  considered  as  given  as  soon  as  it 
is  so  deposited.  See  cases  cited  in  this  case.  City  Bank  v.  Cutter,  8  Pick., 
414. 

•  In  Greeley  v.  Thurston,  4  Greenl.  (Maine)  R.,  479,  it  was  held  that  "bills 
of  exchange  and  negotiable  notes  should  be  paid  on  demand,  if  made  at  a  rea- 
sonable hour  on  the  day  they  fall  due;  and  if  not  then  paid,  the  acci| 
maker  may  be  sued  on  that  day;  and  the  indorser  or  drawer  also,  after  no- 
tice given  or  duly  forwarded." 

The  facts  were  these:  The  action  was  assumpsit  brought  against  the  maker 
on  a  promissory  note,  and  the  writ  was  issued  between  four  and  five  o'clock  in 
the  afternoon  of  the  last  day  of  grace,  and  was  served  the  next  day.  And 
although  the  court  intimated  the  opinion  above  expressed,  they  conclude  by 


526  BILLS   OF  EXCHANGE  AND   PROMISSORY    NOTES. 

all  hands  that  the  maker  of  a  note  and  the  acceptor  of  a  bill 
is  entitled  to  the  usual  hours  of  business  oa  the  third  day  of 
grace  in  which'  to  make  payment,  and  that  where  a  note  is 
not  drawn  payable  at  a  particular  place,  or  at  a  bank,  a 
demand  of  payment  may  be  made  upon  the  maker  at  his  resi- 
dence at  any  time  before  the  usual  hours  of  rest;  and  that  for 
the  purpose  of  presenting  a  note  or  bill  for  payment,  the  pro- 
per hours  of  business  range  through  the  whole  day  down  to 
.bed  time  in  the  evening,  i  Upon  what  principle,  then,  can  it 
be  affirmed  that  the  maker  or  acceptor  is-  not  entitled  to  make 
payment  at  any  time  on  the  third  day  of  grace  during  the 
usual  hours  of  business  ?  The  contract  is  reciprocal,  and  the 
credit  clearly  does  not  expire  mitil  the  time  limited  by  the 
contract  has  fully  elapsed.  2 

For  the  purpose  of  charging  the  drawer  and  indorser,  the 
holder  is  authorized  to  demand  payment  at  any  seasonable 
hour  on  the  day  when  the  bill  or  note  becomes  payable  j  but 

• 

1  The  Cayuga  County  Bank  v.  Hunt,  2  Hill  R.,  635. 

a  Hopping  v.  Quin.,  12  Wend.,  517.  In  this  case  an  attorney  who  brought 
an  action  on  the  last  day  of  grace,  was  held  guilty  of  either  ignorance  or  neg- 
ligence ;  £nd  that  he  could  not  recover  against  his  client  for  such  fruitless  ser- 
vices. See  Hartley  v.  Case,  1  Carr  and  P.,  555;  4  B.  and  C.,  339;  6  D.  and 
R.,  505. 


saying:  "But  notes  of  hand  and  bills  of  exchange,  like  other  instruments,  are 
not  suable  until  the  day  of  maturity  be  passed,  unless  demanded  on  that  day. 
The  failure  to  pay  on  such  demand,  constitutes  a  breach  of  the  contract  and 
a  dishonor  of  the  bill  or  note,  by  the  usage  and  custom  of  merchants.  The 
necessity  of  a  demand  on  that  day,  prior  to  the  institution  of  an  action,  is 
clearly  deducible  from  the  opinion  of  Mr.  Justice  Buller,  (in  Leftley  v.  Mills, 
4  D.  and  E.,  170,)  and  from  the  cases  cited,  decided  in  Massachusetts.  In 
the  case  before  us,  it  does  not  appear  from  the  statement  of  facts  that  the  note 
was  demanded  of  the  defendant  prior  to  the  commencement  of  the  action ;  we 
must  therefore  decide,  in  accordance  with  the  principles  before  stated,  that  it 
was  prematurely  brought." 

InLunt  v.  Adams,  (5  Shep.  Maine  R.,  230)  a  demand  of  payment  was  made 
by  the  payee  on  the  maker  of  a  note  at  eight  o'clock  in  the  morning  of  the 
day  on  which  it  became  payable;  and  a  suit  immediately  commenced  thereon, 
was  held  prematurely  brought. 

The  doctrine  held  in  Massachusetts  has  been  adopted  in  some  of  the  other 
states.  Coleman  v.  Ewing,  4  N.  Hamp.,  241 ;  Wilson  v.  Williman,  1  Nott  and 
McCord,  440;  Dennie  v.  Walker,  7  N.  Hamp.,  199;  4  Humph.,  241. 


PRESENTMENT   FOR   PAYMENT.  527 

the  demand  does  not  give  or  perfect  the  holder's  right  of 
action  against  either  the  maker  of  a  note  or  the  acceptor  of  a 
bill  of  exchange,  i 

In  respect  to  bills  and  notes  drawn  payable  at  a  bank,  the 
engagement  of  the  parties  is  that  payment  shall  be  made 
during  the  usual  hours  of  business,  or  banking  hours,  on  the 
day  when  the  same  become  payable;  2  but  if  an  officer  or 
agent  of  the  bank  be  found  there  to  receive  or  refuse  payment 
at  a  later  hour  in  the  day,  the  presentment  will  be  sufficient 
as  we  have  seen  to  charge  the  indorsers,  and  there  is  no  reason 
for  saying  that  a  payment  so  made  will  not  discharge  the 
contract.  3 

According  to  the  law  as  laid  down  in  this  state  and  followed 
in  many  others,  "  the  demand  upon  the  maker  should  be 
made  on  the  third  day  of  grace,  and  within  a  reasonable  time 
before  the  expiration  of  the  day;  4  and  if  he  then  refuses 
payment,  the  holder  has  done  all  that  is  incumbent  upon  him 
to  do,  and  may  treat  it  as  a  dishonored  bill,  so  far  as  immedi- 
ately to  give  notice  to  the  indorser;  but  still  I  apprehend  the 
maker  has  the  whole  of  the  day  to  pay  in,  if  he  thinks  proper 
to  seek  the  holder.  It  is  undoubtedly  true  in  relation  to  other 
contracts,  that  the  party  has  until  the  last  instant  of  the  day 
to  make  payment;  and  I  perceive  no  reason  for  making  nego- 
tiable paper  an  exception  to  the  general  rule."  5 

The  parties  to  a  note  or  bill  may  if  they  choose,  draw  the 
instrument  without  grace;  and  if  the  intention  appear  upon 
the  face  of  the  bill  not  to  allow  any  days  of  grace,  it  will 

1  Randolph  v.  Cook,  2  Port.,  286;  6  Watts  and  Serg.,  179;  2  Miles,  8685 
but  see  Coleman  v.  Ewing,  4  Humph.,  241. 

*  Church  v.  Clark,  21  Pick.,  810.     In  this  case  the  action  was  commenced 
at  one  minute  past  twelve  o'clock  on  the  morning  of  the  third  day  of  grace} 
and  it  was  held  that  no  demand  could  be  made  until  the  proper  hours  of  busi- 
ness had  commenced.     Where  a  note  is  made  payable  at  a  bank  the  contract 
is  that  the  note  shall  be  paid  at  some  time  during  the  usual  hours  of  business 
at  the  bank. 

1  Flint  v.  Rogers,  15  Maine  R.,  67. 
4  2  Caines,  244;  12  John.  R.,  424. 

*  These  sentences  are  quoted  from  the  opinion  of  the  court  in  Orborn  T. 
Moncure,  3  Wend.,  170;  8  Bos.  and  Pull,  602;  4  Term  R.,  170;  see  Hume  T. 
Peploe,  8  East,  168;  and  Poole  T.  Tumbridge,  2  Mees.  and  Wela.,  228. 


528  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

become  due  and  payable  like  any  other  contract,  i  But  a 
note  payable  on  a  particular  day,  without  defalcation,  is  enti- 
tled to  the  usual  days  of  grace;  2  and  where  days  of  grace  are 
allowed,  the  indorser  has  a  right  to  insist  upon  them  to  the 
same  extent  as  the  maker.  3 

We  have  already  seen  that  bills  and  notes  should  be  pre- 
sented for  payment  at  a  reasonable  hour  of  the  day;  4  that 
when  payable  at  a  bank  they  should  be  presented  before 
the  hour  of  closing  business  of  that  kind  for  the  day; 5  and 
that  when  payable  at  the  counting  room,  office  or  store  of  the 
maker  or  acceptor,  they  should  be  presented  there  within  the 
usual  hours  of  business.  6  When  payable  at  large,  a  present- 
ment may,  as  we  have  said,  be  made  at  any  reasonable  time 
during  the  day  or  evening  up  to  the  usual  hours  of  rest;  and 
though  the  holder  is  bound  to  respect  the  custom  of  business 
established  in  a  particular  place,  requiring  a  presentment 
within  certain  limited  hours,  a  presentment  at  a  later  hour 
will  be  good  if  made  to  the  proper  person,  without  any  objec- 
tion being  taken  at  the  time  to  the  lateness  of  the  demand.  7 
A  few  instances  may  illustrate  the  rule  :  a  presentment  at  the 
bank  will  be  sufficient  though  made  after  business  hours, 
provided  an  officer  or  agent  is  found  there  to  answer  the 
demand;  8  and  a  presentment  to  the  maker  or  acceptor  at  his 
residence  at  eight  or  nine  o'clock  in  the  evening  has  been  held 

1  Kenner  v.  Their  creditors,  20  Martin,  (Louis.,)  36. 
a  McDonald  v.  Lee,  12  Louis.,  435. 

3  Central  Bank  v.  Allen,  16  Maine,  41.    As  the  drawer  of  a  bill,  for  many 
purposes,  stands  in  the  attitude  of  a  first  indorser,  he  also  has  a  right  to  claim 
the  usual  days  of  grace.     In  order  to  charge  him,  the  presentment  for  pay- 
ment must  be  made  on  the  third  day  of  grace.    Pratt  v.  Eads,  1  Blackford, 
81. 

4  12  John.  R.,  424;  2  Caines,  244;  2  Hill  R.,  635;  2  Sand.,  166. 

6  Parker  v.  Gordon,  7  East,   385;  17  John.  R.,  248;  7  How.  Miss.,  397;  2 
Smedes  and  Marsh.,  227. 

6  9  Shep.,  244. 

7  15  Maine,  67;  The  Bank  v.  Homer,  7  How.  Miss.,  448;  22  Maine,  244. 

8  Flint  v.  Rogers,  15  Maine,  67;  17  John.  R.,  248;  7  How.  Miss.,  448.     If 
there  be  a  custom  or  usage  of  the  bank  it  must  be  followed.     5  How.  Miss., 
397;  6Maule  and  S.,  44. 


PRESENTMENT   FOR  PAYMENT.  629 

sufficient,  i  while  a  presentment  a  few  minutes  before  twelve 
o'clock  at  night  has  been  held  unavailing,  unless  it  appear 
from  the  answer  of  the  maker  that  he  in  fact  waives  any 
objection  on  account  of  the  lateness  of  the  hour.  2  A  pre- 
sentment a  few  minutes  past  twelve  o'clock  in  the  morning  of 
the  third  day  of  grace  was  in  one  case  pronounced  a  nullity;  3 
and  a  presentment  at  eight  in  the  morning  has  been  declared 
premature.  4 

As  we  have  already  stated  in  passing,  Sundays  and  holidays 
are  to  be  counted  in  computing  the  time  during  which  bills 
and  notes  have  to  run,  except  when  the  third  day  of  grace 
falls  on  one  of  these  days.  5  In  that  event  the  bill  or  note 
becomes  payable  on  the  second  day  of  grace;  and  where  a 
Sunday  and  a  holiday  come  together,  one  after  the  other,  and 
the  third  day  of  grace  would  fall  on  the  last  of  the  two 
days,  the  note  or  bill  is  payable  on  the  first  day  of  grace.  6 
Mr.  Justice  Story  maintains  that  respect  must  also  be  paid  to 
the  religious  opinions  and  usages  of  the  particular  sect  to 
which  the  maker  or  acceptor  belongs,  in  determining  when  a 
bill  or  note  becomes  payable.  7  "A  case  may  occur  in  Eng- 
land or  America,  where  a  note  may  be  due  and  payable,  with- 
out the  allowance  of  any  of  the  three  days  of  grace.  Thus, 
for  example,  if  the  first  day  of  grace  should  be  on  Saturday, 

1  Barclay  v.  Bailey,  2  Carapb.,  627;  Triggs  v.  Newman,  10  Moore,  249;  1 
Car.  and  P.,  631.  The  same  rule  was  held  where  a  presentment  was  made  at 
the  house  of  the  acceptor  of  a  bill,  which  waa  shut  up,  at  eight  o'clock  in  the 
evening.  Wilkins  v.  Jadis,  2  Barn,  and  Adol.,  188. 

1  Dana  v.  Sawyer,  22  Maine,  244. 

»  21  Pick.,  810,  already  cit.-d. 

4  Lunt  v.  Adams,  17  Maine,  280. 

'  Jackson  v.  Richards,  2  Caincs,  348;  12  John.  R.,  428;  18  id.  480;  3  Wend. 
456;  4  Hill  R.,  129.  The  reason  why,  when  a  note  falls  due  and  payable  on 
Sunday,  that  being  the  last  day  of  grace,  it  is  demandable  on  Saturday,  is 
now  rather  historical  than  satisfactory.  When  the  allowance  of  days  of  grace 
were  an  indulgence,  it  was  reasonable  that  the  holder  should  be  at  liberty  to 
anticipate  the  usual  time  of  payment  in  such  cases.  Story  on  Notes,  §  228. 
See  reasoning  in  Salter  v.  Burt,  20  Wend.,  206. 

8  -1  Hill  R,.  587;  4  Wend.,  666;  4  Hill  R.,  129;  8  Pick.  R.,  1;  20  Maine  R., 
264;  1  Met.,  47;  6  Wheat.,  102;  2  McCord,  436. 

T  Story  on  Notes,  §  222;  Story  on  Bills,  §  840. 


530  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

and  Monday  should  be  Christmas  day,  and  the  maker  should 
be  a  Jew,  by  whose  religious  usages  abstinence  from  all  secu- 
lar business  is  enjoined  on  Saturdays,  the  note  would,  (it  is 
presumed,)  be  payable  on  Friday,  without  any  grace  whatso- 
ever. For  the  Jew  maker  would  not  be  compelled  to  do 
business  on  Saturday;  and  the  laws  and  usages  of  the  country 
would  not  justify  a  demand  on  Sunday  or  Christmas."  In 
other  words,  a  man  who  deliberately  draws  his  note  or  accepts 
a  bill  in  such  a  manner  that  it  matures  and  is  payable  on  a 
day  when  his  religion  forbids  him  to  fulfill  his  promise,  has  a 
right  to  interpose  his  religious  scruples  as  an  answer  to  his 
engagement,  and  is  entitled  to  demand  of  the  whole  commer- 
cial community  that  they  be  on  their  guard  in  taking  his  notes 
or  acceptances  so  drawn,  at  the  peril  of  losing  all  recourse  to 
the  other  parties  1  If  this  were  law,  it  would  require  of  the 
holder  to  use  diligence  to  ascertain  whether  the  maker  of  a 
note,  or  the  acceptor  of  a  bill,  be  a  Jew  or  a  seventh- day 
Baptist,  for  the  purpose  of  ascertaining  on  what  day  pay- 
ment of  them  should  be  demanded — a  burden  nowhere  recog- 
nized as  resting  upon  him,  and  one  that  would  prove  a  serious 
clog  upon  the  negotiability  of  the  instrument.  It  would  be 
wrong  to  compel  such  a  person,  at  the  risk  of  great  loss,  to  do 
an  unconscientious  act;  i  but  it  would  be  no  more  than 
reasonable  to  require  him  to  make  his  engagements  so  as  not 
to  mislead  others,  or  compel  them  to  search  out  and  make 
sure  of  his  faith — a  matter  which  we  saw  just  now  puzzling 
a  whole  nation  to  determine,  in  respect  to  a  man  conspicuous 
enough  to  become  a  prominent  candidate  for  the  presidency.  2 
The  only  reported  case  cited  by  Mr.  Justice  Story  as  authority 
for  the  statement  made  by  him  is  a  nisi  prius  decision  by  Lord 
Ellenborough;  and  that  clearly  does  not  support  the  doctrine 
he  lays  down.  3  There  the  holder  of  the  bill  and  the  plaintiff 

1  The  statute  of  1839,  1  R.  S.,  850,  3d  ed.,  did  not  allow  process  to  be 
served  upon  persons  on  Saturday  who  keep  that  day  as  a  divinely  appointed 
Sabbath,  and  excused  them  from  performing  military  duty  on  that  day;  but 
has  been  repealed  or  replaced  by  another  act,  3,  id.  658. 

4  See  the  campaign  papers  of  1856. 

»  Lindov.  Unsworth,  2  Campbell,  602. 


PRESENTMENT   FOR   PAYME3T.  631 

in  the  action  was  a  Jew;  and  the  bill  having  been  placed  in 
the  hands  of  his  bankers  for  collection,  was  dishonored  on 
Saturday  the  sixth  of  October,  and  notice  of  the  dishonor  was 
sent  to  him  on  Monday  the  eighth;  but  that  day  being  the 
greatest  of  Jewish  festivals,  during  which  it  is  unlawful  for 
persons  of  that  persuasion  to  attend  to  any  sort  of  business, 
and  his  counting  house  being  shut  so  that  the  notice  could  not 
be  communicated  to  him  till  after  the  post  had  been  dis- 
patched, he  was  excused  for  not  giving  notice  of  the  dishonor 
in  the  usual  time.  There  is  manifestly  a  wide  difference 
between  this  decision  and  a  rule  that  would  require  the 
holder  of  a  promissory  note  to  make  inquisition  into  the 
religious  opinions  and  usages  of  the  maker,  in  order  to  fix  the 
time  when  payment  should  be  demanded,  i 

"  At  common  law,  if  the  day  on  which  the  bill  would  other- 
wise be  due,  falls  on  a  Sunday,  or  on  a  great  holiday,  as 
Christmas  day,  the  bill  falls  due  on  the  day  before,  and  where 
a  third  day  of  grace  falls  on  a  Sunday,  the  bill  must  be  pre- 
sented on  Saturday,  the  second  day  of  grace."  2  This  is  the 
rule  laid  down  by  an  eminent  writer;  and  the  ground  on 
which  it  rests  is  this,  that  such  a  day  is  either  by  law  or  by 
general  or  universal  custom,  not  a  day  of  business.  3  The 
fourth  of  July  in  all  the  states,  and  thanksgiving  day  in  most 
of  them  is  of  this  character;  but  it  deserves  to  be  mentioned 
that  Good  Friday,  and  solemn  fast  days  in  England  proclaimed 
by  his  majesty,  are  included  among  the  holydays  by  virtue  of 
statutory  enactments;  thus  shewing  that  the  usages  of  even 
the  great  body  of  the  English  people  to  keep  these  days  as 
sacred  time,  were  not  thought  sufficient  of  themselves  to  mark 
them  as  holydays  in  the  calendar  of  commercial  law.  4 

1  There  is  good  sense  in  requiring  every  man  to  take  notice  of  public  and 
well-known  days  of  rest;  but  there  does  not  seem  to  be  any  good  reason  for 
requiring  the  holder  of  a  note  to  inquire  into  the  exceptional  and  peculiar 
opinions  of  the  maker,  to  ascertain  when  he  should  demand  payment  and  treat 
the  same  as  dishonored. 

1  Chitty  on  Bills,  877,  378. 

»  4  Wend.,  667. 

4  39  and  40  Geo.  8,  c.  42,  §  Ij  7  and  8  G«o.  4,  c.  15,  §  2. 


532  BILLS   OF  EXCHANGE   AND    PROMISSORY  NOTES. 

So  in  most  of  the  states.  The  statute  declares  what  days 
are  to  be  counted  out  of  the  calendar  of  business  time;  and 
the  inference  is  that  on  all  other  days  every  man  may  be 
reasonably  required  to  meet  his  engagements,  i 

PAYMENT. 

By  whom.  The  maker  of  a  promissory  note  and  the  accep- 
tor of  a  draft  or  bill  of  exchange,  being  the  parties  primarily 
liable,  are  bound  to  pay  the  bill  or  note  at  its  maturity;  and 
hence  the  payment  of  a  note  by  the  maker,  or  the  payment  of 
a  bill  by  the  acceptor,  when  properly  made,  discharges  the 
drawer  and  indorsers  thereon,  and  cancels  or  puts  an  end  to 
the  security  as  an  existing  obligation.  2  We  shall  see  as  we 
proceed  what  precautions  are  necessary  to  be  taken,  prelimi- 
nary to  the  payment  of  negotiable  notes  and  bills. 

When  a  bill  is  accepted  for  the  accommodation  of  the 
drawer  and  paid  by  the  acceptor,  a  contract  is  raised  or 
implied  on  the  part  of  the  drawer  to  indemnify  the  acceptor, 
or  refund  to  him  the  amount  so  paid  with  such  damages  as 
he  may  have  sustained  in  the  transaction.  3  But  though  an 
action  may  be  maintained  on  this  implied  contract,  it  cannot 
be  based  upon  the  bill  itself;  for  as  a  security,  it  has  answered 
the  purpose  for  which  it  was  drawn,  and  has  been  canceled.  4 

1  The  act  of  1849  is  in  these  words: 

"§  1.  The  following  days,  viz:  the  first  day  of  January,  commonly  called 
New  Year's  day,  the  fourth  day  of  July,  the  twenty-fifth  day  of  December, 
commonly  called  Christmas  day,  and  any  day  appointed  or  recommended  by 
the  Governor  of  this  State,  or  the  President  of  the  United  States,  as  a  day  of 
fast  or  thanksgiving,  shall  for  all  purposes  whatsoever  as  regards  the  present- 
ing for  payment  or  acceptance,  and  of  the  protesting  and  giving  notice  of  the 
dishonor  of  bills  of  exchange,  bank  checks  and  promissory  notes,  made  after 
the  passage  of  this  act,  be  treated  and  considered  as  the  first  day  of  the  week, 
commonly  called  Sunday."  New-York  Session  Laws  of  1849,  ch.  261. 

By  referring  to  the  statutes  of  many  of  the  States,  it  will  be  seen  that  sim- 
ilar provision  has  been  generally  made,  for  the  purpose  of  fixing  with  certainty 
the  days  which  are  to  be  regarded  as  holydays,  or  non-secular  time. 

8  Suydam  v.  Westfall,  2  Denio,  205,  and  opinions  given  in  the  case. 

*  Baker  v.  Martin,  3  Barb.,  634. 

4  Griffeth  v.  Reed,  21  Wend.,  502;  Wing  v.  Terry,  5  Hill  R.,  160;  Suydam 
v.  Westfall,  2  Denio,  205,  overrules  the  two  former  cases  in  one  respect,  but 
not  on  the  point  stated  in  the  text. 


PA 


Having  been  paid,  it  remains  in  the  hands  of  the  acceptor  as 
a  voucher  to  be  used  by  him  in  his  settlement  with  the 
drawer,  or  as  an  item  of  evidence  in  an  action  brought  for  the 
recovery  of  the  money  paid,  i  The  same  principles  apply  to 
the  case  of  a  promissory  note  made  for  the  accommodation  of 
the  payee,  or  of  some  other  person  to  whom  it  is  delivered 
for  negotiation.  2  In  substance  the  maker  lends  his  credit,  in 
the  form  of  a  negotiable  note,  and  the  borrower  undertakes  to 
indemnify  the  maker  against  any  loss  or  damages  to  which  he 
may  be  subjected  in  consequence  of  the  loan;  for  the  relation 
of  the  parties  towards  each  other  is  essentially  the  same  as  it 
is  where  one  person  lends  to  another  an  article  of  tangible 
property.  Nevertheless,  a  payment  of  the  note  by  the  maker 
extinguishes  the  obligation  created  by  the  instrument,  which 
is  simply  an  undertaking  to  pay  a  certain  sum  of  money  to 
the  legal  holder  of  the  note  when  it  falls  due.  So  that  when 
the  note  is  paid  and  taken  up  by  the  maker,  it  ceases  to  be 
obligatory  upon  any  of  the  parties;  it  has  performed  its  office, 
and  is  no  better  than  a  piece  of  blank  paper,  except  as  the 
memorial  of  a  part  of  the  transaction.  3 

In  like  manner,  a  person  who  signs  a  note  as  surety  for 
another  and  is  subsequently  compelled  to  pay  the  same,  has 
a  right  of  action  against  his  principal  to  recover  the  money 
so  paid;  and  though  he  is  entitled  to  be  put  in  the  place  of 
the  creditor,  or  subrogated  to  all  the  rights  and  means  which 
he  possessed,  to  enforce  payment  against  the  principal  debtor, 
his  proper  form  of  action  is  for  money  paid.  4  The  terms  of 
the  note  itself  are  satisfied  by  its  payment,  while  the  con- 
tract between  the  principal  and  his  surety  is  rarely  expressed 
in  words  on  the  note;  and  the  contract  between  the  surety 
and  payee  named  in  the  note  is  the  same  as  that  !>»•- 

1  Bank  of  Vergennes  v.  Cameron,  7  Barb.,  148;  and  cases  aboTe  died. 

•  3  John.  Cas.,  6;  1  Wils,  86;  8  Term.  R.,  182;  8  Campb.,  101;  2  Wheat., 
885. 

1  21  Wend.  R.,  606. 

4  Clason  v.  Morris,  10  John.  R.,  626;  Powell  v.  Smith,  8  id.,  249;  6  Wend., 
86.  If  the  surety  satisfies  the  debt  of  his  principal  by  the  payment  of  a  part 
of  the  demand,  he  can  recover  as  surety  only  the  amount  paid.  Barney  T. 
Seeley,  2  Wend.,  481. 


534  BILLS    OF  EXCHANGE   AND   PROMISSORY  NOTES. 

tween  the  principal  maker  and  the  payee,  i  Payment  of 
the  note  by  the  principal  maker,  of  course  discharges  the 
surety;  but  a  payment  of  the  note  by  the  surety,  while  it 
cancels  the  note,  raises  an  implied  contract  on  the  part  of  the 
principal  debtor  to  repay  the  same  to  the  surety.  2 

Consequently  an  agreement  to  "retire"  a  bill,  is  to  be  construed 
with  reference  to  the  circumstances  of  the  case.  To  use  the 
language  of  Jervis,  C.  J.,  "the  word  is  susceptible  of  various 
meanings,  according  as  it  applies  in  various  circumstances. 
If  the  acceptor  retires  a  bill,  he  takes  it  out  of  circulation — 
then  the  bill  is  paid;  but  if  .an  indorser  retires  it,  he  only 
withdraws  it  from  circulation  as  far  as  he  himself  is  concerned, 
and  may  hold  the  bill  with  the  same  remedies  as  he  would 
have  had  had  he  been  called  upon  in  due  course,  and  paid  the 
amount  to  his  immediate  indorsee.  This  is  the  ordinary  mean- 
ing of  the  word;  and  we  think  it  was  used  in  that  sense  in 
the  letter  in  question."  3 

It  was  at  one  time  held  in  this  state  that  where  a  draft  is 
drawn  by  one  person  as  principal  and  another  person  signs 
his  name  tinder  that  of  the  drawer  as  surety,  the  undertaking 
of  the  latter  is  with  the  payee  or  subsequent  holder,  that  the 
bill  shall  be  accepted  and  paid ;  but  that  he  incurs  no  obliga- 
tion whatever  to  the  drawees  of  the  bill,  who  accept  and  pay 
it  as  accommodation  paper.  4  But  the  doctrine  has  been  since 

'Pain  v.  Packard,  13  John.  R.,  174;  King  v.  Baldwin,  17  id.,  384;  10 
Wend.,  162;  13  id.,  375,  401;  Butler  v.  Rawson,  1  Denio,  105.  This  latter 
case  shows  that  it  is  necessary  to  declare  against  a  person  who  signs  a  note  as 
surety  specially;  see  note  next  below. 

2  Byles  on  Bills,  193;  Jennings  v.  Shrive,  5  Blackford,  37.     As  between  the 
makers  of  a  note  and  the  payee  or  holder,  the  makers  are  all  principals,  though 
one  of  them  signs  as  "security."     Sisson  v.   Barrett,  6  Barb.  R.,  199;  2 
Comst.  R.,  406.     As  between  themselves,  the  relation  of  the  parties  may  be 
proved.     Robinson  v.  Lyle,  10  Barb.  R.,  512. 

3  Elsom  v.  Denny,  25  Eng.  Law  and  Eq.  R.,  423.     The  agreement  in  ques- 
tion was  as  follows:  "  In  consideration  of  your  accepting  our  bill  on  you  for 
472/  10s,  due  7th  of  October,  we  hereby  engage  to  provide  the  funds  for  this 
bill  on  or  before  that  day,  and  also  to  put  you  in  cash  to  retire  our  bill  on 
Denny  &  Co.,  for  477/  10*,  due  the  20th  inst.,  on  or  before  that  date."    Evi- 
dence was  given  in  the  case  as  to  the  meaning  of  the  word  retire,  but  the  wit- 
nesses did  not  agree  with  each  other  as  to  its  meaning. 

4  Griffith  v.  Reed,  21  Wend.,  502;  4  Hill,  211;  5  Hill,  160. 


PAYMENT.  535 

overruled,  on  the  ground  that  all  the  parties  signing  a  draft 
not  drawn  upon  funds,  are  responsible  as  for  money  paid  at 
their  request,  i  Perhaps  there  is  a  reasonable  distinction 
between  the  former  cases  and  the  latter,  in  which  the  party 
signing  as  such  did  not  add  to  his  signature  the  word  surety.  2 
In  either  case,  however,  payment  of  the  bill  discharges  the 
obligation  created  by  the  terms  of  the  contract. 

Payment  of  a  bill  or  note  by  an  indorser  is  a  satisfaction  of 
it  only  in  respect  to  subsequent  indorsers;  for  a  bill  is  not 
discharged,  and  finally  extinguished  until  paid  by  or  on  behalf 
of  the  acceptor;  nor  a  note  until  paid  by  or  on  behalf  of  the 
maker.  3  For  this  reason,  when  an  indorser  takes  up  a  dis- 
honored note  or  bill,  he  is  at  liberty  to  put  it  again  in  circu- 
lation^ whereas  payment  by  the  maker  of  a  note  or  the 
acceptor  of  a  bill  discharges  it,  so  that  it  is  no  longer  nego- 
tiable. 5 

One  who  voluntarily  and  officiously  pays  the  debt  of  another, 
without  any  request  or  authority  to  do  so  from  the  debtor,  can- 
not recover  from  him  the  sum  paid.  6  But  where  a  stranger 
pays  the  amount  of  a  bill  of  exchange  to  the  bankers  at  whose 
house  the  bill  is  by  the  acceptance  made  payable,  and  obtains 
the  bill,  the  acceptors  are  not  discharged :  so  held  where  the 
person  with  whom  a  bill  was  left  for  collection  improperly 

1  Suydam  v.  Westfall,  4  Hill  R.,  211;  and  S.  C.,  2  Denio,  205. 

•  See  the  prevailing  opinion  of  Senator  Bockee,  2  Denio,  210.  211 ;  Story  on 
Bills,  §420;  Strong  v.  Foster,  33  Eng.  Law.  and  Eq.  R.,  282.    One  who 
signs,  with  another  owing  a  debt,  a  joint  and  several  promissory  note  for  the 
same  is  not  to  be  treated  as  a  surety;  the  question  whether  a  party  is  to  be 
considered  as  principal  or  surety  is  to  be  ascertained  by  the  terms  of  the 
instrument  itself,  without  the  aid  of  extraneous  evidence.    "  The  man  who 
takes  an  accommodation  bill,  knowing  that  it  is  an  accommodation  bill,  takes 
it  meaning  to  have  two  principals  to  look  to  for  the  payment;  and  he  who 
puts  his  name  to  an  accommodation  bill  does  so  intending  to  become  a  prin- 
cipal debtor."    Decided  in  1855. 

>  *  Byles  on  Bills,  174.    In  the  Pacific  Bank  v.  Mitchell,  it  was  held  that  a 
bank  holding  a  bill  for  collection  does  not,  by  passing  it  to  the  credit  of  tho 
holder,  discharge  the  acceptor;  on  the  contrary,  that  the  bank  succeeds  to 
the  rights  of  the  holder. 
4  3  Wend.,  75;  1  Cowen  R.,  387;  and  8  Comst..  494. 

•  American  Bank  v.  Jenness,  2  Met.,  288;  2  Eng.  Com.  Law  R.,  267. 

•  Jones  v.  Wilson,  3  John.  R.,  434;  8  id.  436;  14  id.  87. 


536  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

procured  it  to  be  discounted  and  afterwards  took  up  the  bill 
in  order  that  he  might  return  it  to  the  true  holder,  i  The 
distinction  here  is  between  a  purchase  and  a  payment  of  the 
bill,  made  on  behalf  of  the  acceptor. 

When  a  stranger  calls  upon  the  holder  of  a  note  that  is 
overdue,  inquires  for  the  note,  and  asks  the  holder  if  he  is 
willing  to  receive  the  money  upon  it,  and  pays  the  amount 
due,  declining  to  have  it  cancelled,  and  takes  it  away  with 
him,  the  transaction  amounts  to  a  payment  and  not  a  sale  of 
the  note.  By  the  court,  Welles,  J.  "  The  production  of  the 
note  at  the  trial  was  prima  facie  evidence  that  it  belonged  to 
the  plaintiff,  and  that  he  had  received  it  before  due,  in  the 
regular  course  of  business.  But  this  presumption  is  fully  met 
and  rebutted.  It  remained  in  the  hands  of  Folger  and  Lewis, 
who  had  purchased  it  before  maturity,  until  after  it  was  dis- 
honored, and  until  Riley  obtained  it  by  paying  what  was  due 
upon  it,  as  before  stated,  and  without  then  or  at  any  other 
time  saying  a  word  about  its  purchase.  It  is  true  he  declined 
having  it  cancelled;  but  that  circumstance  was  not  enough, 
in  my  judgment,  to  overcome  the  presumption  arising  from  the 
facts  proved,  that  it  was  paid  and  extinguished.  It  does  not 
prove  a  purchase,  and  unless  it  was  purchased  by  Riley,  it 
was  satisfied  by  the  payment."  2 

After  a  foreign  bill  has  been  protested  for  non-payment, 
any  person  may  pay  it,  (under  protest,)  for  the  honor  of  the 
drawer  or  of  an  indorser;  and  is  entitled  to  demand  re-pay- 
ment not  only  from  the  person  for  whose  honor  he  made  the 
payment,  but  from  all  other  parties  who  are  liable  to  that 

1  Deacon  v.  Stodhart,  2  Man.  and  Gr.,  317. 

a  Burr  v.  Smith,  21  Barb.  Sup.  Ct.  R.,  262.  The  note  in  this  case  was 
negotiable,  being  payable  to  bearer.  Where  the  note  is  not  negotiable  the 
transfer  must  be  proved  in  the  first  instance ;  the  presumption  arising  from 
possession  is  different.  Barrick  v.  Austin,  id.  241.  The  possession  of  a  note 
negotiable  by  delivery  is  evidence  of  the  plaintiffs  title,  notwithstanding  it 
appears  to  have  been  transfered  to  the  plaintiff  after  it  became  due.  Smith 
v.  Schanck,  18  Barb.  R.,  344.  Where  the  payee  of  a  note  payable  to  him  or 
order  transfers  without  indorsing  the  note,  the  person  to  whom  it  is  transfered 
takes  it  as  an  assignee,  subject  to  all  the  equities.  Hedges  v.  Seely,  9  Barb. 
R.,  214. 


PAYMENT.  537 

person,  i  With  this  exception  to  the  general  rule,  there  is  no 
reason  why  an  officious  payment  and  satisfaction  of  a  bill  or 
note  should  not  be  held  to  cancel  the  security.  2 

To  whom.  In  the  next  place,  to  whom  should  the  payment 
of  bills  and  negotiable  notes  be  made  ?  The  answer  is,  pay- 
ment should  be  made  to  the  holder  and  real  proprietor  of  the 
bill,  or  to  some  person  authorized  by  him  to  receive  the  same;  3 
it  should  be  made  to  the  party  having  the  title  and  possession 
of  the  instrument.  4  If  drawn  payable  to  bearer,  or  indorsed 
in  blank  so  that  the  title  passes  by  the  simple  act  of  delivery, 
possession  alone  is  presumptive  evidence  of  title  and  a  suffi- 
cient authority  to  demand  and  receive  payment.  5  For  when- 
ever the  person  presenting,  the  note  or  bill  has  the  right  to 
demand  payment,  the  maker  or  acceptor  must  of  course  be 
authorized  to  pay.  On  this  account,  as  we  have  seen,  the  bill 
or  note  should  be  actually  presented  for  payment  and  ready 
to  be  surrendered  up,  in  order  to  make  the  demand  effectual.  6 

It  is  very  evident  that  the  maker  or  acceptor  will  be  pro- 
tected in  paying  a  note  or  bill  to  the  party  presenting  it  under 
such  circumstances  as  would  give  a  right  of  action  thereon  to 
a  purchaser  in  good  faith  for  value.  7  And  it  is  clear  that  he 
is  bound  to  pay  a  bona  fide  holder  who  has  parted  with  value 
for  the  same  before  it  became  due,  notwithstanding  it  may 
have  been  previously  lost  or  stolen.  8  But  having  notice  that 

1  13  John.  R.,  322;  Bayley  on  Bills,  ch.  8,  §  1. 

'  Louisiana  Bank  v.  Roberts,  4  Miller,  (Louis.,)  530. 

•  Favenc  v.  Bennett,  11  East,  40;  Yates  v.  Frecklington,  Dougl.,  628. 

4  Canal  Bank  v.  Bank  of  Albany,  1  Hill  R.,  287.  Morgan  v.  The  Bank  of 
the  state  of  New-York,  1  Kernan,  404.  In  this  case  the  defendant  was  sued 
for  money  deposited  in  its  bank,  and  it  appeared  that  they  had  paid  the 
amount,  $716.92  on  a  check  drawn  by  the  plaintiff  payable  to  the  order  of  G. 
W.  Corlies  &  Co.,  and  purporting  to  have  been  indorsed  by  them,  but  the  in- 
dorsement was  a  forgery,  and  the  plaintiff  was  held  entitled  to  recover.  1 
Duer,  434. 

•  Bank  of  Utica  v.  Smith,  18  John.  R.,  230. 

•  7  Mass.,  483;  7  Gill,  and  John.,  78;  8  Barb.  R.,  408. 

1  Russell  v.  Ball,  2  John.  R.,  50  jlDenioR.,  583;  5Wend.,600;  8Wend.,478. 

•  11  John.  R.,  128;  The  Fulton  Bank  v.  The  Phoenix  Bank,  1  Hall,  562; 
Wheeler  v.  Guild,  2  Pick.,  545;  Knight  v.  Pugh,  4  Watta  and  Serg.,  445; 
Burr.,  452,  1516. 

32 


538  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

the  bill  or  note  has  been  lost  by  the  real  proprietor  or  stolen 
from  him,  he  should  not  pay  the  same  to  the  finder  nor  to  any 
other  person  until  the  latter  establishes  a  clear  title  or  gives 
an  adequate  indemnity  against  the  claim  of  any  other  per- 
son, i  Paying  with  notice  of  the  loss,  the  maker  or  acceptor 
pays  at  his  peril  j  for  if  it  turns  out  that  the  party  in  posses- 
sion was  not  the  real  owner  of  the  bill  nor  entitled  to  recover 
thereon  as  a  bona  fide  holder,  he  will  be  obliged  to  pay  it  over 
again  to  the  true  proprietor.  2  But  a  mere  notice  from  the 
payee  of  the  bill  to  the  acceptor,  giving  him  information  of 
its  loss,  and  directing  him  not  to  pay  it,  is  no  defence  to  an 
action  on  the  bill.  3  And  since  the  true  owner  is  not  entitled 
to  payment  of  a  lost  negotiable  note  or  bill  transferable  by 
delivery,  without  giving  ample  security  against  any  claim  to 
be  made  by  a  third  person,  it  would  seem  to  follow  that  the 
notice  of  loss  should  be  accompanied  by  an  adequate  indem- 
nity, such  as  the  law  authorises  the  maker  or  acceptor  to 
require  before  paying  the  same.  4  Otherwise  the  latter  may 
be  subjected  to  the  costs  of  a  suit  and  to  the  burden  of  a 
litigation  that  does  not  arise  out  of  any  fault  on  his  part. 

In  the  ordinary  course  of  business,  possession  of  a  bill  or 
note  payable  to  bearer  or  indorsed  in  blank,  being  the  usual 
and  recognized  evidence  of  title,  is  sufficient  to  authorize  the 
bearer  in  fact,  to  convey  a  valid  title  to  any  person  taking 
the  same  in  good  faith.  5  And  the  rule  appears  to  be  now 
well  settled  that  nothing  short  of  fraud  or  bad  faith  in  the 
party  paying  a  note  or  bill  will  render  the  payment  ineffectual. 
When  the  party  presenting  a  negotiable  instrument  for  pay- 
ment is  a  stranger,  bankers  usually  require  an  introduction 
or  identification  of  the  person  presenting  the  paper,  as  a  rea- 

I  Solomons  v.  Bank  of  England,  13  East,  135;  1  Rose,  99;  9  B.  and  C., 
208. 

II  Lovell  v.  Martin,  4  Taunt.,  799;  2  Carr.  and  P.,  261 ;  Lancaster  v.  Walsh, 
4  Mee.  and  Wels.,  16. 

*  Lambeth  v.  Rivarde,  16  Louis.,  572. 

4Rawley  v.  Ball,  3  Cowen  R.,  303;  Kirby  v.  Sisson,  2  Wend.,  550;  12 
Wend.,  173;  Smith  v.  Rockwell,  2  Hill  R.,  483. 

*  Goodman  v.  Hawey,  4  Ad.  and  El.,  870;  Backhouse  v.  Hanison,  5  B.  and 
Ad.,  1098;  Story  on  Notes,  §  382. 


PAYMENT.  539 

sonable  precaution  against  mistakes  and  fraud.  But  it  has 
been  held  that  even  gross  negligence  unaccompanied  by  bad 
faith,  will  not  defeat  the  title  of  a  purchaser  for  value;  and 
there  is  no  ground  for  requiring  of  the  maker  or  acceptor  or 
of  his  agent,  any  thing  more  than  good  faith  in  the  payment 
of  a  note  or  bill,  i 

In  determining  the  question  of  title,  where  a  note  or  bill 
is  presented  for  payment,  the  maker  or  acceptor  must  take 
care  to  ascertain  that  the  indorsements  are  properly  made  so 
as  to  vest  the  title  in  the  person  demanding  payment.  2  If 
the  indorsements  on  the  note  or  bill  be  made  in  blank,  it  is 
sufficient  to  make  certain  that  the  payee's  indorsement  is  gen- 
uine; but  if  the  successive  indorsements  be  special,  the  holder 
cannot  derive  title  to  the  paper  through  a  forged  indorsement, 
and  consequently  the  party  paying  should  be  careful  to  ascer- 
tain that  these  also  are  genuine.  Thus,  where  the  payee  of  a 
note  drawn  payable  to  him  or  order,  indorses  it  specially  pay- 
able to  A  or  order,  and  he  again  indorses  it  specially  payable 
to  B  or  order,  the  title  to  the  note  is  in  B,and  no  other  person 
has  the  right  to  demand  payment  of  it  except  as  his  agent.  3 

*4  Ad.  and  EL,  870;  11  Serg.  and  B.,  179;  7  Cowen  R.,  174.  When  a 
question  of  bad  faith  arises,  it  is  for  the  jury  to  determine.  Conroy  T.  War- 
ren, 8  John.  Cas.,  259;  12  Pick.,  399;  14  id.,  172;  15  Martin,  291;  Adama  T. 
Oakes,  6  Carr.  and  P.,  70. 

*  1  Hill  R.,  287.  The  maker  must  at  all  events  see  that  he  pays  to  the 
order  of  the  payee;  for  if  his  indorsement  turn  out  a  forgery,  it  is  a  payment 
by  mistake;  1  Kernan  R-,  402. 

'  Burdick  v.  Green,  15  John.  R.,  247;  Story  on  Notes,  §  383.  The  case  of  a 
lost  note  specially  indorsed,  illustrates  the  rule  stated  in  the  text.  If  lost,  in- 
dorsed in  such  a  manner  as  to  pass  by  delivery,  the  maker  is  entitled  at  com- 
mon law  to  demand  an  adequate  indemnity  be/ore  paying  the  note.  But  if  it 
be  not  negotiable,  or  negotiable  and  not  indorsed  at  all  at  the  time  of  the  loss, 
or  if  specially  indorsed,  so  that  the  finder  could  not  obtain  the  money  on  it 
without  falsely  personating  the  indorsee  or  forging  hk  name  upon  it,  the  true 
owner  has  an  action  at  law  on  the  note,  on  the  ground  that  in  such  a  condition 
it  cannot  come  into  the  hands  of  a  bona  fide  holder  for  value.  Long  and 
othere'v.  Bailie,  2  Campb.  N.  P.,  214,  note,  is  in  point.  The  action  was 
against  the  defendant  as  acceptor  of  a  foreign  bill  of  exchange,  drawn  by  one 
Alvez,  payable  to  his  own  order,  and  specially  indorsed  by  him  to  the  plaintiffs. 
Lucas,  clerk  to  Winter  and  Kaye,  proved  that  he  carried  the  original  bill  to 
the  Temple,  to  enable  one  Jones  to  compare  it  with,  the  affidavit  to  hold  to 


540  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

The  case  is  different  where  the  payee  indorses  it  in  blank 
here,  though  there  are  subsequent  special  indorsements  on  the 
note,  the  holder  is  at  liberty  to  deduce  his  title  through  the 
first  indorser;  i  and  hence  the  maker  is  protected  in  paying 
the  note  to  the  party  in  possession,  just  the  same  as  if  it  had 
been  originally  made  payable  to  bearer.  If  the  first  indorse- 
ment be  special  and  the  second  in  blank,  the  subsequent  holder 
takes  title  through  both  of  these  indorsements,  2  and  the  maker 
should  see  that  both  of  them  are  genuine  when  he  pays  the  note. 
When  any  person  who  indorses  a  bill  of  exchange  or  a 
negotiable  note  to  another,  whether  for  value  or  for  the  pur- 
pose of  collection,  comes  again  into  possession  thereof,  he  is 
regarded  as  the  bona  fide  holder  and  proprietor  of  such  bill, 
unless  the  contrary  appear, in  evidence,  and  is  entitled  to 
recover,  notwithstanding  there  may  be  on  it  one  or  more 
indorsements  in  full,  subsequent  to  the  one  to  him,  without 
producing  any  receipt  or  indorsement  back  from  either  of  such 
indorsees,  whose  names  he  may  strike  from  the  instrument,  or 
not,  as  he  may  think  proper.  3  And  of  course  the  maker 

1  The  Watervliet  Bank  v.  White,  1  Denio,  608.     In  Thompson  v.  Rohertson, 
it  was  spoken  of  as  a  question  whether  a  subsequent  holder  could  take  title 
directly  from  the  first  indorser  in  such  a  case.    4  John.  R.,  27. 

2  Leavitt  v.  Putnam,  1  Sand.  R.,  199;  Potts  v.  Reed,  6  Esp.  R.,  57. 

3  Mottram  v.  Mills,  1  Sand.,  37.     The  opinion  in  this  case  contains  a  full 
and  handsome  review  of  the  authorities  on  the  point  stated  in  the  text.    And 
Leavitt  v.  Putnam,  (id.  199,)  shews  that  an  indorsement  not  negotiable  in 
terms,  of  a  negotiable  note  does  not  terminate  its  negotiability;  and  that  the 
effect  is  the  same  whether  the  indorsement  be  made  before  or  after  due.    3 
Comst.,  494. 

bail,  and  having  done  so,  and  taken  a  correct  copy  of  it,  put  it  into  his  pocket 
book,  which  was  stolen  on  his  return  home.  Jones  proved  that  the  copy  pro- 
duced was  correct,  and  that  Alvez  the  drawer  had  indorsed  it  specially  to  the 
plaintiffs.  On  this  evidence  the  plaintiffs  had  a  verdict  before  Lord  Ellenbo- 
rough  at  nisi  prius,  December,  1805;  Potts  v.  Reed,  6  Esp.  R.,  57;  Chitty  on 
Bills,  231,  268.  See  also  Rowley  v.  Ball,  3  Cowen,  303;  Swift  v.  Stephens,  8 
Conn.  R.,  431 ;  McNair  v.  Gilbert,  3  Wend.,  344.  Possession  of  a  note  trans- 
ferable by  delivery  only,  or  indorsed  in  blank,  is  prima  facie  proof  of  title. 
Bayley  v.  Taber,  6  Mass.,  451;  Northampton  Bank  v.  Pepoon,  11  id.,  288;  16 
Pick.,  315;  Depens  v.  Whelan,  6  Blackf.,  485;  10  John.  R.,  104;,  Clay  v. 
Crowe,  18  Eng.  Law  and  Eq.,  514.  If  a  negotiable  note  or  bill  be  lost,  the 
loss  is  a  defence  at  law;  not  so  if  it  be  not  negotiable. 


PAYMENT.  641 

or  acceptor  is  justified  in  paying  the  note  or  bill  to  such 
holder. 

Ordinarily,  neither  the  maker  of  a  note  nor  the  acceptor  of 
a  draft  or  bill  that  has  been  negotiated,  can  know  of  his  own 
knowledge  the  signatures  of  the  indorsers;  and  therefore  if  the 
bill  or  note  purports  to  be  properly  indorsed,  and  the  maker 
or  acceptor  pays  it  on  presentment,  and  it  afterwards  turns 
out  that  one  of  the  indorsements  was  a  forgery,  and  that  the 
party  presenting  it  had  no  title  to  the  instrument,  this  is  a 
payment  through  a  mutual  mistake  of  facts  in  respect  to  which 
both  parties  are  equally  bound  to  inquire,  and  the  money  paid 
may  be  recovered  back,  i  But  the  drawee  is  bound  to  know 
the  signature  of  the  drawer;  and  if  he  accepts  or  pays  the  bill, 
it  is  an  admission  on  his  part  that  the  signature  of  the  drawer 
is  genuine;  and  though  it  afterwards  proves  to  be  a  forgery, 
he  cannot  compel  the  person  to  whom  he  paid  the  bill  to  re- 
store the  money,  unless  that  person  be  in  some  way  implica- 
ted in  the  fraud.  2  This  rule,  however,  does  not  require  the 
drawee  to  know  the  handwriting  of  the  body  of  the  bill;  and 
though  that  be  altered  by  a  forgery,  increasing  the  amount  and 
changing  the  name  of  the  payee,  still  if  the  drawee  pay  the 
same  by  mistake,  without  knowledge  of  or  reason  to  suspect 
the  alterations,  that  is  to  say,  without  being  guilty  of  any  neg- 
ligence in  not  discovering  the  forgery  before  paying  the  bill, 
he  is  entitled  to  recover  back  the  money  so  paid.  3 

It  has  been  held  in  England  that  where  a  bill  is  accepted 
payable  at  a  banker's,  and  he  pays  the  bill  when  it  is  present- 
ed, and  on  the  day  afterwards  discovers  the  acceptance  to  be 
a  forgery  and  gives  notice  of  the  fact  to  the  party  to  whom  the 
payment  was  made,  he  cannot  recover  back  the  money  so  paid. 
And  the  decision  is  placed  upon  the  ground  that  the  holder  is 
entitled  to  know  upon  the  day  when  the  bill  falls  due,  whether 

1 1  Hill  R.,  287.  In  this  case  the  name  of  the  payee  indorsed  on  the  note 
was  a  forgery. 

*  Price  v.  Neal,  3  Burr.,  1354;  Wilkinson  v.  Lutwid^e,  1  Strange,  648. 

8  The  Bank  of  Commerce  v.  The  Union  Bank,  3  Comst.  R.,  280.  The  draft 
in  this  case  was  altered  from  $105  to  $1005,  and  the  name  of  the  payee  from 
"  J.  Durand  "  to  "  J.  Bennet,"  and  the  Bank  of  Commerce  paid  the  hill  to 
the  Union  Bank,  and  within  two  days  after  demanded  a  return  of  the  money. 


542  BILLS   OF  EXCHANGE  AND   PROMISSORY   NOTES. 

it  is  honored  or  dishonored,  so  that  he  may  take  the  necessary 
steps  to  secure  his  recourse  to  the  prior  parties,  i  But  the 
authority  of  this  case  has  been  doubted  in  this  state,  and  the 
question  raised  whether  the  indorsers  are  entitled  to  strict 
notice,  where  only  a  reasonable  delay  is  caused  in  this  manner.2 

Where  the  party  paying  does  not  act  as  the  agent  of  the 
drawee  or  acceptor,  so  that  he  is  under  no  greater  obligation 
to  know  the  handwriting  of  the  parties  to  the  bill  than  the 
holder  himself,  he  is  entitled  to  recover  baek  the  money  paid 
on  a  forged  bill :  so  held  where  a  person  took  up  and  paid  cer- 
tain bills  for  the  honor  of  an  indorser  who  was  his  correspon- 
dent, and  on  the  same  morning  ascertaining  that  the  bills  were 
not  genuine,  the  names  of  drawer,  acceptor  and  indorser  being 
forgeries,  gave  immediate  notice  to  the  party  to  whom  the 
payment  was  made,  and  demanded  to  have  the  money  repaid. 
The  mistake  of  fact  in  this  case  was  considered  as  mutual 
between  the  holder  and  the  party  paying  for  honor.  3 

A  case  of  a  similar  character  has  been  lately  decided  in  this 
state.  The  draft  purported  to  have  been  drawn  by  the  cashier 
of  the  Canal  Bank  of  Cleveland,  Ohio,  payable  to  the  order  of 
E.  S.  Moore,  and  addressed  to  the  American  Exchange  Bank 
in  New-York  city;  and  was  indorsed  to  the  Bank  of  Rutland 
for  the  face  of  the  bill  by  a  man  calling  himself  Moore, 
whose  residence  was  unknown,  and  who  was  not  seen  or  heard 
of  afterwards.  The  draft  was  sent  forward  through  a  bank 
in  Troy  to  the  defendants  for  collection,  and  was  received  by 

1  Cocks  v.  Masterman,  9  Barn,  and  Cress,  902,  The  banker  in  this  case 
acts  as  the  agent  of  the  acceptor,  and  the  acceptor  knows  whether  the  accep- 
tance be  valid  or  not ;  can  the  acceptor  by  acting  through  an  agent  vary  his 
legal  liability  ?  But  the  decision  was  not  placed  directly  on  this  point. 

8  1  Hill  R.,  291,  293. 

8  Wilkinson  v.  Johnson,  3  Barn,  and  Cress,,  428,  Per  Curiam:  "  We  think 
the  payment  in  this  case  was  a  payment  by  mistake  and  without  considera- 
tion to  a  person  not  wholly  free  from  blame,  and  who  ought  not,  therefore,  in 
our  opinion,  to  retain  the  money,  *  •  The  person  thus  called  upon  ought 
certainly  to  satisfy  himself  that  the  name  of  his  correspondent  is  really  on  the 
bill;  but  still  his  attention  may  reasonably  be  lessened  by  the  assertion,  that 
the  call  itself  makes  to  him  in  fact,  though  no  assertion  be  made  in  words; 
and  the  fault,  if  he  pays  on  a  forged  signature,  is  not  wholly  and  entirely  his 
own,  but  begins  at  least  with  the  person  who  thus  calls  upon  him.?' 


PAYMENT.  543 

them  on  Saturday,  and  presented  for  payment  by  their  notary 
to  the  American  Exchange  Bank  on  the  same  day;  and  pay- 
ment was  refused  for  want  of  funds.  On  Monday  morning 
the  plaintiffs  who  were  correspondents  of  the  Canal  Bank  at 
Cleveland,  called  at  the  office  of  the  notary  where  the  draft 
was  and  left  a  check  for  the  amount,  (but  did  not  see  the  draft 
in  consequence  of  the  absence  of  the  notary,)  and  left  word 
to  have  the  draft  sent  to  them.  On  the  following  day  the 
plaintiffs  went  again  to  the  office  of  the  notary,  saw  the  draft 
and  immediately  pronounced  it  a  forgery,  and  thereupon 
demanded  of  the  defendants  a  return  of  the  money  paid  on 
the  check :  this  being  refused,  an  action  was  brought  for  the 
recovery  of  the  same,  plaintiffs  obtained  a  verdict  and  the 
judgment  pronounced  thereon  by  the  Superior  Court  of  the 
city  of  New-York,  was  affirmed  by  the  Court  of  Appeals,  i 
Bronson  Ch.  J. :  "  The  drawee  of  a  bill  is  held  bound  to  know 
the  handwriting  of  his  correspondent,  the  drawer;  and  if  he 
accepts  or  pays  a  bill  in  the  hands  of  a  bona  fide  holder  for 
value,  he  is  concluded  by  the  act,  although  the  bill  turns  out 
to  be  a  forgery.  If  he  has  accepted  he  must  pay;  and  if  he 
has  paid,  he  cannot  recover  the  money  back.  This  is  an 
exception  to  the  general  rule,  that  money  paid  under  a  mis- 
take of  fact  may  be  recovered  back.  The  exception  is  fully 
established;  but  I  do  not  see  that  it  applies  to  this  case.  As 
the  plaintiffs  intervened  and  paid  the  bill  for  the  honor  of  the 
supposed  drawers,  I  do  not  doubt  that  the  exception  would 
have  applied  to  them,  as  well  as  to  the  drawees,  had  they 
seen  the  bill  before  they  parted  with  their  money  :  but  they 
had  not  seen  it."  On  the  question  of  notice,  the  chief  justice 
proceeds :  "  There  was  in  truth  no  use  in  giving  notice  of  the 

'Goddard  and  St.  John  v.  The  Merchants'  Bank,  2  Sand.,  247;  S.  C.  4 
Comst.,  147  The  draft  was  as  follows:  "$1,000.  Cleveland,  Ohio,  August 
28,  1847.  Canal  Bank — Pay  to  the  order  of  £.  S.  Moore  one  thousand  dollars, 
value  received,  which  place*  to  the  account  of  S.  II.  Mann,  Cashier.  To 
American  Exchange  Bank,  N.  Y.  No.  214."  The  man  calling  himself  Moore 
indorsed  the  draft  to  the  Bank  of  Rutland  for  one  thousand  dollars,  and  dis- 
appeared; and  the  draft  was  sent  to  the  Farmers'  Bank  of  Troy,  and  by  that 
bank  was  forwarded  to  New-York,  so  that  Moore  WM  the  only  party  to  whom 
recourse  could  be  had  thereon. 


544  BILLS   OF  EXCHANGE  AND  PROMISSORY  NOTES. 

dishonor  of  the  bill,  with  the  view  of  charging  any  party  to 
it.  The  defendants  only  had  it  for  collection,  and  wanted  no 
recourse.  Notice  to  the  supposed  drawers  could  serve  no 
purpose,  because  the  bill  was  a  forgery :  and  Moore,  the  payee 
who  forged  the  bill,  was  answerable  to  the  bank  of  Rutland, 
which  he  had  defrauded  without  notice."  The  dissenting 
opinion,  concurred  in  by  two  of  the  judges,  holds  it  to  be  the 
duty  of  the  drawee  to  ascertain  that  the  signature  of  the 
drawer  is  genuine  before  paying  the  bill ;  and  that  the  person 
who  intervenes  and  pays  for  the  honor  of  the  supposed  drawer 
is  equally  bound  to  see  and  examine  the  bill,  and  decide  for 
himself  as  to  its  being  genuine. 

Where  the  person  receiving  payment  on  a  forged  bill  has 
no  recourse  to  any  other  party  thereon,  or  has  the  same  right 
of  action  notwithstanding  the  want  of  notice,  the  question  of 
laches  does  not  arise.  Thus,  where  the  drawee  accepts  and 
pays  a  bill  drawn  payable  to  the  order  of  a  fictitious  person, 
or  to  the  order  of  a  real  person  who  never  had  any  interest 
in  the  bill  and  whose  name  has  been  forged  upon  it  by 
the  drawer;  the  bill  being  negotiated  in  that  condition,  and 
none  of  the  parties  but  the  drawer  having  any  knowledge  of 
the  forgery;  the  drawee  and  acceptor  cannot  recover  back  the 
money.  The  title  to  the  bill  passes  in  the  same  manner  as  if 
it  had  been  drawn  payable  to  a  fictitious  person,  or  to  bearer; 
and  inasmuch  as  the  acceptor  has  no  recourse  to  the  prior 
parties,  he  has  no  right  to  recover  back  the  money  so  paid,  i 

1  Coggill  v.  The  American  Exchange  Bank,  1  Comst.  R.,  113.  The  follow- 
ing are  the  remarks  of  Mr.  Chitty  on  the  subject,  p.  431:  "With  respect  to 
payment  by  mistake  of  bills  or  notes  where  there  has  been  forgery,  the  deci- 
sions and  opinions  have  been  contradictory.  It  seems  however  clear  on  prin- 
ciple as  well  as  authority,  that  a  drawee  of  a  bill,  or  a  banker  acting  for  his 
customer,  cannot,  in  case  he  pays  a  bill  where  the  drawer's  signature  has  been 
forged,  or  where  the  sum  has  been  fraudulently  enlarged,  without  fault  of  the 
drawer,  debit  the  drawer  with  the  sum  so  paid  without  his  authority,  or  re- 
cover the  amount  from  him.  But  there  are  many  conflicting  decisions  upon 
the  question,  whether  the  party  paying  shall  be  allowed  to  recover  back  the 
money  from  the  person  to  whom  he  has  inadvertently  paid.  It  has  been  con- 
tended, that  if  the  party  paid  was  a  bona  fide  holder,  ignorant  of  the  forgery, 
then  he  ought  not  to  be  obliged  to  refund  under  any  circumstances,  although 
he  could  not  have  enforced  payment,  and  although  he  had  immediate  notice 


PAYMENT.  646 

Where  a  bank  pays  a  forged  check  or  a  check  that  has  upon 
it  the  genuine  signature  of  its  customer  but  has  been  fraudu- 
lently altered  to  a  larger  sum,  it  cannot  debit  the  drawer  with 
the  sum  so  paid  without  authority,  i  But  if  a  bill  or  check 
be  drawn  in  so  careless  and  improper  a  manner  as  thereby 
to  enable  a  third  person  to  practice  the  fraud,  the  customer 
and  not  the  bank  must  bear  the  loss.  2 

1  Hall  v.  Fuller,  6  Barn,  and  Cress. ,750;  Scholey  v.  Ramsbottom,  2  Campb. 
485;  Morgan  v.  The  Bank  of  the  State  of  New- York,  1  Kernan  R.,  4<>». 

*  Young  v.  Grote,  4  Bing.,  258.  A  customer  of  a  banker  delivered  to  his 
wife  certain  printed  checks  signed  by  himself,  but  with  blanks  for  the  sums, 
requesting  his  wife  to  fill  up-  the  blanks  according  to  the  exigency  of  his  busi- 
ness. She  caused  one  to  be  filled  up  with  the  words  "  fifty  pounds  two  shil- 
lings," the  fifty  being  commenced  with  a  small  letter  and  placed  in  the  middle 
of  a  line;  the  figures  50/  2«  were  also  placed  at  a  considerable  distance  from 
the  printed  L;  in  this  state  she  delivered  the  check  to  her  husband's  clerk  to 
receive  the  amount,  whereupon  he  inserted,  at  the  beginning  of  the  line  in 
which  the  word  fifty  was  written,  the  words  "  three  hundred  and,"  and  the 
figure  3  between  the  L  and  the  50,  and  the  bankers  having  paid  the  :: 
it  was  held  that  the  loss  must  fall  on  the  customer)  on  the  ground  that  the 
person  who  carelessly  furnishes  another  with  the  means  of  committing  a  fraud 
must  bear  the  consequences  of  the  act.  On  the  same  principle,  where  it  ia 
the  custom  to  deliver  out  bills  left  for  acceptance  to  the  person  who  calls  for 
them  and  describes  them  by  a  particular  private  mark,  if  the  clerk  of  the 
party  leaving  a  bill,  by  his  conduct  enables  a  stranger  to  discover  the  mark,  in 
consequence  of  which  the  bill  is  delivered  out  to  him,  the  owner  of  the  bill 
looses  it.  Morrison  v.  Buchanan,  6  Carr.  and  P.,  18. 


of  the  forgery,  because  the  drawee  was  bound  to  know  the  handwriting  of  the 
drawer  and  the  genuineness  of  the  bill,  and  because  the  holder  being  ignorant 
of  the  forgery,  ought  to  have  the  benefit  of  the  accident  of  such  payment  \>j 
mistake,  and  not  be  compelled  to  refund.  But  on  the  other  hand  it  may  be 
observed,  that  the  holder  who  obtained  payment  cannot  be  considered  ai 
having  altogether  shown  sufficient  circumspection;  he  might,  before  he  dis- 
counted or  received  the  instrument  in  payment,  have  made  more  inquiries  as 
to  the  signatures  and  genuineness  of  the  instrument,  even  of  the  drawer  or 
indorsers  themselves;  and  if  he  thought  fit  to  rely  on  the  bare  representation 
of  the  party  from  whom  he  took  it,  there  is  no  reason  that  he  should  profit  by 
the  accidental  payment,  when  the  loss  had  already  attached  up.»n  himself,  and 
why  he  should  he  allowed  to  retain  the  money,  when  by  an  immediate  n«.tico 
of  the  forgery  he  is  enabled  to  proceed  against  all  other  parties  precisely  tho 
game  as  if  payment  had  not  been  made,  and,  con-e.inently,  the  payment  to 
him  has  not  in  the  least  altered  his  situation,  or  occasioned  any  delay  or  pre- 
judice. It  seems,  that  of  late,  upon  questions  of  this  nature,  these  latter 


646  BILLS  OF   EXCHANGE  AND  PROMISSORY  NOTES. 

A  draft  that  has  not  been  accepted,  and  a  bank  check, 
should  not  be  paid  after  notice  from  the  drawer  counter- 
manding the  authority,  nor  after  the  death  of  the  drawer 
which  is  a  revocation  of  the  authority,  i  But  if  the  bank  pay 
without  knowledge  of  the  drawer's  death,  it  seems  the  money 
cannot  be  recovered  back,  and  there  is  no  reasonable  ground 
for  holding  the  payment  invalid.  2  For  the  authority  of  an 
agent  is  presumed  to  continue  until  terminated  by  notice 
brought  home  to  him;  and  the  bank  on  which  a  check  is 
drawn,  having  funds,  is  bound  to  pay  the  draft. 

The  person  transfering  a  negotiable  note  or  draft,  whether 
by  indorsement  or  delivery,  impliedly  guarantees  the  title  to 
it,  unless  the  transfer  be  made  under  such  circumstances  as 
to  shew  clearly  that  the  purchaser  took  it  at  his  own  risk.  3 
And  hence  the  person  who  obtains  money  or  goods  on  the 
instrument,  or  procures  it  to  be  discounted,  is  bound  to  refund 
what  he  has  received,  in  case  it  proves  to  be  a  forgery.  4  But 
if  the  transfer  is  made  without  indorsement,  the  person  making 
it  is  liable  only  to  his  immediate  assignee — he  is  not  a  party 
to  and  is  not  liable  on  the  bill.  5 

The  general  rule  of  law  is  that  if  a  party  pay  money  under 
a  mistake  of  law  he  cannot  recover  it  back;  but  if  he  pay 
money  under  a  mistake  of  the  real  facts,  and  no  laches  are 
imputable  to  him  (in  respect  of  his  omitting  to  avail  himself 
of  the  means  of  knowledge  within  his  power,)  he  may  recover 
back  such  money.  On  this  principle  it  has  been  held  that  an 
indorser,  who  having  been  discharged  by  the  laches  of  the 

1  Chitty  on  Bills,  429,  430. 

8  Tate  v.  Hilbert,  2  Ves.  jun.,  118;  24  Wend.,  240. 

8  Jones  v.  Ryde,  6  Taunt.,  488;  Bruce  v.  Bruce,  5  id.  495;  Ellis  v.  Wild,  6 
Mass.,  321;  Harris  v.  Bradley,  7  Yerg.,  310;  2  John.  R.,  456;  5  Conn.  R.,  71. 
4  Fuller  v  Smith,  1  Car.  and  P.,  197;  Herrick  v.  Whitney,  15  John.  R.  240. 
6  Ward  v.  Evans,  Ld.  Raym.,  928;  Enly  v.  Lye,  15  East,  7. 

considerations  have  influenced  the  court  in  determining  whether  or  not  the 
money  shall  be  recoverable  back ;  and  it  will  be  found,  on  examining  the  older 
cases,  that  there  were  facts  affording  a  distinction,  and  that  upon  attempting 
to  reconcile  them  they  are  not  so  contradictory  as  might  on  first  view  have 
been  suspected. 


PATMENT.  647 

holder,  pays  a  bill  under  a  misrepresentation  of  the  facts,  is 
entitled  to  recover  back  the  money  so  paid,  especially  where 
he  has  been  prejudiced  by  the  laches  of  the  holder,  i  So 
where  the  holder  of  a  post-dated  check,  knowing  the  drawers 
to  be  insolvent  concealed  that  fact  and  the  circumstance  of 
the  check's  being  post-dated,  and  drew  the  money  on  it,  with 
knowledge  that  the  drawees  had  no  funds  of  the  drawer  but 
were  expecting  some  that  day,  the  party  so  paying  was  allowed 
to  recover  back  the  money  paid.  2 

Where  a  person  places  money  in  the  hands  of  an  agent  or 
banker  to  pay  a  particular  draft,  and  the  latter  by  mistake 
pays  another  draft  of  the  same  description,  the  party  making 
the  deposit  cannot  recover  back  the  money  from  him  to  whom 
it  has  been  paid.  The  identical  money  is  not  traceable,  and 
there  is  no  privity  of  contract  between  the  depositor  and  the 
party  receiving  payment.  3  Much  less  can  an  action  be  sus- 
tained to  recover  back  the  money  paid,  where  the  only  mistake 
made  consists  in  the  payment  of  one  instead  of  another  draft 
drawn  by  the  same  person  and  of  a  similar  amount.  4 

Where  the  holder  of  a  note  or  bill  has  made  a  general 
assignment  for  the  benefit  of  his  creditors,  or  where  his  pro- 
perty has  been  transfered  by  operation  or  due  process  of  law, 
or  where  he  has  become  or  been  legally  declared  incompetent 
for  the  transaction  of  business,  the  maker  or  acceptor  knowing 
the  fact  should  be  careful  to  make  payment  to  the  party 
entitled  to  receive  it.  5  If  the  holder  die,  payment  should  be 
made  to  his  personal  representatives;  6  and  if  he  become 

1  Milnes  v.  Duncan,  6  Barn,  and  Crew.,  671.  There  was  no  direct  misre- 
presentation of  the  facts  in  this  case,  but  the  holder  assumed  a  fact  which 
appeared  to  be  but  was  not  true. 

1  Martin  v.  Morgan,  8  Moore,  686.  The  mistake  of  an  indorser  who  pays  • 
bill  after  having  been  discharged  by  the  laches  of  the  holder,  does  not  give 
him  any  remedy  against  a  prior  indorser  discharged  by  the  same  neglect, 
Roscoe  v.  Hardy,  12  East,  484. 

»  Rogers  v.  Kelly,  2  Campb.,  128. 

4  Bogart  v.  Nevius,  6  Serg.  and  Rawle,  861 ;  Dey  v, Murray,  9  John.R.,  171. 

•  Wilson  v.  Allen,  6  Barb.,  642;  4  Denio,  80;  1  Sand.,  629;  4  Paige,  479; 
Kelly  v.  Cowing,  4  Hill,  266}  Clark  v.  Yale,  12  Wend,,  470, 

*  Chitty  on  Bills.  394. 


•548  BILLS  OF   EXCHANGE  AND   PROMISSORY  NOTES. 

insane,  it  should  be  made  to  his  committee  or  guardian,  i     In  . 
other  words,  while  the  general  rule  is  that  the  payment  should 
be  made  to  the  party  having  the  property  in  the  bill  or  note, 
or  to  his  agent,  it  should  not  be  made  to  a  person  who  has  not 
the  legal  capacity  to  release  or  discharge  the  contract* 

Jit  what  time.  In  respect  to  the  time  when  a  bill  or  note 
should  be  paid,  it  is  to  be  observed  that  payment  means  pay- 
ment in  due  course,  and  not  by  anticipation;  and  that  if  a 
negotiable  note  or  bill  of  exchange  be  paid  before  its  maturity/ 
and  not  surrendered,  and  afterwards  come  into  the  hands  of 
a  bona  fide  holder,  it  is  a  valid  security  in  his  hands.  2  In  a 
case  presenting  this  state  of  facts,  Lord  Ellenborough  says : 
"  Had  the  bill  been  due  before  it  came  into  the  plaintiff's 
hands,  he  must  have  taken  it  with  all  its  infirmities.  In  that 
case,  it  would  have  been  his  business  to  inquire  minutely  into 
its  origin  and  history.  But  receiving  it  before  it  was  due, 
there  was  nothing  to  awaken  his  suspicion.  I  agree  that  a 
bill  paid  at  maturity  cannot  be  reissued,  and  that  no  action 
can  afterwards  be  maintained  upon  it  by  a  subsequent  indorsee. 
A  payment  before  it  becomes  due,  however,  I  think  does  not 
extinguish  it  any  more  than  if  it  were  merely  discounted. 
A  contrary  doctrine  would  add  a  new  clog  to  the  circulation 
of  bills  of  exchange  and  promissory  notes;  for  it  would  be 
impossible  to  know  whether  there  had  not  been  an  anticipated 
payment  of  them.  It  is  the  duty  of  bankers  to  make  some 
memorandum  on  bills  and  notes  which  have  been  paid;  but  if 
they  do  not,  the  holders  of  such  securities  cannot  be  affected 
by  any  payment  made  before  they  are  due.  While  a  bill  of 
exchange  is  running,  it  remains  in  a  negotiable  state.  I  can- 
not limit  its  negotiability  the  last  few  days  before  it  becomes 
due,  more  than  the  first  few  days  after  it  is  drawn."  3 

1  Leonard  v.  Leonard,  14  Pick.,  280. 

8  Ayer  v.  Hutchinson,  4  Mass.  R.,  372;  White  v.  Kebling,  11  John.  R.,  128. 

3  Burbridge  v.  Manners,  3  Campb.,  N.  P.  R.,  193.  In  White  v.  Kibling, 
supra,  the  indorsee  took  the  note  before  maturity  with  notice  of  a  previous 
payment,  and  it  was  held  that  he  took  it  subject  to  such  payment.  In  Brown 
v.  Davis,  3  Term  R.,  80,  the  question  was,  whether  a  payment  before  the 
indorsement,  and  after  the  note  fell  due,  could  be  proved,  and  it  was  holden  that 


PAYMENT.  549 

The  reason  Irere  assigned  why  a  bill  or  note  should  not  be 
paid  before  its  maturity,  would  not  apply  where  the  maker  or 
acceptor  took  up  and  cancelled  the  paper;  for  in  such  a  case 
it  could  not  afterwards  come  into  the  hands  of  a  bona  fide 
holder.  But  there  is  still  another  reason  why  negotiable  paper 
should  not  be  paid  until  its  maturity  :  if  paid  before,  contrary 
to  the  usual  course  of  business,  the  party  paying  will  be  held 
bound  to  take  more  than  ordinary  care  that  the  payment  be 
made  to  the  true  proprietor.  Thus,  if  a  check  be  paid  the 
day  before  it  bears  date,  and  it  turn  out  to  have  been  lost  and 
paid  to  the  wrong  person,  the  banker  may  be  compelled  to  pay 
it  again  to  the  true  owner,  i 

The  acceptor  of  a  bill,  whether  inland  or  foreign,  and  the 
maker  of  a  promissory  note,  should  pay  it  on  demand  made  at 
any  time  within  business  hours  on  the  day  when  it  becomes 
payable;  and  if  it  be  not  paid  on  such  demand,  the  holder  may 
instantly  treat  it  as  dishonored.  2  But  the  maker  or  acceptor 
has,  as  we  have  seen,  the  whole  of  that  day  in  which  to  make 
payment;  and  though  he  should  in  the  course  of  that  day  re- 
fuse payment,  and  thus  entitle  the  holder  to  give  notice  of 
dishonor,  still  if  he  makes  payment  afterwards  and  on  the 
same  day,  it  will  be  sufficient,  and  will  render  the  notice  of 
dishonor  of  no  avail.  3  The  engagement  of  the  indorser  being 
an  undertaking  that  the  note  or  bill  shall  be  paid  at  maturity, 
he  of  course  becomes  liable  to  an  action  as  soon  as  the  credit 
given  to  the  maker  or  acceptor  has  expired.  4 

1  Da  Silva  v.  Fuller,  cited  by  Chitty  on  Bills,  260,  895. 

1  Haynes  v.  Birks,  8  B.  and  P.,  699;  4  Term  R.,  170. 

1  Osborn  v.  Moncure,  3  Wend.,  170;  2  Cowen,  766.  Mr.  Byles  on  Bills.  175, 
states  the  rule  with  the  same  qualification.  See  6  Watts  and  Scrg.,  179. 

4  Siggers  v.  Lewis,  2  Dowl.  P.  C.,  181;  1  Crom.  M.  and  ROM,  870;  4 
Tyrw.,  847. 

it  might.  In  Churchill  v.Suter,  4  Mass.,  161,  Parson,  Ch.  J.,  says,  "The  circu- 
lation of  negotiable  paper  is  extremely  useful  to  trade,  as  it  multiplies  commer- 
cial credit,  and  the  notes  pass  from  man  to  man  as  cash.  Any  rule  of  law,  tend- 
ing unnecessarily  to  repress  this  circulation^  therefore  against  public  policy." 
A  premature  release  of  the  acceptor  of  a  bill,  will  have  no  efiect  upon  the 
right  of  the  indorsee  to  recover  thereon,  unless  notice  thereof  is  brought  homo 
to  him,  that  is  to  say,  unless  he  took  the  bill  with  notice.  Dodd  v.  Edwards.  2 
Carr.  and  Payne,  602. 


550  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

How  made.  Payment  of  negotiable  notes  and  bills  must 
always  be  made  in  money,  i  If  drawn  payable  in  any  thing 
else,  they  are  not  negotiable,  and  are  not  governed  by  the  rules 
applicable  to  the  payment  of  negotiable  paper.  For  instance, 
a  note  made  by  a  farmer  payable  in  farm  produce  without 
specifying  any  time  or  place  of  payment,  is  payable  on  demand 
made  at  the  farm  of  the  debtor;  and  in  an  action  against  the 
maker  it  is  necessary  to  shew  a  refusal  to  pay  on  such 
demand.  2  The  same  principle  applies  where  a  merchant 
gives  his  note  payable  in  goods,  or  a  mechanic  gives  his  due- 
bill  payable  in  work;  the  goods  must  be  demanded  of  the  mer- 
chant at  his  store,  and  the  work  must  be  required  of  the 
mechanic  at  his  shop.  3 

It  frequently  happens  in  the  ordinary  course  of  business 
that  the  holder  of  negotiable  notes  and  bills  of  exchange,  or 
his  agent,  takes  in  payment  checks  or  bank  bills  in  lieu  of 
money;  indeed,  it  would  be  quite  impracticable  to  act  uni- 
formly upon  the  principle  of  demanding  strictly  what  the  law 
allows,  namely,  payment  in  money.  And  yet  there  is  no 
absolute  safety  in  anything  short  of  that.  If  the  holder  takes 
payment  in  bank  bills,  it  may  turn  out  that  the  bank  has 
failed;  and  if  he  takes  a  check  it  may  be  dishonored. 

Suppose  then  the  holder  of  a  note,  on  its  becoming  due, 
takes  the  check  of  a  third  person  and  surrenders  the  note, 
expecting  to  receive  the  money  on  the  check,  is  this  a  pay- 
ment of  the  note?  The  law  answers,  no;  it  is  not  a  payment 
unless  expressly  received  as  such,  or  unless  the  circumstances 
clearly  shew  that  such  was  the  understanding  of  the  parties.  4 
Nevertheless,  taking  the  check  imposes  upon  the  party  receiv- 
ing it  the  duty  of  using  diligence  to  obtain  the  money  on  it; 
and  if  he  be  guilty  of  laches  in  this  respect,  whereby  the 

1  Howard  v.  Chapman,  4  Car,  and  Payne,  508. 

3  Lobdell  v,  Hopkins,  5  Cowen  R.,  516-,  Wilmouthv.  Fatten,  2  Bibb  (Ken.) 
R.,  280;  Mason  v.  Briggs,  16  Mass.,  453. 

8  5  Cowen,  518;  Rice  v.  Churchill.  2  Denio,  145. 

4  Olcott  v.  Rathbone,  5  Wend.,  490;  Keen  v.  Dufresne,  3  Serg.  and  Rawle, 
233;  Russell  v.  Hankley,  6  Termf  R.,  12;  9  John.  R.,  310;  M'Intyre  v.  Ken- 
nedy, Childs  &  Co,,  Amer.  Law.  Reg.,  433;  May  No.  of  1857. 


PAYMENT.  551 

drawer  is  injured,  it  will  operate  as  a  payment  and  discharge,  i 
Moreover,  where  there  are  indorsers  on  the  note  surrendered, 
the  taking  of  a  check  may  operate  prejudicially  to  the  holder; 
for  when  the  indorser  is  called  upon  to  pay,  he  has  a  right  to 
demand  a  delivery  of  the  note.  Hence  it  is  not  advisable  to 
accept  a  doubtful  or  uncertified  check  in  payment  of  a  bill  or 
note,  though  it  does  not  operate  as  an  extinguishment  of  the 
indebtedness.  2 

Suppose  again  the  holder  of  a  note  or  bill  takes  bank  bills 
in  payment,  and  it  turn  out  that  the  bank  issuing  them  had 
failed  before  they  were  so  received;  is  this  such  a  payment 
as  will  extinguish  the  liability  of  the  party  making  it  ? 
According  to  the  decisions  of  this  state,  the  answer  is  it  will 
not.  3  Such  bills  are  often  of  no  more  value  than  forged  or 
counterfeit  bills;  and  it  is  well  settled  that  these  are  no  pay- 
ment, unless  the  party  receiving  neglects  to  return  them  with- 
out any  unnecessary  delay.  4  It  is  a  case  of  mistake  by  both 
parties — tne  one  paying  and  the  other  receiving  a  bank  bill 
supposing  it  to  be  good  and  genuine,  when  in  truth  it  was  the 
bill  of  a  broken  bank  or  counterfeit. 

The  custom  of  merchants  requires  that  the  holder  of  a  bill 
shall  present  the  instrument  at  its  maturity  to  the  acceptor, 
demand  payment  and  upon  receipt  of  the  money  deliver  up 
the  bill. :  5  if  he  departs  from  this  custom,  and  especially  if 
he  takes  a  draft  on  a  banker,  or  any  other  security  whereby 
the  time  of  payment  is  extended,  though  only  till  the  next 
morning,  the  drawer  and  indorsers  will  be  discharged.  But 

1  Cromwell  v.  Wing,  1  Hall,  56. 

»  Ward  v.  Evans,  12  Mod.,  621;  2  Show.,  896;  Powell  v.  Roche,  cited  by 
Chitty,  6  Esp.,  76. 

*  Lightbody  v.  Ontario  Co.  Bank.  11  Wend.  R.,  9;  see  also  the  cases  there 
cited. 

4  2  John.  R.,  455;  Thomas  v.  Todd,  6  Hill  R.,  840.  In  Scruggs  T.  Gass,  8 
Terg.,  175,  it  was  held  that  payment  made  and  received  in  the  notes  of  a  bank 
that  had  failed,  but  was  supposed  to  be  good,  is  valid.  See  also  2  Porter, 
280. 

•  Hansard  v.  Robinson,  7  Barn,  and  Cress.,  90.     This  case  decides  that  an 
indorsee  cannot  recover  against  the  acceptor  at  law  without  producing  and 
surrendering  the  bill,  though  the  bill  be  lost  after  its  maturity.     8  Barb.  R., 
408. 


552  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

if  the  time  of  payment  is  not  extended  and  the  holder  retains 
possession  of  the  bill  so  that  he  is  ready  to  surrender  it  on 
payment  to  the  drawer  or  indorser,  and  the  demand,  protest 
and  notice  are  made  and  given  in  due  time,  there  is  no  reason 
why  the  taking  of  a  check  on  a  bank  as  a  means  of  obtaining 
the  money  on  the  bill,  should  operate  to  discharge  any  of  the 
parties  thereto,  i 

On  the  same  ground  the  receipt  of  bank  bills  in  payment 
of  a  note  or  bill  would  operate  as  a  discharge  of  the  drawer 
and  indorsers,  notwithstanding  the  bills  received  instead  of 
money  were  absolutely  valueless,  in  case  of  any  delay  in  the 
time  of  demanding  payment,  or  other  conduct  of  the  holder 
by  which  the  drawer  or  indorser  is  deprived  of  the  opportu- 
nity of  paying  and  taking  up  the  note  or  bill,  and  having 
immediate  recourse  thereon  to  the  parties  liable  to  him.  2 
Bank  bills  are  not  money,  though  they  circulate  as  such  in 
the  ordinary  transaction  of  business,  by  the  mutual  consent 
of  the  parties  delivering  and  receiving  them  in  payment. 

As  between  the  holder  and  the  maker  of  a  note  or  the 
acceptor  of  a  bill,  the  same  principle  applies  as  in  the  case  of 
any  other  indebtedness;  and  it  is  well  established  that  the 
taking  of  a  note  or  draft  or  check  is  no  payment,  unless  the 
parties  make  it  such  by  express  and  positive  agreement.  3  A 
note  of  the  debtor,  though  receipted  as  cash,  is  not  an  abso- 
lute payment;  nor  is  the  note  of  a  third  person,  unless  it  be 
expressly  accepted  as  payment.  4  But  the  creditor  receiving 

1  Story  on  Bills,  §  419,  seems  to  express  a  contrary  opinion.  But  Mr. 
Chitty  says,  "  Payment  is  frequently  made  by  a  draft  on  a  banker;  in  which 
case,  if  the  person  receiving  the  draft  do  not  use  diligence  to  get  it  paid,  the 
person  from  whom  he  received  it,  and  every  other  party  to  the  bill  will  be  dis- 
charged, but  not  otherwise,  unless  the  holder  expressly  agreed  to  run  all 
risks;  for  a  banker's  check  is  not  money." 

4  Ontario  Bank  v.  Lightbody,  13  Wend.,  101;  Story  on  Notes,  §  502.  An 
agreement  between  the  holder  and  maker  of  a  note,  making  the  receipt  of 
bank  bills  operate  as  payment  in  place  of  money,  manifestly  can  have  no  effect 
•whatever  upon  the  contract  of  the  indorser. 

3  5  John.  R.,  68;  7  id.  311;  9  id.  310;  15  id.  224;  8  id.  389:  6  Barb.,  244; 
5  Wend.,  490;  5  Denio,  360;  3  Comst.,  168. 

4  Tobey  v.  Barber,  5  John.  R.,  68.     Such  a  receipt  may  be  explained  or 
even  contradicted.     St.  John  v.  Purdy,  1  Sand.  R-,  9>  5  Wend.,  85. 


PAYMENT.  553 

a  draft  drawn  by  his  debtor  on  a  third  person,  may  make  it 
his  own  by  his  laches,  or  by  taking  some  other  security  in  its 
stead,  i 

When  bills  are  taken  in  payment  of  a  debt,  and  the  creditor 
sues  on  the  original  consideration,  payment  of  the  bill  will 
be  presumed  until  the  contrary  appear.  2  And  when  a  cred- 
itor takes  from  his  debtor  a  check  on  a  bank  or  a  negotiable 
note,  he  cannot  recover  on  the  original  consideration  without 
shewing  the  check  to  have  been  dishonored,  or  surrendering 
the  note  to  be  cancelled.  3  A  check  drawn  payable  to  the 
order  of  the  creditor  and  indorsed  by  him,  produced  by  the 
debtor,  is  evidence  of  the  payment  of  so  much  money;  4  and 
proof  of  the  delivery  of  the  check  to  him  in  payment  of  the 
debt,  though  payable  to  bearer,  and  the  production  of  it  by 
the  drawer  will  raise  the  presumption  that  the  person  to  whom 
it  was  delivered  received  the  money  on  it.  5 

At  common  law,  where  the  payee  or  holder  of  a  promissory 
note  or  bill  of  exchange  appoints  the  maker  or  acceptor  his 
executor,  the  debt  is  discharged;  and  therefore  no  action  at 
law  can  be  maintained  on  the  note  or  bill,  even  by  a  person 
to  whom  the  acceptor  has  indorsed  it.  6  But  in  equity  the 
executor  is  accountable  for  the  amount  of  his  debt  as  assets, 
in  case  it  is  required  for  the  payment  of  the  creditors  of  the 
deceased;  if  not  so  required  the  debt  is  discharged.  7  The 
creation  and  acceptance  of  the  trust  operate  as  a  release  or 
extinguishment  of  the  debt,  or  the  action  for  it,  upon  the 
ground  that  such  must  have  been  the  intention  of  the  testa- 
tor; because,  by  making  the  debtor  an  executor,he  voluntarily 

1  Southwick  v.  Sax,  9  Wend.,  122;  Nixsen  v.  Lyell,  6  HID,  466;  White  T. 
Howard,  1  Sand.  R.,  81;  23  Wend.,  845. 

*  Duffield  v.  Creed,  6  Esp.  R.,  52. 

•  Holmes  v.  D'Camp,  1  John.  R.,  84;  10  id.  104;  15  id.  247;  Perce  T.  Da?U, 

1  Mood,  and  Rob..  365. 

4  Egg  v.  Barnet,  3  Esp.  R.,  196. 

*  Aubert  v.  Welsh,  4  Taunt.,  298;  4  Esp.  R.,  9. 

•  Freakley  v.  Fox,  9  Barn,  and  Cress.,  180;  Berry  v.  Usher,  11  Ve».,  87. 
The  rule  is  different  under  the  statutes  of  this  state. 

7  Story  on  Notes,  §  444;  Marvin  v.  Stone,  2  Cowen,  781;  Decker  T.  Miller, 

2  Paige  Ch.  R.,  149;  Gardner  v.  Gardner,  7  id.  112;  22  Wend.,  626. 

33 


554  BILLS    OF   EXCHANGE  AND  PROMISSORY    NOTE*. 

destroys  the  only  remedy  or  means  by  which  the  debt  can  be 
collected.  And  the  consequence  is  the  same,  if  the  debtor  is 
a  co-executor  with  others;  for  one  executor  cannot  sue 
another,  i 

In  this  state,  it  is  provided  by  statute  that  the  naming  of 
any  person  executor  in  a  will  shall  not  operate  as  a  dis- 
charge or  bequest  of  any  just  claim  or  debt  due  from  him  to 
the  testator.  2 

Application  of  payments.  If  a  debtor  owe  his  creditor 
several  debts  upon  distinct  causes,  and  pays  him  a  sum  of 
money,  he  (the  payer,)  has  a  right  to  say  to  which  debt  or 
debts  the  money  shall  be  appropriated,  provided  he  directs 
this  at  the  time  of  payment;  but  if  he  does  not  so  direct,  the 
creditor  may  apply  it  as  he  pleases.  3  Where  there  are  two 
demands,  and  the  debtor  pays  a  sum  exactly  equal  to  one  of 
them,  it  will  be  considered  as  having  been  paid  in  discharge 
of  that.  4  If  one  be  due,  while  the  other  is  not,  the  payment 
applies  to  the  former.  5 

In  respect  to  indefinite  payments,  there  are  numerous  and 
conflicting  decisions.  In  a  case  of  considerable  interest, 
decided  in  this  state,  Chancellor  Walworth  states  the  law  on 
the  subject  in  these  terms :  Some  of  the  fundamental  princi- 
ples of  the  civil  law  appear  to  have  been  adopted  everywhere, 
and  to  admit  of  no  doubt :  1 .  If  both  debts  are  due  at  the 
time  of  the  partial  payment,  the  debtor  is  at  liberty  to  apply 
the  payment  to  which  he  pleases,  if  his  intention  is  manifested 
at  the  time  of  the  payment;  subject  to  this  restriction, 

1  Per  Sutherland,  Justice,  in  Marvin  v.  Stone,  supra.    The  qualification  to 
the  rule  is  based  on  this  reason ;  the  law  will  not  allow  a  voluntary  release  to 
deprive  creditors  of  their  just  claims. 

2  2  R.  S.,  146,  3d  ed. 

8  Mann  v.  Marsh,  2  Caines  R.,  99;  Edwards  on  Bailm.,  233;  Reed  v.  Board- 
man,  20  Pick.,  441 ;  Mitchell  v.  Dull,  4  Gill,  and  John.,  361 ;  Logan  v.  Mason, 
6  Watts  and  Serg.,  9;  Washington  Bank  v.  Prescott,  20  Pick.,  339;  Van 
Rensselaer  v.  Roberts,  5  Denio,  470. 

4  Robert  v.  Garnie,  3  Caines  R.,  14;  Stone  v.  Seymour,  15  Wend.,  19. 

'Bacon  v.  Brown,  1  Bibb,  334;  Seymour  v.  Sexton,  10  "Watts,  255; 
McDowell  v.  Canal  Co.,  5  Mason,  11. 


PAYMENT.  555 

however,  that  the  creditor  is  not  obliged  to  receive  a  partial 
payment  of  any  particular  debt,  of  which  the  whole  is  due  at 
the  time  the  offer  of  payment  is  made.  2.  Where  the  debtor 
neglects  to  manifest  his  intention  as  to  the  application  of  the 
payment,  at  the  time  it  is  made,  the  creditor  may,  at  the  time 
he  receives  the  money,  apply  it  to  which  debt  he  pleases, 
unless  the  debtor  objects;  the  creditor  manifesting  his  inten- 
tion at  the  time,  either  in  the  acquittance  which  he  gives,  or 
in  some  other  way.  3.  If  a  partial  payment  is  made,  on 
account  of  debts,  one  part  of  which  consists  of  the  principal, 
and  the  other  of  interest  or  compensation  due  for  the  use  of 
the  capital  of  such  debts,  so  much  of  the  payment  as  is  neces- 
sary to  satisfy  the  interest,  or  arrears  then  due,  shall  be  first 
applied  for  that  purpose,  and  the  residue  only  shall  go  to 
reduce  the  amount  of  the  principal  debt.  These  rules  pre- 
vailed in  the  Roman  or  civil  law,  and  are  now  the  settled  law 
of  France,  Spain,  Holland,  Scotland,  England,  and  the  United 
States."  i 

There  is  a  class  of  cases  in  which  the  courts  have  shewn  a 
disposition  to  make  the  application  of  payments,  unappro- 
priated by  either  party,  upon  principles  of  equity,  with  a  view 
to  all  the  circumstances,  without  laying  down  any  settled  and 
uniform  rule.  2 

1  Stone  v.  Seymour,  supra,  and  authorities  there  cited.  The  Chancellor 
cites  with  approbation  the  principle  laid  down  by  Chief  Justice  Marshall,  in 
Field  v.  Holland,  6  Cranch,  27,  that  the  debtor  by  omitting  to  make  the  appli- 
cation himself  tacitly  surrenders  the  right  to  the  creditor,  and  enables  him  to 
apply  the  payment  in  such  manner  as  he  shall  think  proper,  provided  such 
application  is  not  inequitable;  and  that  if  he  omit*  to  make  the  appropriation, 
the  court  upon  whom  the  exercise  of  the  power  devolve*  should  make  the 
application  upon  equitable  principles.  See  also  Cowperthwaite  v.  Sheffield,  1 
Sand.  R.,  416,  where  the  opinion  of  the  Chancellor  is  quoted  with  approbation. 

•  Mills  v.  Fowkes,  7  Scott's  R.,  444;  5  Bing.  N.  C.,  466.  Where  a  creditor 
has  two  several  demands  against  his  debtor,  one  barred  by  the  statute  of 
limitations,  the  other  not,  a  part  payment,  to  take  the  case  out  of  the  opera- 
tion of  the  statute,  must  be  expressly  made  on  account  of  the  older  debt. 
But  in  the  absence  of  any  express  appropriation  by  the  debtor  at  the  time  of 
making  it,  the  creditor  is  at  liberty  to  appropriate  the  payment  towards  satis- 
faction of  that  portion  of  the  debt  which  the  statute  would  bar.  Tindal,  C. 
J.,  declares  in  this  case  that  the  rule  of  the  civil  law  to  apply  a  payment  to 
the  most  burdensome  debt  is  not  recognized  by  the  common  law,  and  that 


556  BILLS    OF  EXCHANGE  AND   PROMISSORY   NOTES. 

Where  there  are  no  special  circumstances  shewn  calling  for 
equitable  consideration,  and  general  payments  are  made  that 
are  not  applied  by  either  party,  the  law  will  make  the  applica- 
tion; and  in  doing  so,  will  apply  the  payment  to  the  extin- 
guishment of  the  oldest  debt,  i  If  the  intention  of  the  party 
entitled  to  make  the  application  can  be  ascertained,  or  fairly 
infered  from  the  facts  disclosed,  it  has  been  held  in  one  case 
that  the  application  should  be  made  according  to  such  pre- 
sumed intention;  and  this  is  certainly  good  law  where  the 
intention  has  been  evidenced  in  due  time  by  some  act  of  the 

1  Fairchild  v.  Holly,  10  Conn.  R.,  175;  The  United  States  v.  Kirkpatrick, 
9  Wheat. ,720;  Meggot  v.  Mills,  1  Ld.  Raym.,  286;  Simson  v.  Ingham,  2 
Barn,  and  Cress.,  65;  Clayton's  case,  1  Meriv.,  584,  610;  Brooke  v.  Enderly 
and  al.,  2  Brod.  and  Bing.,  70;  4  Mason  R.}  333;  4  Harr.  and  John.  R.,  351; 
Truscott  v.  King,  2  Selden  R.,  147. 


where  both  of  the  parties  omit  to  make  the  appropriation  the  law  applies  the 
payment  to  the  earlier  items  in  the  account;  and  cites  Goddard  v.  Cox,  2  Str., 
1194,  and  several  other  cases. 

Philpott  v.  Jones,  2  Ad.  and  E.,  41.  In  this  case  where  the  creditor  had 
two  demands,  one  a  legal  and  collectable  debt,  and  the  other  for  spirits  on 
which  the  law  gave  him  no  cause  of  action,  and  the  debtor  made  a  general 
payment  without  specifying  on  which  account,  it  was  held  that  the  creditor 
had  a  right  to  apply  it  to  the  payment  of  the  last  mentioned  debt.  Contra, 
14  N.  Hamp.,  431. 

In  Peters  v.  Anderson,  5  Taunt.,  596.  Where  two  debts  were  due  to  the 
plaintiff,  one  on  a  covenant,  the  other  on  a  simple  contract,  and  payments  had 
been  made  generally  on  account,  the  plaintiff  was  permitted  to  ascribe  those 
payments  to  the  defendant  for  which  he  had  the  worse  security.  The  same 
rule  was  held  in  Bosanquet  v.  Wray,  6  Taunt.,  597,  where  the  creditor  was 
permitted  to  apply  a  general  payment  to  the  discharge  of  a  prior  purely 
equitable  debt,  and  sue  at  law  for  the  later  legal  debt. 

Smith  v.  Loyd,  11  Leigh  (Virginia,)  R.,  512.  Where  there  are  several 
debts  due  from  the  debtor  to  the  creditor,  and  general  payments  are  made 
without  specifying  on  which  account,  and  no  appropriation  is  made  by  the 
creditor,  there  is  no  settled  rule  of  application;  and  the  court  in  such  a  case 
will  apply  the  payments  according  to  the  justice  of  the  particular  case,  with 
a  view  to  all  the  circumstances ;  if  the  debts  are  all  due  the  payments  are  to 
be  applied  so  as  to  extinguish  the  debts  according  to  priority  of  time.  Decided 
in  1841. 

Merrimack  Co.  Bank  v.  Brown,  12  N.  Hamp.,  321.  The  principles  of  equity 
respecting  the  application  of  payments  are  recognized  in  proceedings  at  law, 
as  far  as  the  nature  of  the  proceedings  will  admit.  And  where  the  creditor 


PAYMENT.  557 

party,  i  Otherwise  it  is  no  more  than  saying  that  the  applica- 
tion shall  be  made  for  the  benefit  of  one  or  the  other  of  the 
two  parties,  in  the  discretion  of  the  court.  If  the  understand- 
ing of  both  of  the  parties  can  be  ascertained,  the  application 
becomes  a  matter  of  agreement,  and  no  longer  requires  a  judi- 
cial appropriation;  so  if  the  debtor  declares  on  what  account 
the  payment  is  made,  or  if  he  waives  that  right,  and  the 

1  Bank  of  Portland  v.  Brown,  22  Maine  R.,  295.  In  the  case  of  an  involun- 
tary payment,  the  debtor  has  no  right  to  direct  how  the  payment  shall  be 
applied.  "  Are  there  any  facts  in  this  case  from  which  we  can  infer  what 
must  have  been  the  intention  of  the  plaintiffs,  as  to  the  application  of  the 
payment  obtained  by  them  ?  The  four  thousand  dollar  note  was  due  to  the 
plaintiffs  absolutely.  The  two  thousand  and  eighty  dollar  note,  indorsed  by 
the  defendant,  and  on  which  this  action  is  brought,  was  held  by  them  as  col- 
lateral security  merely.  Now  other  considerations  being  equal,  and  it  does 
not  appear  that  they  were  not,  it  would  seem  to  be  presumable  that  the  plain- 
tiffs would  apply  the  payment,  in  the  first  instance  to  a  note  absolutely  due  to 
them,  rather  than  to  one  transfered  to  them  as  collateral  security  only.  We 
are,  therefore,  led  to  the  conclusion  that  the  plaintiffs  are  entitled  to  recover." 

There  being  no  direct  application  of  payment,  they  are  to  be  appropriated 
according  to  the  presumed  intention  of  the  parties,  to  be  collected  from  all 
the  facts.  Chitty  v.  Naish,  2  Dowl.  P.  C.,  611;  Brazier  v.  Bryant,  3  id. 
477. 

Emery  v.  Tickart,  8  Vt.,  15.  When  payments"are  not  applied  by  the  payer 
at  the  time,  nor  by  the  payee  afterwards,  the  court  are  to  make  the  applica- 
tion, according  to  the  understanding  of  the  parties,  when  that  can  be  ascer- 
tained by  a  fair  inference  from  the  facts  disclosed.  Selick  v.  Turnpike  Co., 
13  Conn.  R.,  453;  Rousseau  v.  Coll,  14  Vt.,  83;  White  v.  Trumbull,  8  Green., 
314;  McFarland  v.  Lewis,  2  Scam.,  844;  West  Branch  Bank  v.  Moorehead,  6 
Watts  and  Serg.,  542;  3  Watts  and  Serg.,  550.  The  application  of  payment 
by  the  debtor  is  to  be  ascertained  as  a  question  of  fact,  and  determined  by  the 
jury  upon  the  evidence,  under  the  direction  of  the  court. 


holds  a  mortgage  to  secure  two  or  more  notes,  on  some  of  which  the  mort- 
gagor is  principal  alone,  while  on  one  he  is  joint  principal  with  another  person, 
the  creditor  cannot  apply  the  proceeds  of  a  sale  under  the  mortgage  in  pay- 
ment of  the  whole  of  the  joint  note  to  the  prejudice  of  the  sureties  on  the 
other  notes.  The  law  in  this  case  applies  the  mortgaged  property  to  the  pay- 
ment of  the  debt  of  the  mortgagor.  Decided  in  1841. 

In  Moss  v.  Adams,  4  Iredell's  Eq.  R.,  42,  there  being  payments  made  on 
different  accounts,  but  no  appropriation  of  them  by  either  party,  the  court 
applied  them  to  that  debt  for  which  the  creditor's  security  was  most  preca- 
rious. The  same  rule  was  acted  on  in  Jones  v.  Kilgore,  2  Rich.  Eq.  R.,  68; 
see  also  Baine  v.  Williams,  10  Smedes  and  Marsh.,  113. 


558  BILLS  OF    EXCHANGE  AND   PROMISSORY  NOTES. 

creditor  applies  the  payment  to  either  of  the  accounts,  it  is 
no  longer  open  for  controversy. 

In  making  the  application  of  general  payments  the  creditor 
is  bound  to  respect  the  rights  of  a  surety.  For  instance,  if 
the  creditor  holds  a  mortgage  as  security  for  the  payment  of 
several  notes,  one  of  which  is  made  by  the  debtor  and  a  third 
person  jointly,  and  two  of  which  are  guaranteed  by  a  surety, 
he  cannot  appropriate  the  proceeds  of  the  mortgaged  premises 
to  the  payment  of  the  joint  note  solely,  i  But  when  a  bond 
is  given  for  a  public  officer,  conditioned  that  he  shall  faith- 
fully pay  over  such  moneys  as  may  come  into  his  hands  in 
that  capacity,  the  surety  cannot  require  that  subsequent  pay- 
ments shall  be  applied  to  the  credit  of  his  principal  on  a 
former  term,  to  the  prejudice  of  sureties  on  a  new  bond.  2 
And  in  all  such  cases,  where  the  parties  themselves  have 
omitted  to  make  any  specific  appropriation  of  payments,  the 
law  will  appropriate  them  according  to  the  justice  and  equity 

1 12  N.  Hamp.,  321;  see  also  Cage  v.  Her,  5  Smedes  and  Marsh.,  410;  and 
Donally  v.  Wilson,  5  Leigh,  329. 
\15  Wend.  R.,  19. 


In  this  state  where  payments  on  a  running  account  are  not  specifically 
applied  by  the  parties,  equity  will  apply  them  to  the  earliest  items,  even 
though  the  creditor  has  security  for  those  items,  and  none  for  the  later  ones, 
Truscott  v.  King,  2  Selden  R.,  147. 

Upham  and  others  v.  Lefavour,  11  Met,,  174,  The  rule  that  payments  are 
to  be  applied  to  the  earliest  items  of  debt,  does  not  apply  where  the  creditor 
having  the  right  to  do  so  actually  makes  a  different  appropriation ;  and  the 
creditor  may  apply  a  payment  to  a  debt  that  is  not  secured  where  he  is  not 
prohibited  from  doing  so  by  any  established  rule  of  appropriation.  Decided 
in  1846. 

Caldwell  v.  Wentworth,  14  N.  Hamp.,  431.  If  a  debtor  pays  money  on  an 
illegal  demand,  such  as  a  demand  for  spirituous  liquors  illegally  sold,  he 
cannot  afterwards  insist  upon  the  payments  being  applied  to  a  legal  debt  due 
to  the  same  person;  but  where  he  makes  no  application  the  payment  will  be 
applied  to  the  lawful  instead  of  the  unlawful  debts.  Decided  in  1843, 

Postmaster  General  v.  Furber,  4  Mason  R.,  333.  Where  there  is  a  running 
account,  and  payments  are  made  upon  it,  they  are  to  be  applied  to  extinguish 
antecedent  items  on  the  debit  side.  It  is  the  first  item  on  the  debit  side  of 
the  account  that  is  discharged  or  reduced  by  the  first  item  on  the  credit  side. 
The  same  rule  was  applied  in  Allston  v.  Contee,  4  Harr.  and  John.,  351. 


PAYMENT.  55$ 

of  the  case,  for  the  benefit  of  both  parties,  including  sureties 
and  guarantors.  But  as  a  general  rule,  any  application  made 
by  the  party,  entitled  at  the  time  to  make  such  application,  is 
binding  upon  all  the  parties,  i 

Where  a  person  is  indebted  individually  and  also  jointly 
with  another,  to  the  same  man,  on  two  separate  accounts,  and 
pays  money  to  him  without  specifying  on  which  it  is  to  be 
applied,  the  creditor  is  at  liberty  to  apply  the  payment,  other 
things  being  equal,  to  the  joint  or  several  debt,  as  he  may 
choose.  2  But  when  there  are  distinct  demands,  one  against 
persons  in  partnership,  and  another  against  only  one  of  the 
partners,  if  the  money  paid  be  the  money  of  the  partners,  the 
creditor  is  not  at  liberty  to  apply  it  to  the  payment  of  the 
debt  of  the  individual;  that  would  be  allowing  the  creditor 
to  pay  the  debt  of  one  person  with  the  money  of  others.  3 

When  a  person  has  two  demands,  one  for  goods  sold  recog- 
nized by  law,  the  other  arising  on  an  usurious  loan  forbidden 
by  law,  and  an  unappropriated  payment  is  made  to  him,  the 
law  will  afterwards  appropriate  it  to  the  demand  which  it 
acknowledges,  and  not  to  the  demand  which  it  prohibits.  4 
There  is,  however,  a  clear  distinction  between  an  illegal  debt 
and  one  that  has  been  barred  by  the  statute  of  limitations; 
for  in  respect  to  the  latter,  it  is  held  that  the  creditor  may 
appropriate  a  general  payment  to  such  a  demand,  and  the 
rule  of  law  is  to  appropriate  such  payments  to  the  earliest 
debt.  5  On  the  same  principle,  the  creditor  is  permitted,  in 
England,  to  apply  a  general  payment  on  an  unstamped  bill 

1  Allen  v.  Culver,  8  Denio,  284.  In  this  case  the  creditor  holding  a  guar- 
anty for  the  payment  of  rent,  and  having  another  account  with  his  tenant, 
included  the  rent  in  the  account  rendered,  and  it  waa  held  that  the  guarantor 
was  entitled  to  insist  upon  the  appropriation  so  made. 

•  Van  Rensselaer's  Ex'rs  v.  Roberts,  6  Denio,  470;  Baker  T.  Stackpole,  9 
Cowen,  420,  436. 

1  Thompson  v.  Brown.  1  Moody  and  Malkin,  40. 

*  Wright  v.  Laing,  3  Barn,  and  Cress.,  165.     See  th«  case  put  by  Ch.  J. 
Abbott,  illustrating  the  principle  of  appropriation  applicable  to  such  circum- 
stances. 

5  Mills  v.  Fowkea.  7  Scott's  R.,  444;  5  Bing.  N.  C.,  466- 


560  BILLS    OF  EXCHANGE   AND   PROMISSORY  NOTES. 

of  exchange,  notwithstanding  he  holds  another  stamped  bill 
on  which  the  law  gives  him  a  right  of  action,  i 

There  are  cases  in  which  the  creditor,  having  an  election  in 
respect  to  the  appropriation  of  payments  and  exercising  it,  is 
held  to  waive  a  right  secured  to  him  by  law;  as  when  a  firm 
holds  a  bond  as  security  for  advances  to  be  made  for  a  corres- 
pondent, and  one  of  the  firm  dies,  leaving  a  balance  due 
secured  by  the  bond,  and  the  survivors  take  in  a  new  partner 
and  continue  the  same  account  with  the  correspondent  until 
the  latter  has  advanced  a  sum  sufficient  to  cancel  the  original 
indebtedness,  while  incurring  a  further  indebtedness;  by  this 
appropriation  of  subsequent  payments  the  bond  is  discharged.  2 

1  Biggs  v.  Dwight,  1  Man.  and  Ry.,  308.     But  in  this  case  there  was  evi- 
dence from  which  an  agreement  between  the  parties  so  to  apply  the  payment, 
might  have  been  inferred. 

2  Bodenham  v.  Purchas,  2  Barn,  and  Aid.,  39.    A  bond  was  given  to  the 
several  persons  constituting  the  firm  of  a  banking  house,  conditioned  for  the 
repayment  of  the  balance  of  an  account,  and  of  such  further  sums   as  the 
bankers  might  advance  to  the  obligor;,  one  of  the  partners  dies,  and  a  new 
partner  is  taken  into  the  firm;  at  that  time  a  considerable  balance  is  due  from 
the  obligor  to  the  firm ;  advances  are  afterwards  made  by  the  bankers,  and 
payments  made  to  them  on  account,  by  the  obligor;  the  latter  is  credited  by 
the  new  firm  with  the  several  payments,  and  charged  with  the  original  debt 
and  subsequent  advances  as  constituting  items  in  one  entire  account,  and  the 
balance  due  at  the  time  of  the  partner's  death  is  considerably  reduced,  and 
that  reduced  balance,  by  order  of  the  obligor  is  transfered  by  the  bankers  to 
the  account  of  another  customer,  who  with  his   assent  is  charged  with  the 
then  debt  of  the  obligor.     The  person  so-  charged  having  become  insolvent, 
the  surviving  partners  of  the  original  firm  brought  their  action  upon  the  bond. 
Held,  that  as  they  had  not  originally  treated  it  as  a  distinct  account,  but  had 
blended  it  in  the  general  account  with  other  transactions,  they  were  not  at 
liberty  so  to  treat  it  at  a  subsequent  period ;  and  that  having  received  in  dif- 
ferent payments  a  sum  more  than  sufficient  to  discharge  the  debt  due  upon 
the  bond  at  the  time  of  the  death  of  the  deceased  partner,  the  bond  was  to 
be  considered  as  paid.     Bayley,  J.,  "I  cannot   distinguish  this  in  principle 
from  Clayton's  case.     The  decisions  in  the  courts  of  law  do  not  break  in  upon 
the  distinction  there  taken.     The  principle  established  by  those  decisions  is 
this,  that  where  there  are  distinct  accounts  and  a  general  payment,  and  no 
appropriation  made  at  the  time  of  such  payment  by  the  debtor,  the  creditor 
may  apply  such  payment  to  which  account  he  pleases;  but  where  the  accounts 
are  treated  as  one  entire  account  by  all  parties,  that  rule  does  not  apply," 
Abbott,  J.,  "Presumably  it  is  the  sum  first  paid  in  that  is  first  drawn  out. 
It  is  the  first  item  on  the  debit  side  of  .the  account  which  is  discharged  or 
reduced  by  the  first  item  on  the  credit  side."    See  Clayton's  case,  1  Merivale, 
572. 


PAYMENT.  561 

But  the  election  or  appropriation  by  the  creditor  is  not 
made  by  an  entry  in  his  own  private  books,  and  is  not  lost  to 
him  in  such  a  case  until  notice  of  the  appropriation  has  been 
communicated  to  the  opposite  party.     Thus,  for  example,  a 
bond  was  given  by  country  bankers  to  the  several  persons 
constituting  the  firm  of  a  London  banking-house,  conditioned 
for  remitting  money  to  provide  for  bills,  and  for  the  repay- 
ment of  such  sums  as  the  London  bankers  might  advance  on 
account  of  persons  constituting  the  firm  of  the  country  bank- 
ing-house, or  any  of  them,  associated  or  not  with  other  per- 
sons.    One  of  the  partners  in  the  country  bank  died,  a  con- 
siderable balance  being  then  due  to  the  London  bankers.     It 
was  the  course  of  business  between  the  two  houses  for  the 
London  bankers  to  send  in  to  the  country  bankers  monthly 
accounts  of  receipts  and  payments.     In  the  month  following 
the   death   of   the   deceased  partner,  the  London    bankers 
received  sums  in  payment  more  than  sufficient  to  discharge 
the  balance  then  due;  but  during  the  same  time  they  advanced 
money  on  account  of  the  country  bankers  to  an  equal  amount. 
In  the  first  instance   the  London  bankers  entered  in  their 
books  all  receipts  and  payments  made  after  the  death  of  the 
deceased  partner  to  the  account  of  the  old  firm,  but  they  did 
not  transmit  any  account  to  the  country  bankers  until  two 
months  after  the  death  of  the  deceased  partner,  and  then  they 
transmitted  two  distinct  accounts;  one  the  account  of  the  old 
firm,  made  up  to  the  day  of  the  death  of  the  partner;  and 
another,  a  new  account,  containing  all  payments  and  receipts 
subsequent  to  that  time  :     Held,  that  the  entries  in  the  books 
of  the  London  bankers  did  not  amount  to  a  complete  appro- 
priation by  them  of  the  several  payments  to  the  old  account, 
such  appropriation  not  being  complete  until  it  was  communi- 
cated to  the  party  to  be  affected  by  it;  and  therefore  that  the 
London  bankers,  notwithstanding  these  entries,  were  entitled 
to  apply  the  payments  received  subsequently  to  the  death  of 
the  deceased  partner  to  the  debt  of  the  new  firm.  1 

The   same  doctrine  has   been  held  in  this  state.     Thus, 
where  the  purchasers  of  certain  leased  premises  brought  an 

1  Simson  v.  Ingham,  2  Barn,  and  Cress.,  66. 


562  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

action  against  the  defendant  as  guarantor  of  the  covenants 
contained  in  the  lease,  and  sought  among  other  things  to 
recover  the  rent  thereof,  and  it  was  shewn  that  the  plaintiffs 
having  other  dealings  to  a  large  amount  with  the  tenant,  kept 
with  him  a  running  account  in  which  the  rent  was  regularly 
charged  as  it  became  payable,  and  that  no  demand  for  the 
payment  of  the  rent  was  made  in  any  other  way,  it  was  held 
that  the  rendering  of  an  account  current  containing  such 
charges  for  rent  amounted  to  an  election  on  the  part  of  the 
plaintiifs  to  appropriate  the  credits  therein  to  the  payment  of 
the  debit  side  of  the  account  in  the  order  of  time  in  which 
the  items  were  charged,  i  An  election  once  made  and  com- 
municated to  the  opposite  party,  is  binding  upon  the  party 
making  it. 

So  where  one  of  the  several  partners  dies,  and  the  partner- 
ship is  in  debt,  and  the  surviving  partners  continue  their 
dealings  with  a  particular  creditor,  and  the  latter  joins  the 
transactions  of  the  old  and  the  new  firm  in  one  entire  account, 
the  payments  made  from  time  to  time  by  the  surviving  part- 
ners must  be  applied  to  the  old  debt;  for  here  it  is  to  be  pre- 
sumed that  all  the  partners  have  consented  that  it  should  be 
considered  as  one  entire  account,  and  that  the  death  of  one  of 
the  partners  has  produced  no  alteration  whatever.  2 

1  Allen  v.  Culver,  3  Demo,  284. 

9  Per  Mr.  J.  Bayley,  2  B.  and  C.,  72.  The  continuance  of  the  account  is  a 
mode  of  consenting  that  the  credits  shall  be  applied  in  payment  of  the  debits 
in  the  order  as  charged  and  credited. 

Strange  and  others  v.  Lee,  8  East,  485.  Where  a  bond  by  A,  reciting  that 
B.  intended  to  open  a  banking  account  with  C,  D.  and  E.  as  his  bankers,  was 
conditioned  for  payment  to  them  of  all  sums  from  time  to  time  advanced 
to  B.  at  the  banking  house  of  C.  D.  and  E.  Held  that  on  C.'s  death  such 
obligation  ceased,  and  did  not  cover  future  advances  made  after  another  part- 
ner was  taken  in;  and  that  B.,  who  was  indebted  to  the  house  at  C.'s  death, 
having  afterwards  paid  off  the  balance  which  was  applied  at  the  time  to  the 
old  debt  incurred  in  C.'s  lifetime,  A.  was  wholly  discharged  from  his  obliga- 
tion. Decided  in  1803. 

Williams  v.  Griffith,  5  Mee.  and  Wels.,  300.  Where  in  an  action  for  the 
balance  of  a  banking  account,  the  question  between  the  parties  was  whether 
a  disputed  sum,  above  six  years  old,  had  been  paid  by  the  plaintiffs  with  the 
defendants  authority  or  not.  Held  that  the  jury  having  found  that  the  pay- 


PAYMENT.  563 

Where  the  drawer  of  a  bill  accepted  for  his  accommodation, 
procures  it  to  be  discounted  by  his  bankers,  and  after  it  is 
dishonored,  informs  them  that  it  was  accepted  for  his  accom- 
modation and  requests  them  not  to  apply  to  the  acceptor  for 
payment,  and  they  engage  to  look  to  the  drawer  for  payment, 
the  bankers  as  holders  of  the  bill  are  at  liberty  and  are  bound 
to  apply  the  drawer's  funds,  coming  into  their  hands,  in  pay- 
ment of  the  bill,  i  So,  when  a  customer  pays  in  to  his  bankers 
an  accommodation  note  and  informs  them  that  it  is  a  note 
made  for  his  accommodation,  and  requests  them  to  hold  it  over 
for  a  time  in  order  to  give  him  an  opportunity  to  make  col- 
lections, and  they  promise  to  do  so,  and  the  customer  afterwards 
pays  in  to  his  bankers  a  large  amount  without  making  any 
special  appropriation,  it  will  be  taken  to  have  been  paid  in  on 
the  aoxxmnt,  and  will  be  applied  in  payment  or  reduction  of 
the  accommodation  note.  2 

In  a  banking  account  there  is  no  room  for  any  other  appro- 
priation than  that  which  arises  from  the  order  in  which  the 
receipts  and  payments  take  place,  and  are  carried  into  the 
account.  Accordingly,  where  the  defendant  accepted  a  bill 
of  exchange  drawn  by  C,  who  indorsed  it  to  his  bankers,  and 
they  entered  it  on  the  credit  side  of  C's  account,  but  the  bill 
having  been  dishonored,  entered  it  afterwards  on  the  debit 
side;  and  a  few  days  after  this  dishonor,  the  defendant  paid 
to  C  the  amount  of  the  bill,  but  omitted  to  take  it  out  of  the 
banker's  hands,  and  C  having  subsequently  paid  to  the  banker 
enough  to  cover  the  bill,  including  all  previous  items  of  his 
indebtedness,  the  defendant  was  held  discharged.  3 

1  Marsh  and  another  v.  Houlditch,  cited  by  Chitty  on  Bills,  404;  see  Kings- 
ley  v.  Vernon,  4  Sand.  R.,  861. 

'  Hammersley  v.  Knowlys,  2  Esp.,  666. 

*  Field  and  others  v.  Carr,  6  Bing.  R.,  13.  The  action  was  brought  on  two 
bills  of  exchange  drawn  by  Thomas  Crawshaw,  on  the  defendant,  at  four 
months  date,  and  accepted  by  him.  They  were  given  for  the  price  of  certain 


ment  tca«  authorized  by  the  defendant,  the  plaintiffs  were  entitled  to  apply 
subsequent  unappropriated  payments  of  the  defendant  in  discharge  of  the 
sum  in  question,  so  aa  to  prevent  the  operation  of  the  statute  of  limitations. 


564  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

Though  the  accommodation  maker  of  a  note  or  acceptor  of 
a  bill  stands  in  the  relation  of  a  surety  towards  the  party  for 
whose  convenience  the  paper  is  made  or  accepted,  they  are 
nevertheless  considered,  in  courts  of  law,  as  the  principal 
debtors — as  the  parties  primarily  liable,  i  It  follows  that  an 
accommodation  maker  or  acceptor  can  only  be  discharged  at 
law  by  payment  or  release,  in  the  same  manner  as  they  are 
discharged  from  their  liability  on  ordinary  business  paper.  2 
But  if  the  party  for  whose  accommodation  the  bill  was 
accepted  or  the  note  was  made,  pays  it  at  maturity,  this  is  in 
effect  the  same  thing  as  payment  by  the  maker  or  acceptor  in 
the  case  of  business  paper;  for  the  party  paying,  having  no 
right  of  action  thereon  against  the  parties  accepting  or  making 
the  instrument,  cannot  transfer  any  better  title  after  maturity 
than  he  himself  possesses.  3  The  contrary  has  been  asserted, 
and  the  decisions  are  not  harmonious  j  but  if  the  drawer >  who 
is  ultimately  bound  to  pay  it,  actually  pays  and  takes  up  the 
bill  at  its  maturity,  there  does  not  seem  to  be  any  reason  for 
permitting  his  indorsee  of  the  dishonored  bill  to  recover  on  it. 
As  purchaser,  the  indorsee  takes  the  bill  disgraced,  and  is  pre- 

J3  Barb.,  634;  1  Campb.,  35;  13  East,  430;  Farqubar  and  others  v. 
Southey,  Mood,  and  M.,  14;  Patty  v.  Milne,  16  Wend.,  557.  A  person 
accepts  a  bill  for  the  accommodation  of  another,  and  the  latter  passes  it  to 
his  creditor  to  apply  in  payment  of  a  note ;  the  creditor  gets  the  acceptance 
discounted  and  sends  the  proceeds  to  the  acceptor  directing  him  to  pay  the 
note;  and  it  is  held  that  the  latter  is  bound  to  use  the  proceeds  as  directed. 
The  party  accommodated  tacitly  engages  himself  to  take  up  the  bill,  or  to 
furnish  funds  with  which  to  take  it  up,  or  to  indemnify  the  acceptor,  or  the 
accommodation  maker  of  the  note  as  the  case  may  be.  Reynolds  v.  Doyle, 
1  M.  and  G.;  2  Scott  N.  R.,  45.  But  the  accommodation  maker  and  acceptor 
stand  liable  on  the  paper  as  principals.  5  Taunton,  192,  551;  10  B.  and  C., 
578;  12  Serg.  and  Rawle,  382;  7  Wend.,  227;  2  Sand.,  115;  1  Hill,  513;  2 
Comst.,  469. 

9 1  Campb.,  35;  2  Stark.,  203. 

8  3  Cowen  R.,  252;  3  Barb.  Ch.  R.,  403. 


wool  purchased  by  the  defendant  of  C.  and  indorsed  by  C.  to  plaintiffs;  but 
the  ground  on  which  the  defendant  was  held  discharged  was  this,  the  plain- 
tiffs had  charged  ten  bills  in  account  against  C.  and  had  treated  them  as 
paid;,  they  had  in  fact  been  paid  by  defendant  to  C.,  though  left  in  the  hands 
of  the  plaintiffs. 


PAYMENT.  565 

sumed  to  take  it  on  the  credit  of  the  party  indorsing  it  to 
him;  i  and  it  is  agreed  that  if  he  expressly  stipulate  to  take 
up  and  cancel  the  bill  when  it  becomes  due,  he  cannot  after- 
wards reissue  it,  and  that  a  purchaser  with  notice  cannot 
recover  on  it  against  the  acceptor. 

Release  of  principal  debtor.  The  maker  and  acceptor  being 
primarily  and  ultimately  liable  to  pay  the  note  or  bill,  are  said 
to  stand  in  the  relation  of  principal  debtors  towards  the  other 
parties  to  the  instrument,  while  the  drawers  and  indorsers  are 
spoken  of  as  standing  in  the  position  of  sureties.  2  But  this 
language  is  not  strictly  accurate;  for  the  drawer  of  a  bill  and 
each  of  the  successive  indorsers,  whether  of  a  note  or  bill, 
being  charged  with  notice  of  non-payment  on  a  due  demand 
made,  is  bound  to  pay  the  amount  and  take  up  the  paper. 
He  cannot,  like  a  surety,  require  of  the  holder  active  diligence 
to  collect  the  money  of  the  party  primarily  liable  to  pay;  nor 
does  he  ordinarily  enter  into  the  contract  without  a  full  and 
valuable  consideration.  3  The  drawer  delivers  to  the  payee  a 
draft  on  a  third  person  in  payment  of  a  debt  due  or  for  money 
advanced,  and  undertakes  that  it  shall  be  paid  by  the  drawee; 
and  his  undertaking  is  that  of  a  principal  debtor.  The  payee 
indorses  it  over  to  another  person  for  value,  and  is  in  his  turn 
a  principal  debtor  to  his  indorsee,  and  to  the  subsequent 
holder.  So  in  respect  to  each  of  the  successive  indorsers,  in 
their  relation  towards  the  holder;  the  contract  of  each  becomes 
an  absolute  engagement  for  the  payment  of  the  sum  named  on 
the  happening  or  fulfilment  of  the  conditions  on  which  it  is 
made.  4 

1  Lazarus  v.  Cowie,  43  Com.  Law  R.,  819;  Jewell  v.  Parr,  76  id.  909;  81  id. 
684;  Mottv.Brown,  7  John  R.,  361;  Carruthersv.  West,  63  Com.  Law  R., 143. 

•  Byles  on  Bills,  190. 

•Beardsley  v.  Warner,  6  Wend.,  610;  8  id.  194;  Trimble  v.  Thome,  16 
John.  R.,  162. 

*  "  The  moment  the  note  is  dishonored,  and  notice  of  that  fact  duly  given  to 
the  indorser,  the  holder's  right  to  sue  him  is  perfect,  and  this  right  is  not 
impaired  as  long  as  he  remains  passive."    9  Cowen  R.,  206;  2  Bos.  and  Pull., 
62;  17  John.  R.,  393;  3  Wend.,  216.    In  Trimble  v.  Thome,  supra,  it  is  said 
"  an  indorser,  though  in  the  nature  of  a  surety,  is  answerable  upon  an  inde- 
pendent contract,  and  it  is  his  duty  to  take  up  the  bill  when  dishonored.'' 


566  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES 

There  is  in  some  respects  a  resemblance  between  an  indorser 
and  a  surety.  If  the  maker  of  a  note  or  the  acceptor  of  a 
bill  pays,  the  indorser  is  discharged  from  his  contract  in  the 
same  manner  as  is  a  surety  by  the  principal's  paying;  and  if 
the  creditor  does  any  act  impairing  the  indorsee's  right  to 
resort  to  the  maker  or  acceptor  for  indemnity  for  what  he  as 
an  indorser  has  become  liable  to  pay,  he  can  shew  such  act  in 
exoneration  of  himself  from  his  engagement  to  the  creditor,  i 
But  as  long  as  the  holder  is  passive,  all  his  remedies  remain  j 
for  he  owes  to  the  parties  that  have  been  properly  charged  as 
drawers  or  indorsers,  no  active  duty.  And  if  he  does  nothing 
to  deprive  either  of  them  of  his  immediate  right  of  recourse, 
the  relation  of  the  parties  will  continue  unchanged.  2 

Mere  indulgence  at  the  will  of  the  holder,  extended  to  the 
maker  of  a  note,  though  granted  on  the  receipt  of  securities 
for  the  demand,  does  not  at  all  impair  the  liability  of  an 
indorser.  3  Nor  does  an  agreement  made  by  the  holder  with 
the  maker  of  a  note  to  prosecute  the  indorser,  and  in  case  the 
money  is  not  collected  of  him  to  give  the  maker  time  on 
receiving  security,  discharge  the  indorser;  it  does  not  discharge 
the  latter,  because  it  does  not  deprive  him  of  his  remedy  over 
against  the  maker.  4  Nor  will  the  taking  of  a  new  security, 
such  as  the  note  of  a  third  person  payable  at  a  future  day,  on 
an  agreement  that  the  acceptance  of  such  note  as  collateral 
security  shall  not  prejudice  the  holder's  claim  against  the 
maker  and  indorser  of  the  principal  note,  nor  prevent  a  suit 
thereon  if  ordered  by  the  indorser,  operate  to  discharge  the 
latter. 5 

1  6  Wend.,  613;  Wood  v.  Jefferson  Co.  Bank,  9  Cowen  R.,  194;  Bank  of 
TJtica  v.  Ives,  17  Wend.,  501;  Sizer  v.  Heacock,  23  Wend.,  81;  Myers  v. 
Welles,  5  Hill  R.,  463. 

a  English  v.  Darby,  2  B.  and  P.,  62;  2  John.  Ch.  R.,  560. 

8  Bank  of  Utica  v.  Ives,  17  Wend.,  501.  The  maker  solicited  of  the  plain- 
tiff indulgence  to  arrange  his  affairs,  and  try  to  relieve  his  indorsers,  and  was 
given  to  understand  that  this  would  t>e  extended  to  him ;  and  at  the  same 
time  delivered  securities  to  the  plaintiff.  But  there  was  no  definite  contract 
made  for  time,  and  it  was  not  shewn  that  the  promise  of  indulgence  was 
founded  upon  the  new  securities. 

4  Wood  v.  Jefferson  Co.  Bank,  9  Cowen  R.,  194. 

6  Bailey  v  Baldwin,  7  Wend.,  289. 


PAYMENT.  567 

The  act  of  taking  a  new  security  from  the  maker  of  a  note, 
is  beneficial  to  the  indorser,  unless  it  be  accompanied  by  a 
valid  agreement  suspending  or  interfering  with  his  right  or 
remedy  against  prior  parties.  But  if  time  be  given  to  the 
maker  of  a  note,  though  not  in  express  words,  so  that  the 
holder  is  precluded  from  suing  the  maker,  it  is  a  discharge  of 
the  indorser.  Thus,  where  a  note  was  indorsed  for  the  accom- 
modation of  the  maker,  and  the  latter  deposited  it  with  a 
merchant  as  security  for  goods  to  be  purchased  from  time  to 
time,  and  on  a  settlement  of  the  account  between  the  maker 
and  the  vendor,  the  latter  took  from  the  purchaser  his  notes 
for  the  balance,  payable  at  a  future  day,  the  accommodation 
indorsers  were  held  discharged,  i  Accepting  a  note  of  the 
debtor  in  this  way,  is  equivalent  to  extending  the  time  of  pay- 
ment until  the  note  falls  due. 

By  entering  into  a  contract  with  the  maker  of  a  note  01 
with  the  acceptor  of  a  bill,  extending  the  time  of  payment, 
the  holder  tacitly  engages  to  give  the  same  credit  to  all  the 
parties  who  may  be  entitled  to  a  remedy  over  against  the 
maker  or  acceptor.  2  To  give  his  contract  legitimate  effect  is 
to  arrest  the  remedy  of  all  the  parties  liable  on  the  bill  or 
note,  and  thus  convert  the  contract  of  each  into  a  different 
undertaking.  The  owner  of  the  note  holds  in  his  hands 
several  distinct  contracts  for  the  payment  of  the  sum  specified, 
and  a  payment  by  the  party  ultimately  liable  is  a  release  of 
them  ally  and  hence  the  indorser  is  said  to  be  in  the  nature 
of  a  surety.  So  that  when  the  holder  enters  into  an  agree- 
ment with  the  maker  or  acceptor,  founded  on  a  good  conside- 
ration, giving  him  time  for  payment,  the  contract  operates  as 
a  release  of  the  drawer  and  indorsers.  3  But  a  contract  not 

1  Myers  v.  Welles,  6  Hill  R.,  463. 

1  Story  on  Notes,  §  414;  Chitty  on  Bills,  408-410. 

»  7  Wend.,  290;  17  Wend.,  501;  Gould  v.  Robson,  8  E»st  R.,  676;  Philpol 
T.  Briant,  4  Bing.  R.,  717.  The  acceptor  died  before  the  bill  became  due, 
and  his  executrix  asked  for  time  and  promised  verbally  in  that  case  to  pay  the 
bill  out  of  her  own  income,  and  time  was  given  without  the  knowledge  or  ecu- 
sent  of  the  drawer,  who  was  the  defendant.  Best,  C.  J.,  "  A  creditor  bf 
giving  further  time  of  payment,  undertakes  that  he  will  not,  during  the  time 
given,  receive  the  debt  from  any  surety  of  the  debtor,  for  the  instant  that  * 


568  BILLS   OF   EXCHANGE  AND    PROMISSORY  NOTES. 

based  upon  a  valid  consideration,  does  not  have  the  effect  of  a 
release;  for  delay  under  such  a  contract  is  in  the  eye  of  the 
law  merely  gratuitous,  i 

The  holder,  says  the  court,  has  the  dominion  of  the  bill 
at  the  time;  he  may  make  what  arrangements  he  pleases 
with  the  acceptor;  but  he  does  that  at  his  peril;  and,  if  he 

1  Philpat  v.  Briant,  4  Bing.  R.,  717;  McLemore  v.  Powell,  12  Wheat.  R., 
554;  1  Bos-  and  PulL,  652;  Walsh  v.  Bailey,  10  John.  R.,  180. 


surety  paid  the  debt  he  would  have  a  right  to  recover  it  against  his  principal. 
The  creditor,  therefore,  by  receiving  his  debt  from  the  surety  would  indirectly 
deprive  the  debtor  of  the  advantage  that  he  had  stipulated  to  give  him.  If 
the  creditor  had  received  from  his  debtor  a  consideration  for  the  engagement 
to  give  the  stipulated  delay  of  payment  of  the  debt,  it  would  be  injustice  to 
him  to  force  him  to  pay  it  to  any  one  before  the  day  given-  If  to  prevent  the 
surety  from  suing  the  principal,  the  creditor  refuses  to  receive  the  debt  from 
the  surety  until  the  time  given  to  the  debtor  for  payment  by  the  new  agree- 
ment, the  surety  must  be  altogether  discharged,  otherwise  he  might  be  in  a 
situation  worse  than  he  was  in  by  his  contract  of  suretyship.  If  he  be  allowed 
to  pay  the  debt  at  the  time  when  he  undertook  that  it  should  be  paid,  the 
principal  debtor  might  have  the  means  of  repaying  Mm.  Before  the  expira- 
tion of  the  extended  period  of  payment  the  principal  debtor  might  have  be- 
come insolvent.  A  creditor,  by  giving  time  to  the  principal  debtor,  in  equity, 
destroys  the  obligation  of  the  sureties ;  and  a  court  of  equity  will  grant  an 
injunction  to  restrain  a  creditor  who  has  given  further  time  to  the  principal, 
from  bringing  an  action  against  the  surety.  This  equitable  doctrine  courts  of 
law  have  applied  to  cases  arising  on  bills  of  exchange.  The  acceptor  of  a 
bill  of  exchange  is  considered  as  the  principal  debtor;  all  the  other  parties  to 
the  bill  are  sureties  that  the  acceptor  shall  pay  the  bill,  if  duly  presented  to 
him  on  the  day  it  becomes  due,  and  if  he  does  not  then  take  it  up  that  they 
on  receiving  notice  of  its  non-payment,  will  pay  it  to  the  holder.  If  the 
holder  gives  the  acceptor  further  time  for  payment,  without  the  consent  of 
the  drawer  or  indorsers,  he  discharges  them  from  all  the  liability  that  they 
contracted  by  becoming  parties  to  the  bill;  but  delay  in  suing  the  acceptor 
will  not  discharge  the  drawers  or  indorsers,  because  such  delay  does  not  pre- 
vent them  from  doing  what,  on  receiving  notice  of  non-payment  by  the  accep- 
tor, they  ought  to  do,  namely,  pay  the  bill  themselves.  The  time  of  pay- 
ment must  be  given  by  a  contract  that  is  binding  on  the  holder  of  the  bill;  a 
contract,  without  consideration,  is  not  binding  upon  him;  the  delay  in  suing 
is,  under  such  a  contract,  gratuitous-,  notwithstanding  such  contract,  he  may 
proceed  against  the  acceptor  when  he  pleases,  or  receive  the  amount  of  the 
bill  from  the  drawer  or  indorsers.  As  the  drawer  and  indorsers  are  not  pre- 
vented from  taking  up  the  bill  by  such  delay,  their  liability  is  not  discharged 
by  it;  to  hold  them  discharged  under  such  circumstances,  would  be  to  absolve 
them  from  their  engagements  without  any  reason  for  so  doing." 


PAYMENT.  569 

thereby  alter  the  situation  of  any  other  person  on  the  bill  to 
the  prejudice  of  that  person,  he  cannot  afterwards  proceed 
against  him.  As  to  the  taking  part  payment,  no  person  can 
object  to  it,  because  it  is  in  aid  of  all  the  others  who  are 
liable  upon  the  bill :  but  here  the  holder  did  something  more : 
he  took  a  new  bill  from  the  acceptor,  and  was  to  keep  the 
original  bill  until  the  other  was  paid.  This  is  an  agreement 
that  in  the  mean  time  the  original  bill  should  not  be  enforced : 
such  is  at  least  the  effect  of  the  agreement;  and  therefore  I 
think  time  was  given."  i 

The  agreement  to  give  time  has  the  same  effect  whether 
made  before  or  after  the  drawer  or  indorser  has  been  charged 
with  notice  of  non-payment.  2  But  most  of  the  cases  pre- 
senting the  question,  have  been  decided  in  reference  to  con- 
tracts extending  the  time  of  payment  made  after  the  bill  or 
note  became  due.  3  It  is  manifest,  however,  that  the  principle 
applies  with  equal  if  not  superior  force  to  contracts  giving 
time  to  the  maker  or  acceptor  before  the  drawer  and  indorsers 
have  been  charged  with  notice. 

In  like  manner,  a  contract  made  with  the  drawer  of  a  bill 
or  with  the  prior  indorser  of  a  note  or  bill,  will  have  the  effect 
to  discharge  all  subsequent  indorsers; 4  but  will  not  operate 
as  a  release  of  the  maker  or  acceptor.  5  As  between  the  first 
and  subsequent  indorsers,  the  former  is  regarded  in  the  light 
of  principal;  he  stands  behind  them  upon  the  paper,  and  is 
bound  to  take  it  up,  in  case  of  the  default  of  the  maker.  The 

1  Gould  v.  Robson,  supra;  Hill  v.  Bostick,  10  Yerg.,  410;  5  Hill,  468. 

*  Hubbly  v.  Brown,  16  John.  R.,70,  presented  a  case  where  the  agreement 
was  made  after  the  maturity  of  the  note.  Myers  v.  Wells,  was  the  same,  5 
Hill,  463.  Smith  v.  Beckett,  13  East,  186.  In  this  case  the  note  was  drawn 
payable  on  demand,  and  indorsed  by  the  defendant  for  the  maker's  accom- 
modation; and  the  maker  placed  it  in  the  hands  of  the  plaintiff,  his  banker, 
as  security  for  advances,  and  at  the  end  of  six  months  the  plaint  ill  i  i 

his  advances  on  the  note  without  the  knowledge  or  consent  of  the  defendant, 
and  the  defendant  was  held  discharged.  See  Story  on  Notes,  §  413. 

1  See  the  authorities  above  cited;  16  John.  R.,  70;  9  Cowen,  190;  Noble  T. 
his  creditors,  19  Martin,  9;  Bank  of  U.  States  v.  Hatch,  6  Peters. 
Pick.,  291;  Mottram  v.  Mills,  2  Sand.  R.,  189. 

4  Newcomb  v.  Rayner,  21  Wend.,  108. 

•North  American  Coal  Co.  v.  Dyett,  7  Paige  Ch.  R., 9. 

34 


570  BILLS  OF    EXCHANGE  AND    PROMISSORY   NOTES. 

contracts  of  the  several  indorsers  are  like  so  many  links  in  a 
chain,  and  if  the  holder  consent  to  dissolve  the  first,  the  chain 
is  no  longer  capable  of  binding  either  of  the  parties.  1 

So  long  as  the  holder  makes  no  valid  and  binding  agreement 
for  delay,  he  is  at  liberty  to  use  every  endeavor  to  secure  the 
payment  of  the  bill  or  note;  he  may  receive  part  payment;  2 
he  may  take  new  securities;  3  he  may  negotiate  for  delay;  4  he 
may  receive  and  transmit  propositions  to  the  indorsers  for  an 
extended  credit;  5  and  he  may  voluntarily  forbear  to  bring  an 
action  against  any  or  all  of  the  parties  as  long  as  he  can  do  so 
without  coming  into  contact  with  the  bar  raised  by  the  statute 
of  limitations. 

The  reason  why  the  holder  may  not  enter  into  an  agreement 
giving  one  of  the  prior  parties  time  to  pay  the  note  or  bill  is, 
that  such  an  agreement  works  a  prejudice  to  the  subsequent 
parties;  6  and  hence  if  it  be  clearly  shewn  that  the  holder  in 
giving  a  stipulation  for  delay,  acted  for  the  benefit  of  all  the 
parties  liable  on  the  note,  the  stipulation  will  not  discharge 
the  indorser.  Thus,  if  the  holder  in  an  action  against  the 
maker  of  a  note,  takes  from  him  a  relicta  and  cognovit,  with  a 
proviso  that  no  execution  shall  issue  on  the  judgment  which 
is  entered  thereon  immediately,  until  a  subsequent  day;  and 
it  appear  that  judgment  could  not  have  been  recovered  any 
sooner,  the  indorser  is  not  thereby  discharged.  7  Neither  will 
the  taking  of  a  confession  of  judgment  in  any  form  impair  the 
rights  of  the  holder,  unless  he  gives  a  stipulation  to  withhold 
the  execution  for  a  greater  length  of  time  than  would  have 
been  required  to  recover  the  judgment  unencumbered  by  any 
agreement.  «s  In  England,  it  has  been  held  no  defence  in  an 

1  Smith  v.  Knox,  3  Esp.  R..  46;  English  v.  Darley,  2  B.  and  P.,  61. 
4  8  East,  576;  James  v.   Badger,  1    John.   C.,   131;  Kenedy  v.  Mott,  3 
M'Cord,  13;  Lynch  v.  Reynolds,  16  John.  R.,  41. 
8  Pring  v.  Clarkson,  1  Barn,  and  Cress.,  14. 
4  Hewitt  v.  Goodrich,  2  Car.  and  P.,  468. 
'  Foster  v.  Juridson,  16  East,  105. 

6  9  Cowen  R.,  194;  16  John.  R.,  41. 

7  Hallet  v.  Holmes,  18  John.  R.,  28. 

8  Sizer  v.  Heacock,  23  Wend.,  81 ;  Mohawk  Bank  v.  Van  Home,  7  Wend 
117 


PAYMENT.  671 

action  against  the  drawer  of  a  bill  that  the  plaintiff  had  in  a 
former  suit  against  the  acceptor,  consented  to  a  judge's  order 
that  upon  the  payment  of  the  principal  and  interest,  on  a 
certain  future  day,  all  further  proceedings  should  be  stayed, 
otherwise  judgment  to  be  entered;  it  not  appearing  that  such 
future  day  was  posterior  to  that  on  which  judgment  could 
have  been  obtained  against  the  acceptor,  i 

It  is  scarcely  necessary  to  say  that  an  agreement  made  by 
the  holder  with  the  principal  debtor,  extending  the  time  of 
payment,  or  even  releasing  him  from  his  liability,  will  not 
discharge  the  drawer  or  indorser  if  he  assents  to  the  arrange- 
ment; and  therefore  if  the  holder  and  indorser  of  a  note  exe- 
cute to  the  maker  a  general  release,  containing  a  proviso  that 
nothing  therein  contained  shall  be  construed  to  impair  any 
collateral  security  held  by  either  of  the  creditors,  the  indorser 
is  not  thereby  discharged.  2  So,  if  the  holder  receive  from 
the  acceptor  of  a  bill  an  offer  of  new  security  with  a  promise 
to  pay  by  instalments,  and  communicates  the  proposition  to 
the  drawer,  who  assents  to  it,  the  arrangement  made  accord- 
ingly will  not  impair  the  rights  of  the  holder.  3  So,  also,  if 
the  holder  give  time  to  the  maker  or  acceptor,  and  the  drawer 
or  indorser  afterwards  promises  to  pay,  with  knowledge  of  the 
fact,  he  is  precluded  from  taking  advantage  of  the  indulgence 
so  granted.  4  If  the  drawer  be  consulted  and  his  assent  be 
given  before  any  arrangement  is  made,  he  is  a  party  to  the 
contract  extending  the  time  of  payment,  and  cannot  complain 
of  the  delay.  5 

.  A  release  of  a  debt  or  liability  given  on  a  good  considera- 
tion, extinguishes  the  indebtedness;  6  but  a  release  without 

1  Kennard  and  another  v.  Knott,  4  Man.  and  Gr.,  474;  Michael  v.  Myers,  6 
Man.  and  Gr.,  702.  An  agreement  to  givo  tinn-.  it  seems  is  not  enough  to 
discharge  an  indorser,  provided  it  be  made  on  a  condition,  and  time  is  not  in 
fact  given.  Price  v.  Edmunds,  10  Barn,  and  C.,  678. 

a  Seymour  v.  Minturn,  17  John.  R.,  170;  Gloucester  Bank  T.  Worcester,  10 
Pick.,  628;  Parsons  v.  Gloucester  Bank,  10  Pick.,  688. 

»  Clark  v.  Devlin,  3  Bos.  and  Pull.,  863. 

4  Stevens  v.  Lynch,  12  East,  38. 

•  Hill  v.  Johnson,  3  Car.  and  P.,  456;  Smith  v.  Hawkins,  6  Conn.,  444. 

'  Lewis  v.  Jones,  4  Barn,  and  Cress.,  606,  615,  note. 


572  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

consideration  and  not  under  seal,  is  void,  i  And  hence  an 
agreement  made  by  a  subsequent  indorser,  not  under  seal,  that 
he  will  not  look  to  the  first  indorser  for  payment  is  without 
consideration  and  void.  2  And  for  the  same  reason  a  written 
release  of  the  maker,  given  without  consideration,  will  not 
discharge  an  indorser,  whose  liability  has  been  fixed.  3 

Where  one  of  the  makers  of  a  promissory  note  adds  to  his 
signature  the  word  surety,  the  holder  is  bound  to  treat  him  as 
such,  and  cannot  vary  the  terms  of  the  contract  by  extending 
the  time  of  payment,  or  otherwise,  so  as  to  increase  the  risk 
of  the  surety  without  discharging  him.  But  a  naked  promise 
to  give  the  principal  debtor  further  time  will  not  have  the 
effect  to  discharge  the  surety.  4  The  rule  is  the  same  as  we 
have  already  stated  it,  in  reference  to  drawers  and  indorsers. 
Where  time  is  given  to  the  principal  debtor,  by  a  valid  agree- 
ment, which  ties  up  the  hands  of  the  creditor,  though  it  be 
but  for  a  single  day,  it  is  quite  clear  that  the  surety  is  dis- 
charged. The  principle  is  the  same  whether  the  time  be  long 
or  short.  The  creditor  must  be  in  such  a  situation  that  when 
the  surety  comes  to  be  substituted  in  his  place  by  paying  the 
debt,  he  may  have  an  immediate  right  of  action  against  the 
principal.  5  An  extension  of  credit  to  the  debtor  for  one  day, 
discharges  the  surety  as  effectually  as  if  made  for  one  year.  6 

Taking  security  from  or  giving  time  to  one  of  several  joint 
makers  of  a  note  or  acceptors  of  a  bill,  does  not  discharge  the 
others.  7  Indeed,  it  has  been  doubted  whether  one  of  the 
several  makers  of  a  note  will  be  permitted  to  prove  that  he 
was  in  fact  a  surety,  where  there  is  nothing  on  the  paper  to 

1  Jackson  v.  Stackhouse,  1  Cowen,  122;  Strong  v.  Holmes,  7  Cowen,  224; 
17  John.,  175.  A  new  consideration  gives  effect  to  a  release  not  under  seal. 
Kellogg  v.  Richards,  14  Wend.,  116. 

a  Keeler  v.  Bartine,  12  Wend.,  110. 

3  Crawford  v.  Millspaugh,  13  John.  R.,  87. 

4  Reynolds  v.  Ward,  5  Wend.,  501,  and  cases  there  cited. 

5  Bangs  v.  Strong,  7  Hill  R.,  250;  10  Paige,  11;  Bower  v.  Tierman,  SDenio, 
378.     This  case  closely  resembles  that  of  Price  v.  Edmunds,  and  is  decided 
differently,  10  B.  and  C.,  578;  see  also  Barker  v.  McClure,  2  Blackf.,  14. 

8  Fellows  v.  Prentiss,  3  Denio,  512. 

7  Bedford  v.  Deakin,  2  B.  and  Aid.,  210;  Perfect  v.  Musgrave,  6  Price,  111. 


PAYMENT.  573 

shew  that  he  signed  as  such,  in  order  to  let  in  evidence  that 
he  has  been  discharged  by  the  giving  of  time  to  the  principal,  i 
The  objection  to  it  is,  that  it  is  parol  evidence  to  shew  that 
the  contract  was  really  conditional.  As  between  the  immedi- 
ate parties  and  a  subsequent  holder  taking  the  note  with 
knowledge  of  the  relation  subsisting  between  the  makers,  the 
evidence  seems  to  be  admissible.  2  But  where  the  payee  takes 
a  note  without  knowing  that  one  of  the  makers  signed  it  as 
surety  for  the  other,  and  especially  where  the  note  has  passed 
into  the  hands  of  a  person  taking  it  without  knowledge  of  that 
circumstance,  there  is  no  ground  on  which  to  allow  testimony 
varying  the  nature  of  the  contract  expressed  on  the  face  of 
the  instrument.  3  In  respect  to  his  principal,  the  person  sign- 
ing in  that  manner  may  undoubtedly  shew  that  he  was  in 
truth  a  surety;  but  in  respect  to  the  creditor  or  holder  of  the 
note  there  is  no  reason  why  he  should  be  allowed  to  stand  in 
any  better  condition  than  an  accommodation  acceptor  of  a 
draft.  4 

When  one  of  the  signers  of  a  promissory  note  adds  to  his 
signature  the  word  surety r,  and  the  others  do  not,  the  presump- 
tion is  that  the  note  was  given  for  value  by  the  other  makers, 
and  that  they  are  the  principal  debtors;  5  but  it  has  been 
suggested  that  this  is  an  inference  of  fact  to  be  drawn  by  a 
jury  rather  than  a  conclusion  of  law.  6 

At  common  law  if  the  holder  of  a  joint  and  several  prom- 
issory note,  discharges  one  of  the  makers  by  erasing  his  name 
from  the  instrument,  it  is  a  discharge  of  all.  7  But  a  part 

'Price  v.  Edmnnds,  10  Barn,  and  Cress.,  578. 

1  Nichols  v.  Parsons,  6  N.  Hamp.,  82;  Grafton  Bank  v.  Kent,  4  N.  Damp., 
221;  McGee  v.  Prout,  9  Metcalf,  647;  Suydam  v.  Westfall,  2  Denio,  206. 

*  Sprigg  v.  Bank  of  Mount  Pleasant,  10  Peters,  267;  Patterson  v.  Patterson, 
2  Penn.  R.,  200;  Townsend  v.  Riddle,  2  N.  Hamp.,  448. 

4  Fentum  v.  Pocock,  5  Taunt.,  192;  12  Serg.  and  Rawle,  882;  6  Taunt., 
551;  see  Robison  v.  Lyle,  10  Barb.  612. 

»  Bank  of  Orleans  v.  Barry,  1  Denio,  116;  10  Barb.  R.,  612. 

•  Sisson  v.  Barrett,  2  Comst.  R.,  406;  18  Wend.,  400. 

'  Nicholson  v.  Revill,  4  Ad.  and  El.,  675;  Chetham  v.  Ward,  1  Bos.  and 
P.,  630. 


574  BILLS  OF   EXCHANGE  AND    PROMISSORY    NOTES. 

payment  by  one  of  the  promisors  does  not  operate  to  discharge 
the  rest,  provided  the  holder  has  not  extinguished  the  con- 
tract, i  Accordingly  when  the  holder  of  a  note  releases  one  of 
several  joint  makers,  excepting  from  such  liability  as  he  may 
be  under  to  the  indorsers,  those  indorsers  cannot,  in  an  action 
against  them  by  such  holder,  set  up  such  release  in  discharge.  2 

The  doctrine  on  the  subject  results  from  the  contract :  joint 
debtors  must  be  jointly  sued;  if  a  less  number  than  the  whole 
be  sued,  that  is  a  matter  which  may  be  pleaded  in  abate- 
ment. 3  In  an  action  against  joint  debtors,  it  is  necessary  to 
shew  a  joint  subsisting  indebtedness  in  all  of  the  defendants ; 
and  in  assumpsit,  the  plaintiff  must  shew  a  subsisting  lia- 
bility on  the  part  of  all  the  defendants  as  promisors,  unless 
some  of  them  have  been  discharged  on  a  defence  of  a  personal 
nature,  such  as  infancy.  4  And  where,  as  respects  any  of  the 
defendants,  the  right  of  action  is  gone  or  suspended,  their  joint 
liability  being  at  an  end,  the  other  defendants  may  avail  them- 
selves of  this  suspension  or  discharge,  whether  it  be  produced 
by  the  act  of  the  party,  or  by  operation  of  law  at  the  instance 
and  by  the  act  of  the  creditor.  5 

In  this  state  joint  debtors  and  the  individual  members  of  a 
partnership  that  has  been  dissolved,  are  now  authorized  by 
statute  to  make  a  separate  composition  or  compromise  with 
any  one  or  all  of  the  creditors  of  the  firm  or  of  the  joint 
debtors,  and  are  permitted  to  take  a  note  or  memorandum  in 
writing  exonerating  them  from  their  liability,  without  impair- 
ing the  right  of  the  creditor  to  proceed  at  law  or  in  equity 

1  Ruggles  v.  Patten,  8  Mass.,  480. 

a  Stewart  v.  Eden,  2  Caines  R.,  121, 

8  Robertson  v.  Smith,  18  John.  R.,  459;  8  Mass.  R.,  480. 

4  Hartness  and  another  v.  Thompson  and  another,  5  John.  R,,  160.  The 
action  in  this  case  was  on  a  joint  and  several  promissory  note,  and  one  of  the 
defendants  pleaded  infancy,  and  a  verdict  rendered  for  him  and  against  the 
other  defendants,  was  sustained. 

6  Chetham  v.  Ward,  1  Bos.  and  Pull.,  630.  Here,  one  of  the  makers  of  a 
joint  and  several  bond  was  appointed  executor  of  the  obligee,  and  the  right  of 
action  was  held  suspended  and  discharged.  14  Wend. ,221;  2  Barb.  Ch.} 
632;  2Comst.,  512. 


PAYMENT.  575 

against  such  of  the  partners  or  joint  debtors  as  have  not  been 
discharged,  i 

Where  a  bill  of  exchange  is  accepted  for  the  accommoda- 
tion of  the  drawer,  the  holder  does  not  discharge  him  by 
giving  the  acceptor  further  time  for  payment;  for  here  the 
drawer  is  ultimately  liable  to  pay  the  amount  secured  by  the 
bill,  and  does  not  stand  in  the  light  of  a  surety.  2  Nor  will 
an  agreement  with  the  drawer,  giving  him  time  for  payment, 
discharge  the  acceptor  for  his  accommodation.  3  So  in  respect 
to  a  promissory  note,  if  made  for  the  accommodation  of  the 
payee,  delay  granted  to  him  will  not  discharge  the  maker.  4 

If  the  holder  of  a  bill  compound  with,  and  release  the 
acceptor,  without  having  the  assent  of  the  subsequent  parties, 
he  thereby  releases  them  from  their  liability,  although  he  may 
have  acted  wisely  for  the  interest  of  the  parties  concerned; 
for  the  law  does  not  make  him  the  agent  of  the  drawer  and 
indorsers  to  decide  whether  or  not  it  be  expedient  to  com- 
promise with  the  principal  debtor.  5  But  the  holder  may 
prove  the  bill  under  a  commission  of  bankruptcy,  against  the 
acceptor,  and  receive  his  dividend,  without  discharging  the 
subsequent  parties;  for  here  the  acceptor  is  discharged  not  by 
the  act  of  the  holder,  but  by  the  act  of  the  law;  and  there  is 
a  marked  distinction  between  receiving  a  dividend  under  the 
compulsion  of  a  judicial  proceeding,  and  voluntarily  taking 
part  payment  in  satisfaction  of  the  debt.  6 

Receipts.  Where  a  part  payment  is  made  on  a  negotiable 
note  or  bill,  the  party  paying  should  take  care  to  have  a 
receipt  indorsed  upon  the  instrument;  otherwise  he  may  be 
compelled  to  pay  it  over  again  to  a  bona  fide  holder.  7  But 

»2R.  S.,61,3ded. 

*  Collott  and  others  v.  Haight,  3  Campb.,  281. 
1  Kenison  v.  Cooke,  SjCampb.,  862. 

4  Nichols  v.  Morris,  3  Barn,  and  Ad.,  41. 

•  Lewis  v.  Jones,  4  Barn,  and  Cress.,  607;  ex  parte  Wilson,  11  Vea.,  410; 
Douglass  v.  White,  3  Barb.  Ch.,  f,-jl. 

«  Kenworthy  v.  Hopkins,  1  John.  Cas.,  108;  8  Boa.  and  Pull.,  61.  » 
7  Cooper  v.  Davies,  1  Esp.  R.,  403;  Manhattan  Co.  v.  Reynolds,  2  Hill  R., 
140.     In  this  case  it  was  held  that  payment  to  the  payees  of  a  negotiable  note 
was  no  defence  in  an  action  brought  by  an  indorsee  holding  it  as  collateral 
security. 


576  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

the  maker  of  a  note  or  due  bill  which  is  not  negotiable  may 
safely  pay  money  on  it  to  the  payee,  where  he  has  no  notice 
or  reason  to  suppose  that  it  has  been  assigned,  i  When  paid 
in  full  on  the  day  it  falls  due,  it  should  be  surrendered  or 
cancelled,  so  that  the  maker  may  not  afterwards  be  compelled 
to  prove  that  it  has  been  satisfied.  2 

The  acceptor  of  a  bill,  on  being  called  upon  for  payment, 
is  entitled  to  have  the  bill  surrendered  to  him  as  a  voucher; 
and  the  maker  of  a  negotiable  note  stands  in  the  same  rela- 
tion; neither  of  them  can  be  compelled  to  pay,  unless  the 
holder  produces  and  offers  to  deliver  up  the  instrument,  or 
tenders  a  sufficient  indemnity  where  it  has  been  lost.  3  And  the 
indorser  paying  a  note  has  a  right  to  demand  that  it  be  sur- 
rendered to  him.  4  Some  of  the  earlier  cases  go  so  far  as  to 
countenance  the  idea  that  the  acceptor  is  also  entitled,  under 
the  custom  of  merchants,  to  a  receipt  from  the  holder.  5  And 
Mr.  Justice  Story  intimates  the  opinion  that  the  maker  of  a 
note  is,  upon  general  principles,  entitled  to  claim  it  as  matter 
of  right.  6 

The  general  doctrine  is  that  the  debtor  is  bound  to  pay  the 
debt  he  owes  unconditionally,  and  that  he  cannot  impose  any 
terms  upon  the  creditor.  This  is  evident  from  the  English 
statute  and  the  decisions  that  have  been  made  under  it.  7  By 
section  four  of  that  act,  the  person  from  whom  the  money  is 
due  may  provide  the  stamp,  and  on  payment  require  the 
receiver  to  give  him  a  receipt,  and  pay  the  amount  of  the 
stamp  duty;  and  if  the  receiver  refuses  he  becomes  liable  to 

1  Meghan  v.  Mills,  9  John.  R.,  64;  Anderson  v.  Van  Allen,  12  id.,  343. 
a  Rosa  v.  Brotherton,  10  Wend.,  85;  Smith  v.  Van  Loon,  16  Wend.,  659. 

3  Hansard  v.  Robinson,  7  Barn,  and  Cress.,  90. 

4  8  Barb.  R.,  408. 

6  Mendey  v.  Carreroon,  1  Lord  Raym.,  742.    In  this  action  which  was 
brought  by  one  of  the  indorsers  who  had  taken  up  the  bill,  the  plaintiff  was 
non-suited  notwithstanding  he  produced  the  bill  and  protest,  "  because  he 
could  not  produce  a  receipt  for  the  money  paid  by  him  to  G.,  (a  subsequent 
holder,)  upon  the  protest,  as  the  custom  is  among  merchants,  as  several  mer- 
chants ^ipon  their  oaths  affirmed." 

.'  Story  on  Notes,  §  452. 

7  43  Geo.  3,  c.  126. 


PAYMENT.  577 

a  penalty  of  ten  pounds.  But  it  has  been  held,  under  this 
statute,  that  a  plea  of  tender  is  not  supported  by  proving  that 
the  defendant  took  a  sum  of  money  out  of  his  pocket  and  said 
to  the  plaintiff,  "  If  you  will  give  me  a  stamped  receipt,  I 
will  pay  you  the  money."  Abbott,  Ch.  J.:  "This  is  no 
proof  of  a  tender :  the  offer  of  the  money  must  be  uncondi- 
tional." i  In  effect  this  decision  takes  it  for  granted  that  the 
debtor  is  bound  absolutely  to  pay  the  debt,  though  a  receipt 
be  refused;  his  remedy  for  the  refusal  being  the  penalty 
imposed  by  the  statute.  2 

It  is  usual  to  give  a  receipt  on  the  back  of  bills,  and  it  is 
said  to  be  the  duty  of  bankers  to  make  some  memorandum  on 
bills  and  notes  that  have  been  paid;  so  that  they  may  not 
afterwards  come  into  the  hands  of  any  person  as  business 
paper.  3  The  more  common  practice  among  bankers  and 
banking  institutions  is  to  mark  them  with  an  arbitrary  sign, 
indicating  that  the  note  or  bill  has  been  paid  or  charged  over 
to  the  account  of  the  person  for  whom  the  payment  was  made.  4 

A  receipt,  not  specifying  by  whom  the  payment  was  made, 
indorsed  on  the  back  of  a  bill,  is  presumptive  evidence  that 
the  bill  was  paid  by  the  acceptor  5  But  the  signature  of  the 
person  signing  the  receipt  must  be  proved,  and  it  must  appear 
to  be  that  of  a  person  entitled  to  receive  payment;  6  and  it 

1  Laing  v.  Header,  1  Carr.  and  Payne,  257;  see  also  Green  v.  CroA.  -2  II. 
Bla.,  30. 

1  Wood  v.  Hitchcock,  20  Wend.,  47.  This  case  shews  the  manner  in  which 
the  tender  should  be  made;  2  Denio,  1%;  14  Wend.,  ±M. 

1  Burbridge  v.  Manners,  8  Campb.,  198. 

4  Watervliet  Bank  v.  White,  1  Dcnio,  608. 

*  Scholey  v.  Walsly,  Peake  Ca*.,  25.    The   action  wa»  brought  by  the 
drawer  against  the  acceptor,  and  the  plaintiff  produced  the  bill. 

•  Pfiel  v.  Van  Batenberg,  2  Campb.,  489  j  Cole  T.  Blake.  Peake,  179,  de- 
cides that  if  on  a  tender  being  made,  the  creditor  insists  on  receiving  a  larger 
sum  of  money,  he  cannot  afterwards  object  to  the  formality  of  the  tender  on 
account  of  the  debtor  having  required  a  receipt.     But  no  objection  was  made 
to  the  giving  of  a  receipt,  and  Lord  Kenyon  said  that  it  had  been  determined 
that  a  party  tendering  money  could  not  in  general  demand  a  receipt  for  the 
same. 

In  Cooper  v.  Davies,  (1  Esp.,  463,)  which  waa  an  action  by  the  indorsee 
against  the  drawer  or  maker  of  a  promissory  note,  the  plaintiff  wat  allowed 


578  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

has  been  held,  the  evidence  must  shew  that  the  bill  has  been 
in  circulation  after  acceptance  in  order  to  raise  the  presump- 
tion of  payment  by  the  acceptor,  on  the  mere  fact  that  he 
produces  it.  i  But  this  ruling  was  made  in  a  case  where  the 
accommodation  acceptor  was  seeking  to  recover  for  money 
advanced  for  the  drawer. 

A  receipt  indorsed  on  a  note  or  bill  may  be  contradicted  or 
explained  like  any  other  receipt  for  money  paid;  and  if  drawn 
in  general  terms  without  stating  from  whom  the  money  was 
received,  evidence  may  be  given  to  shew  that  the  payment 
was  made  by  the  drawer  for  the  purpose  of  establishing  the 
right  of  his  indorsee  to  recover  thereon  against  the  acceptor.  2 

In  respect  to  promissory  notes  and  drafts .  which  are  not 
negotiable,  the  maker  and  acceptor  cannot  refuse  to  pay  on 
the  ground  that  they  are  not  produced  and  ready  to  be  surren- 
dered. 3  The  assignee  of  such  paper  takes  it  subject  to  what- 
ever defence  the  maker  or  acceptor  may  have  to  it,  as  against 
the  payee;  4  and  the  rule  is  the  same  where  the  note  is  negotia- 
ble, but  is  transfered  without  indorsement.  5 

1  2  Campb.,  440. 

'  Graves  v.  Key,  3  Barn,  and  AdoL,  313. 

8  Wain  v.  Bailey,  10  AdoL  and  El.,  616;  Rolt  v.  Watson,  4  Bing.,  273;  10 
John.  R.,  104;  3  Wend.,  344;  12  id.,  173. 
4  Hill  v.  McPherson,  15  Miss.,  204. 
6  9  Barb.  R.,  214. 


by  Lord  Kenyon  to  recover  money  paid  on  the  note  before  indorsement,  it 
being  shewn  that  the  plaintiff  had  no  notice  of  such  payment. 

In  Egg  v.  Barnett,  (3  Esp.,  196,)  it  was  decided  by  the  same  judge  that 
"  to  prove  payment  of  a  debt  due  by  the  defendant  to  the  plaintiff,  a  banker's 
check  drawn  by  the  defendant  on  his  bankers,  and  which  appeared  to  have 
been  received  by  the  plaintiff,  is  evidence  to  go  to  the  jury  of  the  payment." 
Aubert  v.  Walsh  and  another,  4  Taunt.,  293;  the  delivery  of  a  check  requires 
explanation  to  make  it  evidence  of  a  debt. 

Ingram  v.  Craft,  7  Louis.,  82.  "  The  possession  of  a  joint  note,  by  one  of 
the  drawers,  with  a  receipt  of  payment  by  the  holder  or  indorsee  indorsed  on 
it  by  the  person  entitled  to  receive  it.  is  prima  facie  evidence  of  the  liability 
of  the  other  drawer  to  refund  one-half  of  the  note." 

Mercer  v.  Cheese,  4  Man.  and  Gr.,  804.  Action  for  work  and  materials; 
plea  that  the  defendant  and  others  were  jointly  indebted,  and  that  one  of  the 
persons  indebted  had  given  to  the  plaintiff  a  bill  of  exchange  therefor ;  held 
a  good  answer,  as  raising  a  prima  facie  defence.  Decided  in  1842. 


PAYMENT.  579 

And  there  is  substantially  the  same  reason  for  giving  to  the 
debtor  a  receipt  or  acquittance  for  money  paid  on  account,  as 
for  the  payment  of  a  note  which  is  not  negotiable;  both  of 
them  are  assignable,  and  both  are  taken  by  the  assignee  sub- 
ject to  the  equities  existing  between  the  immediate  parties  to 
them,  i 

The  party  paying  clearly  has  no  right  to  demand  such  a 
receipt  as  may  raise  a  presumption  of  a  general  settlement : 
if  he  pays  a  particular  debt  he  cannot  demand  a  receipt  in  full 
of  all  demands;  -2  neither  is  it  always  safe  for  him  to  take  a 
receipt  in  full  of  all  accounts,  since  the  taking  of  such  a  receipt 
warrants  the  inference  of  a  settlement  of  accounts  on  both 
sides,  and  may  subject  him  to  the  burden  of  explaining  or 
contradicting  the  receipt.  3  But  the  well  known  practice 
among  business  men  recognizes  it  as  a  reasonable  thing  that 
the  party  receiving  money  in  payment  of  a  debt,  or  to  apply 
on  an  account,  should  give  to  the  party  paying  a  memoran- 
dum acknowledging  the  fact,  as  the  most  appropriate  and  con- 
venient evidence  of  payment.  In  the  case  of  judgments  and 
mortgages,  which  are  an  incumbrance  upon  real  estate,  the 
law  prescribes  the  manner  in  which  they  shall  be  satisfied  and 
cancelled  of  record;  4  while  in  regard  to  those  of  an  inferior 
degree  the  statute  of  limitations  comes  in  to  supply  the  place 
of  fugitive  and  perishable  testimony. 

When  a  creditor  receives  from  a  debtor  his  negotiable  note 
for  and  on  account  of  the  debt,  and  a  suit  is  brought  on  the 
original  consideration,  it  was  formerly  held  not  a  sufficient 
answer  to  the  action  for  the  defendant  to  allege  the  giving  of 
the  note.  ">  The  giving  of  such  a  note  is  only  a  payment  sub 
modo;  it  is  not  an  accord  and  satisfaction.  iNVvrrlheless,  it 
has  been  recently  adjudged  that  such  a  plea  raises  a  prima 

1  Code  of  Procedure,  §  111,  112,  118. 

*  Thayer  v.  Brockett,  12  Mass.,  450;  20  Wend.,  47. 

»  Alvord  v.  Baker,  9  Wend.,  828. 

4  2  R.  S.,  459,  460,  3d  ed.,  as  to  the  discharge  of  judgments;  and  7  Wi-n.l., 
35;  2  R.  S.,  45,  as  to  the  mode  of  discharging  the  record  of  a  mortgage. 

6  Hughes  v.  Wlieeler,  8  Cowen  R.,  77.  It  was  held  in  this  case  that  the 
giving  of  the  note  was  proper  evidence  under  the  general  issue. 


580  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

facie  defence;  i  and  that  it  is  a  good  answer,  in  an  action  on 
a  note  against  an  indorser,  to  allege  that  the  indorsement  was 
made  for  the  accommodation  of  the  maker  for  a  special  pur- 
pose, that  the  paper  was  diverted  from  that  purpose,  and  that 
plaintiff  received  it  with  notice.  2 

When  the  creditor  accepts  the  note  of  a  third  person  as  pay- 
ment, it  is  a  good  accord  and  satisfaction.  3  The  additional 
security,  though  for  a  less  amount,  is  a  valid  consideration  for 
a  release  and  discharge  of  the  debt;  4  and  it  has  been  held 
that  where  the  debtor  delivers  the  note  of  a  third  person  for  a 
less  amount,  and  the  creditor  accepts  it  and  indorses  on  the 
debtor's  note  a  receipt  of  the  substituted  note,  expressed  to 
be  in  full  payment  upon  a  compromise,  parol  evidence  will 
not  be  received  to  vary  the  terms  of  the  agreement.  5  But  an 
agreement  to  accept  the  note  of  a  third  person  in  satisfaction, 
and  a  subsequent  tender  of  the  note  cannot  be  pleaded  in  bar 
as  an  accord  and  satisfaction.  6  An  accord  executed  is  satis- 
faction; but  an  accord  executory  is  only  substituting  one  cause 
of  action  for  another;  and  it  is  settled  that  readiness  toper- 
form  cannot  give  it  effect  as  an  executed  contract.  7  And 
where  a  creditor  whose  account  is  disputed  gives  to  his 
debtor  a  receipt  in  full  of  all  demands,  this  is  a  final  adjust- 
ment, though  not  strictly  an  accord  and  satisfaction.  8 

1  Mercer  v.  Cheese,  4  Man.  and  Gr.,  804. 

a  Rochester  v,  Taylor,  23  Barb.  R.,  18,  per  Welles,  J. 

3  St.  John  v.  Purdy,  1  Sand.  R.,  9. 

4  Boyd  v.  Hitchcock,  20  John.  R.,  76;  Le  Page  v.  McCrea,  1  Wend.,  164; 
14  Wend.,  116;  21  Wend.,  450. 

8  Kellogg  v.  Richards,  14  Wend.,  116.  Such  a  receipt  is  also  a  contract, 
and  as  such  cannot  be  varied  by  parol  evidence.  Douglass  v.  White,  3  Barb. 
Ch.,  621. 

6  Hawley  v.  Foote,  19  Wend.,  516. 

7  Russell  v.  Lytle,  6  Wend..  390. 

8  Palmerton  v.  Huxford,  4  Denio,  166. 


CHAPTER   X. 

OF  PROCEEDINGS  ON  NON-PAYMENT,  NOTICE. 

We  have  seen  that  the  contract  of  the  drawer  of  a  bill  of 
exchange  and  of  the  indorser,  whether  of  a  negotiable  note, 
bill  or  check,  is  conditional;  and  that  one  of  the  conditions 
on  which  it  depends  is  due  notice  of  non-acceptance  or  non- 
payment, i  If  the  holder  fail  to  give  the  notice  of  dishonor 
required  by  law,  the  general  rule  is  that  the  drawer  and  indor- 
ser are  discharged  from  their  respective  liabilities;  in  other 
words,  the  contract  does  not  become  absolute  unless  such 
notice  to  them  be  duly  given.  2  And  in  the  case  of  a  foreign 
bill,  it  is  also  necessary,  by  the  custom  of  merchants,  that  the 
dishonor  should  be  attested  by  a  protest.  3 

A  protest  on  a  foreign  bill  is  a  part  of  the  custom,  and  is 
said  to  be  incident  to  the  constitution  of  the  bill.  4  The  man- 
ner in  which  the  protest  should  be  made  has  been  already 
pointed  out.  It  should  be  done  by  a  notary  public,  or  if  there 
be  no  such  notary  in  or  near  the  place  where  the  bill  is  pay- 
able, by  an  inhabitant,  in  the  presence  of  two  witnesses.  5  If 
the  bill  be  presented  in  the  first  place  by  the  holder,  and  pay- 
ment refused,  it  should  thereupon  be  placed  in  the  hands  of  a 
notary,  whose  duty  it  is  to  present  it  again  to  the  drawee  and 
demand  payment;  and  in  case  he  again  refuses  to  pay,  the 
notary  makes  a  minute  of  the  refusal,  of  the  reason  assigned 
therefor,  and  of  the  time,  adding  his  initials.  From  this 

1  Cayuga  Co.  Bank  v.  Warden,  1  Comst.  R.  413,  and  cases  there  cited. 
1  2  Term.,  713;  6  Term  R.,  289;  8  Wend.,  488;  17  id.  94;  4  Hill,  268. 

*  Atwater  v.  Streets,  1  Doug.,  (Mich.,)  466;  10  Mass.  R.,  1;  15  Wend.,  627. 
4  Brough  v.  Parkings,  2  Ld.  Raym.,  998,  per  Uolt,  Ch.  J.;  Chitty  on  Bills, 

455. 

*  Read  v.  The  Bank  of  Kentucky,  1  Monroe.  (Ken.,)  R.,  91;  8  Wend.,  178. 


582  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

minute  he  afterwards  draws  up  the  protest,  which  is  a  formal 
declaration  of  presentment  and  refusal  to  pay,  in  the  usual 
form,  stating  the  facts  according  to  his  minute,  i 

It  has  been  said  that  a  notary  public  is  an  officer  known  to 
the  law  of  nations,  and  it  is  certain  that  he  is  recognized  by 
the  law  merchant,  and  that  his  certificate,  under  seal  of  office, 
is  evidence  of  protest  in  a  foreign  state,  without  any  auxiliary 
support,  and  is  so  received  in  all  courts,  according  to  the 
usage  and  custom  of  merchants.  2  "  On  foreign  bills  protest 
is  the  evidence  of  demand  and  an  indispensible  step  towards 
the  legal  notice  of  non-payment,  in  consequence  of  which  the 
undertaking  of  the  drawer  or  indorser  becomes  absolute. 
Hence,  as  to  foreign  transactions,  it  is  justly  predicated  of  a 
protest  that  it  has  a  legal  or  binding  effect."  3 

Bills  of  exchange  drawn  in  one  country  on  another,  or  in 
one  state  on  another,  are  foreign  bills.  4  The  states  of  the 

1  Chitty  on  Bills,  457. 

3  Wells  v.  Whitehead,  15  Wend.,  527,  Kirksey  v.  Bates,  7  Porter,  (16 
Ala.,)  R.,529;  Fleming  v.  McClure,  1  Brevard's  R.,428.  "The  law  mer- 
chant, as  it  obtains  in  England,  is  generally  speaking  the  law  of  this  country. 
Some  exceptions  have  been  made,  and  some  more  may  be  made,  which  conve- 
nience and  necessity  have  directed,  and  may  hereafter  suggest.  The  custom 
among  merchants  with  us,  in  regard  to  bills  of  exchange,  is  the  same  which 
exists  in  England,  as  to  protests  and  notices  of  non-acceptance  and  non-pay- 
ment, and  must  be  governed  by  the  same  rules.  *  *  In  the  case  of  foreign 
bills  a  protest  is  universally  necessary  whether  for  non-acceptance  or  non-pay- 
ment. It  is  an  essential  part  of  the  custom  of  merchants,  and  is  requisite  not 
merely  on  account  of  the  damages  and  interest,  but  also  on  account  of  the 
principal  sum." 

2  Bay.  (S.  C.,)  R.,  376.    Here  the  court  holds  language  to  the  same  effect, 
though  the  question  at  issue  arose  on  a  promissory  note. 

Read  v.  The  Bank  of  Kentucky,  1  Monroe,  (Ken.,)  R..  91.  In  this  case  the 
declaration  averred  that  the  note,  which  stood  on  the  footing  of  a  foreign  bill 
of  exchange,  was  duly  and  legally  protested  by  Raphael  Lancaster,  in  the 
presence  of  Daniel  Thompson  and  Joseph  B.  Lancaster,  there  being  then  no 
notary  public  at  the  time  in  the  place  j  and  it  was  held  by  the  court,  1.  That 
a  protest  is  essential  to  a  recovery  on  a  foreign  bill  of  exchange,  the  rank  of 
which  belongs  to  this  note,  and  it  is  said  to  enter  into  the  substance  of  the  bill 
according  to  the  custom  of  merchants.  2.  That  the  protest  in  this  case  was 
regular,  there  being  no  notary  at  the  place  where  the  act  was  necessary  to  be 
done. 

3  The  Union  Bank  v.  Hyde,  6  Wheat.,  572. 

4  Chenowith  &  Co.  v.  Chamberlain,  6  B.  Monroe  R.,  60.    The  bill  in  this 
case  was  drawn  in  Louisville  on  New  Orleans,  and  being  a  foreign  bill,  it  was 


PROCEEEDINGS   ON   NON-PAYMENT,    NOTICE.  583 

union  are  not  foreign  to  each  other  in  the  same  sense  as  are 
separate  and  independent  nations;  but  they  are  so  far  foreign 
to  each  other  that  the  convenience  of  trade  and  commerce 
requires  drafts  drawn  in  one  state  on  another  to  be  considered 
as  foreign  bills.  In  some  of  the  early  decisions  they  were 
held  to  partake  of  the  character  of  foreign  bills,  i  or  were 
deemed  foreign,  in  respect  to  the  protest  and  proof  of  dis- 
honor. -2  So  far  as  the  relations  of  business  are  concerned,  no 
distinction  can  be  reasonably  made  between  bills  drawn  in 
England  on  France,  or  in  France  on  Spain,  and  bills  drawn 
in  Ohio  on  New- York,  or  in  Iowa  on  Louisiana.  3  The  form 
of  the  government  does  not  affect  the  question  a  hair's  breadth; 
nor  does  the  mere  circumstance  of  distance  determine  it.  The 
more  material  consideration  is,  that  each  state  is  in  regard  to 
the  others  sovereign  in  its  political  organization  and  govern- 
ment, having  municipal  laws  and  a  jurisdiction  of  its  own, 
excluding  those  of  the  other  states,  though  co-existing  with 
the  laws  and  jurisdiction  of  the  central  government  in  rela- 
tion to  certain  matters  of  general  concern.  4 

1  Buckner  v.  Finley  and  Van  Lear,  2  Peters  U.  S.  R.,  686. 
1  Townsley  v.  Sumrall,  2  Peters  R.,  170;  Wells  v.  Whitehead,  supra. 
1  Atwater  v.  Streets,  1  Doug.,  (Mich.,)  465;  Carter  v.  The  Union  Bank,  7 
Humph.  (Tenn.,)  R.,  548. 
4  The  question  of  damages  will  be  considered  hereafter. 


held  that  a  protest  regularly  made  in  due  form,  was  necessary  to  a  recovery 
on  it  in  the  courts  of  Kentucky;  and  that  the  presentation  and  noting  for  non- 
payment must  be  made  by  the  notary  himself,  unless  there  be  a  different  cus- 
tom established  at  the  place  where  the  protest  is  made.  See  McLane  v.  Fitch 
&  Chambers,  4  B.  Monroe,  600;  3  Hill.  63. 

Hartridge  v.  Wesson.  4  Geo.,  101.  It  was  admitted  in  this  case  that  by  the 
law  merchant  it  is  necessary  for  the  plaintiffs  to  aver  protest  of  a  bill  or  draft 
drawn  in  one  state  on  another;  but  held  that  the  statute  of  1826  had  materially 
altered  the  law  in  this  and  other  respects.  Decided  in  1848. 

Nelson  v.  Fotterall,  7  Leigh,  179,  reviews  the  law  on  the  subject  of  protests 
for  non-payment,  and  considers  what  circumstances  may  excuse  presentment 
on  the  very  day. 

Duncan  v.  Course,  1  Mill,  (Const.  R.,  So.  Car.,)  100.  In  this  action  it  was 
adjudged  that  a  bill  of  exchange  drawn  by  a  person  in  Charleston,  on  a  person 
in  New-York,  is  a  foreign  bill;  and  that  if  not  protested  for  non-acceptance, 
though  notice  be  duly  given  of  its  dishonor,  the  holder  makes  it  his  own,  and 
discharges  the  indorser.  Decided  in  1817. 


584  BILLS   OF  EXCHANGE  AND  PROMISSORY    NOTES. 

As  a  general  rule  promissory  notes  stand  on  the  footing  of 
inland  bills  of  exchange,  and  need  not  be  protested.  1  The 
exceptions  to  this  rule  arise  out  of  statutory  enactments, 
which  are  different  in  the  different  states.  2  Indeed,  promis- 
sory notes,  not  being  negotiable  at  common  law,  derive  their 
character  from  the  statutes  of  the  state  where  they  are  made;  3 
and  are  by  courtesy  enforced  in  the  others  according  to  the 
legal  effect  given  to  them  by  the  lex  loci  contractus.  4  If  made 
in  one  state  and  indorsed  in  another,  the  contract  of  the 
indorser  is  governed  by  the  laws  of  the  state  where  the 
indorsement  is  made;  and  it  has  been  suggested  that  a  promis- 
sory note  made  in  one  state  and  indorsed  over  in  another,  may 
be  treated  as  a  foreign  bill,  in  respect  to  the  protest  and 
proof.  5  But  a  protest  of  a  promissory  note  is  not  necessary 
in  this  case  in  order  to  charge  the  indorser,  nor  as  proof  of 
non-payment  on  demand.  6 

As  already  stated,  no  protest  on  inland  bills  is  either 
required  or  allowed  by  the  common  law;  7  and  it  has  long 

1  Burke  v.  McKay,  2  Howard  TJ.  S.,  66  •  Young  v.  Bryan,  6  "Wheat.,  146. 

*  See  former  chapter  of  indorsements  and  notes;  Read  v.  Bank  of  Kentucky, 
1  Monroe  R.,  91;  Hartridge  v.  Wesson,  4  Geo.j  101. 

3  See  notes  on  a  former  page. 

*  Aymar  v.  Sheldon.  12  Wend.,  439;  Hix  v.  Brown,  12  John.  R.,  142;  Dow 
v.  Russell,  12  N.  Hamp.,  49. 

8  Carter  v.  Burley,  9  N  .Hamp.  ,558 ;  but  see  Kirtland  v.  Wanzer,2  Duer  R. .  278. 

fl  Smith  v.  Little,  10  N.  Hamp.,  526;  Bay  v.  Church,  15  Conn.,  15. 

7  3  Kent's  Com.,  93;  Chitty  on  Bills,  464.  "  An  indorsed  note,  although  it 
may  have  a  similitude  to,  and  an  operation  like  a  bill  of  exchange,  is  not  one, 
technically  speaking;  and  it  is  not  necessary  to  prove  its  dishonor  by  a  protest, 
even  where  the  maker  and  indorser  reside  in  different  governments.  Smith  v. 
Little,  10  N.  Hamp.,  532;  Nicholls  v.  Webb,  8  Wheat.,  326;  3  Pick.,  414. 

In  Bay  v.  Church,  15  Conn.  R.,  15,  it  was  distinctly  held  that  a  notarial 
protest  is  not  necessary  to  charge  the  indorser  of  a  promissory  note  made  in 
one  state  and  payable  in  another,  and  indorsed  over  to  a  citizen  of  the  latter. 
The  same  decision  was  made  in  Young  v.  Bryan,  6  Wheat.,  146;  and  the  same 
principle  was  recognized  in  Nicholls  v.  Webb,  supra,  and  in  the  Union  Bank  v. 
Hyde,  6  Wheat.,  572. 

In  Kirtland  v.  Wanzer,  2  Duer  R.,  278,  it  was  held  that  a  note  dated  in 
New-York,  payable  in  New  Orleans,  and  made  by  a  firm  residing  at  Memphis, 
in  Tennessee,  is  not  to  be  regarded  as  a  foreign  bill  of  exchange  so  as  to  permit 
the  certificate  of  protest  made  in  Louisiana,  to  be  read  in  evidence  in  the  courts 
of  this  state.  This  decision  was  made  in  June,  1853,  by  the  Superior  court  of 
the  city  of  New- York,  which  is  universally  acknowledged  to  be  high  authority 
in  all  matters  relating  to  the  law  merchant. 


PROCEEDINGS   ON    NON-PAYMENT,   NOTICE.  585 

been  the  settled  rule  of  commercial  law  in  this  country  and 
in  England,  that  protest  of  inland  bills  by  a  notary  is  neither 
necessary  or  material  under  that  law  as  modified  by  statute,  i 
In  England  a  protest  is  allowed  by  statute  on  inland  bills  of 
a  certain  description,  and  was  at  one  time  thought  nec» 
to  enable  the  holder  to  recover  interest;  2  but  subsequent  and 
uniform  practice  confirmed  by  a  late  decision,  has  settled  that 
it  is  superfluous  even  for  that  purpose.  J  In  this  country  the 
like  permission  is  given  in  many  of  the  states,  in  respect  to 
both  promissory  notes  and  inland  bills;  and  in  this  state  the 
notarial  certificate  of  presentment  and  non-acceptance  or  non- 
payment of  bills  and  notes,  and  of  the  service  of  notice  thereof 
on  the  parties  to  the  same,  specifying  the  mode  of  giving  such 
notice,  is  made  presumptive  evidence  of  the  facts  stated  in  the 
certificate;  unless  the  defendant  denies  under  oath  the  dis- 
honor of  the  note  or  bill,  or  the  receiving  of  notice,  -i  This 
certificate  may  be  drawn  up  at  any  time,  5  and  must  shew 
presentment  for  payment  and  the  giving  of  notice  of  non- 
payment by  the  notary  himself.  6 

The  protest  should  be  made  as  of  the  day  on  which  the  bill 
or  note  becomes  payable,  that  is  to  say,  on  the  third  or  last 
day  of  grace;  though  it  need  not  be  drawn  up  and  completed 
in  form  until  afterwards.  7  It  should  bear  date  or  shew  that 
the  protest  was  made  on  that  day.  8 

The  demand  of  payment  and  protest  must  be  made  according 

1  The  exceptions  to  the  rule  stated  in  the  text  are  very  rare,  and  always 
created  by  statute  or  loca'  usage;  3  Kent's  Com.,  94,  7th  ed.,  note. 

9  9  aad  10  Wra.  3,  c.  17;  3  and  4  Anne,  c.  9;  Harris  v.  Benson,  2  Stra.,  910 

1  "Windle  v.  Andrews,  2  B.  and  Aid.,  696;  2  Stark.,  425.  Under  the  English 
statutes  the  protest  of  inland  bills  is  made  on  the  day  after  the  third  or  last 
day  of  grace;  and  the  protest  is  required  to  be  sent  or  notice  of  it  given  to  the 
proper  parties  within  fourteen  days. 

4  2  R.  S.«,  382,  3.  3d  ed. 

*  Cayuga  Co.  Bank  v.  Hunt,  2  Hill  R.,  635. 

6  3  Hill  R.,  53;  4  Denio,  460;  4  Hill,  224;  3  Comst.,  442.  On  this  subject 
see  the  former  chapter,  "  Of  non-acceptance  and  proceedings  thereon." 

1  3  Wend.,  456;  Battertons  v.  Porter,  2  Litt.,  388;  id.  207;  4  J.  J.  Marsh, 
332. 

8  Leftly  v.  Mills,  4  Term  R.,  170. 

35 


586  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

to  the  law  of  the  place  where  the  bill  is  payable;  i  it  must  be 
done  by  the  notary  in  person;  he  cannot  delegate  his  official 
authority.  2  If  by  the  law  of  the  place  where  the  protest  is 
made  the  notary  be  authorized,  as  in  Louisiana,  to  employ  a 
sworn  deputy  to  assist  him  in  making  protests  and  delivering 
notices,  a  presentment  and  protest  by  the  deputy  is  good;  for 
the  appointment  of  a  deputy  under  the  authority  of  law,  like 
similar  appointments  made  by  a  sheriff,  clothes  the  person 
appointed  with  an  official  character.  3  This  distinction  is 
consistent  with  the  general  rule,  and  recognizes  the  reason  on 
which  it  is  founded.  The  notary  is  a  known  public  officer,  to 
whose  formal  protests  and  acts  all  countries  give  credit,  so 
that  his  certificate  of  an  act  done  by  him  is  said  to  be  equal 
to  the  testimony  of  two  witnesses;  4  a  circumstance  which 
shews  clearly  that  the  credit  is  given  to  his  acts  as  a  public 
officer,  on  the  understanding  that  they  are  performed  with  the 
accuracy  and  discretion  of  an  experienced  man,  invested  with 
an  official  trust.  5 

The  presentment  of  Toreign  bills  and  protests  for  non-payment, 
are  rendered  necessary  by  the  law  merchant;  but  the  mode  of 
protest  and  the  day  on  which  it  should  be  made  are  prescribed 

'Ellis  v.  Commercial  Bank  of  Natchez,  7  How.  Miss.  R.,  294;  Carter  v. 
Burley,  9  N.  Hamp.,  558;  4  Hill  R.,  129;  Onondaga  Co.  Bank  v.  Bates,  3  HH1 
R.,53;  2  Hill  R  ,230. 

4  Idem,  Chitty  on  Bills,  458;  correspondence  with  the  notaries  of  Liverpool, 
and  opinion  of  Ch.  J.  Nelson,  3  Hill  R.,  55-59. 

8  Carter  v.  Union  Bank,  7  Humph.  (Tenn.,)  R.,  548;  Chenowith  &  Co.  r. 
Chamberlain,  6  B.  Monroe,  60;  Nelson  v.  Fotterall,  7  Leigh,  179. 

4  When  there  is  no  notary  at  the  place,  the  protest  is  attested  by  two  wit- 
nesses. 

8  Kirksey  v.  Bates,  7  Porter  (16  Ala.,)  R.,  529.  "  A  notary  public,  it  has 
been  said,  is  an  officer  known  to  the  law  of  nations;  hence  his  official  acts 
receive  credence  not  only  in  his  own  country,  but  in  all  others  in  which  they 
are  used  as  instruments  of  evidence.  He  is  certainly  recognized  by  the  law 
merchant,  ,and  his  acts  to  some  extent,  are  indispensable  to  its  efficacy.  As  in 
the  case  of  a  foreign  bill,  a  protest  is  necessary  to  shew  its  dishonor  by  the 
refusal  of  the  drawee  to  accept  or  pay  it,  and  can  only  be  excused  by  proving 
either  that  the  drawer  had  no  effects  in  the  hands  of  the  drawee,  and  no  rea- 
sonable expectation  that  the  bill  would  be  honored,  or  that  the  drawer  has 
waived  its  necessity  by  a  promise  to  pay  under  a  knowledge  of  the  circum- 
stances." Notaries  public  are  by  the  common  law  authorized  to  provide  their 
own  seals. 


PROCEEDINGS    ON    NON-PAYMENT,    NOTICE.  587 

by  the  law  of  the  place  where  the  act  is  to  be  done,  i  If 
made  by  a  notary  under  seal,  in  the  usual  form,  the  protest 
is  received  as  due  proof  of  dishonor :  a  and  it  seems  the  nota- 
rial seal  furnishes  prima  facie  evidence  that  the  protest  is  in 
due  form.  3 

It  is  not  necessary  in  this  placs  to  consider  at  length  the 
cases  in  which  a  formal  protest  may  be  dispensed  with.  It 
will  be  sufficient  to  state  the  rule  in  general  terms :  whenever 
notice  of  non-payment  of  a  foreign  bill  is  necessary  to  be 
given,  a  protest  must  also  be  made.  4 

With  the  exceptions  to  be  considered  hereafter,  notice  must 
be  given  of  the  non-payment  of  every  foreign  and  inland  bill, 
promissory  note  and  check,  in  order  to  charge  the  drawer  and 
indorsers  under  the  law  merchant.  Upon  the  principle  that 
the  rights  and  obligations  of  the  parties  are  to  be  determined 
by  the  law  of  the  place  to  which  they  had  reference  in  making 
the  contract,  there  are  some  steps  which  the  holder  must  take 
according  to  the  law  of  the  place  on  which  the  bill  is  drawn. 
It  must  be  presented  for  payment  when  due,  having  regard  to 
the  number  of  days  of  grace  there,  as  the  drawee  is  under 
obligation  to  pay  only  according  to  such  calculation;  and  it 
is  therefore  to  be  presumed  that  the  parties  had  reference  to 
it.  So  the  protest  must  be  according  to  the  same  law,  which 
is  not  only  convenient  but  grows  out  of  the  necessity  of  the 
case.  The  notice,  however,  must  be  given  according  to  the 
law  of  the  place  where  the  contract  of  the  drawer  or  indorser, 

1  Chamoine  v.  Fowler,  8  Wend.,  178.  If  the  protest  be  not  made  by  a 
notary,  it  must  be  proved  that  it  was  made  according  to  the  law  of  the  place. 
Bowen  v.  Newell,  8  Kernan  K.,  290.  The  law  of  the  place  of  payment  deter- 
mines whether  days  of  grace  are  or  are  not  to  be  allowed. 

1  2  Hill  R.,  227;  9  N.  Hamp.,  658. 

*  Carter  v.  Bnrley,  supra. 

4  Chitty  on  Bills,  455;  6  Wheat.,  672;  1  Doug.,  (Mich..)  456.  The  protest 
may  be  excused  by  proving  either  that  the  drawer  had  no  effects  in  the  hands 
of  the  drawee  and  no  reasonable  expectation  that  the  bill  would  be  honored, 
or  that  the  drawer  has  waived  the  necessity  by  a  promise  to  pay  with  know- 
ledge of  the  circumstances,  or  beforehand.  Kirksey  v.  Bates,  7  Porter  R.. 
529;  Caddington  v.  Davis,  1  Comst.  R.,  186;  Union  Bank  v.  Hyde,  6  Wheat. , 
672. 


588  BILLS    OF   EXCHANGE  AND    PROMISSORY  NOTES. 

as  the  case  may  be,  was  made,  such  being  an  implied  condi- 
tion, i 

No  precise  formula  of  words  is  necessary  to  be  used  in 
giving  notice;  it  is  sufficient,  if  the  language  used  is  such  as 
in  express  terms,  or  by  necessary  implication,  to  convey  notice 
to  the  drawer  or  indorsers  of  the  identity  of  the  note  or  bill 
and  that  payment  of  it  on  due  presentment,  has  been  neglected 
or  refused  by  the  maker  or  acceptor.  2  And  it  is  immaterial 
whether  the  notice  be  verbal  or  in  writing.  3 

The  notice  must  describe  so  as  to  identify  the  bill  or  note 
dishonored;  "  the  language  must  be  such  as  to  convey  notice 
to  the  party  what  the  bill  is,  and  that  payment  of  it  has  been 
refused  by  the  acceptor."  4  But  where  a  notice  possessing 

1  Per  Ch.  J.  Nelson,  in  Aymar  v.  Sheldon,  12  Wend.,  439;  Carroll  v.  Upton, 
2  Sand.  R.,  172.  "  The  law  of  the  place  where  a  bill  is  drawn  governs  as  to 
the  mode  and  place  of  the  notice  of  non-acceptance  and  of  non-payment  to  be 
given  to  charge  the  drawer ;  and  a  different  usage  prevailing  at  the  place  where 
the  drawee  resides  or  the  bill  is  presentable,  will  not  be  admitted  to  control 
the  drawer's  liability  "  S.  C.,  on  appeal,  3  Comst.,  272. 

MComst.  R.,  413;  Hartley  v.  Case,  4  Barn,  and  Cress.,  339;  Reedy  v. 
Sexias,  2  John.  Gas.,  337;  9  Wend.,  279;  9  Peters,  33;  11  Wheat.,  431;  23 
Wend.,  620;  14  Conn.,  363;  10  Shep.,  392. 

3  Cuyler  v.  Stevens,  4  Wend.,  566;  Glasgow  v.  Prattle,  8  Missouri  R..  336; 
Phillips  v.  Gould,  8  Car.  and  Payne,  356. 

4  Hartley  v.  Case,  supra;  Abbott,  Ch.  J.,  "There  is  no   precise   form  of 
words  necessary  to  be  used  in  giving  notice  of  the  dishonor  of  a  bill  of  ex- 
change, but  the  language  must  be  such  as  to  convey  notice  to  the  party  what 
the  bill  is,  and  that  payment  of  it  has  been  refused  by  the  acceptor."     The 
letter  in  this  case,  written  by  an  attorney,  contained  a  demand  of  payment  of 
the  sum  of  150Z,  due  on  a  draft  by  Mr.  Case  on  Mr.  Case,  to  prevent  the 
necessity  of  law  proceedings,  and  was  held  insufficient  notice,  because  it  did 
not  shew  the  bill  to  have  been  dishonored.     Bank  of  Alexandria  v.  Swan,  9 
Peters  U.  S.  Rep.,  33.     The  misdescription  complained  of  in  this  case,  is  in 
the  amount  of  the  note.     The  note  is  for  $1400,  and  the  notice  describes  it  as 
for  the  sum  of  $1457.     In  all  other  respects  the  description  is  correct;  and  in 
the  margin  of  the  note  is  set  down  in  figures  1457,  and  the  special  verdict  finds 
that  the  note  in  question  was  discounted  at  the  bank  as  and  for  a  note  of 
$1457;  and  the  question  is,  whether  this  was  such  a  variance  or  misdescription 
as  might  reasonably  mislead  the  indorser  as  to  the  note,  for  payment  of  which 
he  was  held  responsible.     And  it  was  held  that  the  variance  was  not  material, 
it  being  shewn  by  the  special  verdict  that  the  bank  held  no  other  note  made 
and  indorsed  by  the  same  persons. 

Mills  v.  The  Bank  of  U.  S.,  11  Wheat.,  431.  The  notice  in  this  case  in  des- 
cribing the  note,  stated  it  to  be  dated  20th  Sept.,  1819,  whereas  it  bore  date 


PROCEEDINGS   ON    NON-PAYMENT,    NOTICE.  589 

otherwise  every  legal  requisite,  misdescribes  the  note  or  bill 
to  which  it  refers,  it  is  to  be  determined  as  a  question  of  fact, 
or  with  reference  to  the  circumstances  of  the  case,  whether  the 
defendant  could  be  misled  by  the  misdescription.  I  And  for 
the  purpose  of  solving  this  question,  it  may  be  shewn  in  aid 
of  the  defect  that  there  was  no  other  note  in  existence  to 
which  the  description  contained  in  the  notice  could  be  applied.  2 
Proof  of  such  accessory  facts  may  be  given,  because  they  go 
to  shew  that  the  indorser  was  duly  notified;  and  the  evidence 
is  not  objectionable  on  the  ground  that  it  tends  to  vary  the 
terms  of  a  written  instrument,  because  the  notice  may  be 
legally  either  written  or  verbal,  and  the  proof  is  not  given  to 
vary  the  terms  of  the  notice. 

There  have  been  several  cases  where,  upon  a  misdescription 
of  a  bill  or  note  in  the  notice,  it  has  been  left  to  the  jury  to 
pass  upon  the  question  of  identity,  and  say  whether  the 
drawer  or  indorser  had  been  misled;  3  and  there  are  other 
cases  where  it  has  been  held  that  the  sufficiency  of  a  written 
notice  is  a  question  of  law  to  be  disposed  of  by  the  court  ;  4 
so  that  the  doctrine  on  the  subject  is  not  perfectly  settled. 

1  McKnight  v.  Lewis,  5  Barb.  R.,  681. 

*  Cayuga  Co.  Bank  v.  Warden,  1  Comst.  R.,  413.  In  both  of  these  case*. 
the  amount  of  the  note  was  mis-stated  in  the  notice;  so  in  Reedy  v.  Sexias, 
supra,  2  Selden  R..  19. 

1  Reedy  v.  Sexias,  2  John.  Cas.,  337;  Bank  of  Rochester  v.  Gould,  9  Wend  , 
279;  Smith  v.  Whiting,  12  Mass.  R.,  6;  5  Barb.,  681;  1  Comst.  R.,  418; 
Downer  v.  Remer,  21  Wend.,  10;  S.  C.,  23  id.  670,  and  25  id.  277. 

4  Mills  v.  Bank  of  U.  S.,  11  Wheat  ,  431;  Bank  of  Alexandria  v.  Swan.  9 
Peters,  33;  Beauchamp  v.  Cash,  Dow.  and  Ry.  N.  P.  Ca».,  8;  Ransom  T. 
Mack,  2  Hill  R.,  687. 

20th  of  July,  1819;  and  it  was  held  that  the  jury  were  correctly  charged  that 
if  they  found  there  was  no  other  note  payable  in  the  office  at  Chilicothe,  where 
this  note  was  payable,  drawn  by  the  same  men  and  indorsed  by  the  defendant, 
the  mistake  in  respect  to  the  date  would  not  impair  the  defendant'!  liability, 
and  the  plaintiff  would  be  entitled  to  recover. 

Cayuga  Co.  Bank  v.  Warden,  1  Comst .  414.  The  note  in  this  case  was  for 
$600,  and  the  notice  described  it  as  a  note  for  three  hundred  dollars,  but  had 
the  figures  "600"  written  on  the  margin,  and  it  was  shewn  that  this  was  the 
only  note  in  the  bank  made  and  indorsed  by  the  same  parties;  and  thi«  eyi- 
dence  was  held  competent. 

Kilgore  v.  Bulkley,  14  Conn.  R.,  862.  The  notice  is  good,  if  the  indoncr 
be  not  misled  by  it. 


590  BILLS   OF  EXCHANGE   AND    PROMISSORY  NOTES. 

But  it  appears  to  be  well  settled  that  an  immaterial  vari- 
ance between  the  description  contained  in  the  notice  and  the 
bill  or  note  referred  to,  will  not  vitiate  it.  To  render  the 
variance  fatal,  it  must  be  such  that  under  the  circumstances 
of  the  case,  ths  notice  conveys  no  sufficient  knowledge  to  the 
indorsers  of  the  identity  of  the  particular  note  or  bill  which 
has  been  dishonored,  i  The  circumstances  then,  are  a  proper 
subject  of  inquiry;  and  a  dispute  arising  in  respect  to  these, 
necessarily  carries  the  question  to  the  jury.  2  If  the  notice 
describe  a  promissory  note  correctly,  so  far  as  it  goes,  men- 
tioning simply  the  makers'  names,  the  amount  and  the  indor- 
ser's  name,  the  court  will  not  infer  the  existence  of  other 
notes  to  which  the  description  might  apply  and  thus  render 
the  notice  uncertain.  3  But  clearly  the  existence  of  other 
notes  bearing  that  description  might  be  proved,  so  as  to  vitiate 
the  notice;  on  the  same  principle  that  permits  proof  of  the  non- 
existence  of  other  notes  by  way  of  rendering  the  notice 
certain  in  its  application  to  the  note  in  suit.  4 

1  Mills  v.  Bank  of  U.  S.,  supra ;  Bank  of  Alexandria  v.  Swann,  supra •  1 
Comst.,  417. 
a  McKnight  v.  Lewis,  supra. 

3  Youngs  v.  Lee,  2  Kernan  R.,  551.    The  notice  in  this  case  was  in  these 
words:  "  New- York,  October  7,1851.     Mr.  Charles  M.  Lee,  Rochester,  N. 
Y.     Sir  :  Please  to  take  notice  that  a  promissory  note,  drawn  by  Bell  &  Good- 
man, for  $1000,  endorsed  by  you,  is  protested  for  non-payment,  and  the  holders 
look  to  you  for  payment  thereof.     Your   obedient   servant,  A.  R.  Rogers, 
Notary  Public."     And  it  was  held  good,  though  it  did  not  contain  so  many 
descriptive  particulars  as  it  might,  the  description  being  true  so  far  as  it  went. 

4  Cayuga  Co.  Bank  v.  Warden,  supra;  Shelton  v.  Braithwaite,  7  M.  and  W., 
436. 

A  few  of  the  cases  on  the  subject  may  serve  to  illustrate  the  law.  -Reedy  v. 
Sexias,  was  a  case  of  misdescription ;  the  note  produced  on  the  trial  was  for 
$1216  and  50  cents  j  at  the  bottom  of  the  note  were  the  figures  1216  dollars 
and  52  cents,  and  the  note  was  described  by  the  notary  in  the  notice  as  given 
for  the  latter  sum.  The  judge  left  the  question  to  the  jury,  whether  the  note 
produced  and  the  one  described  and  intended  by  the  notice  were  the  same. 
On  a  motion  to  set  aside  the  verdict  found  under  such  direction,  the  court  say, 
"  The  law  does  not  prescribe  any  form  of  notice  to  an  indorser.  It  is  not, 
perhaps,  requisite  to  specify  the  amount  of  the  note.  The  notice  was  suffi- 
cient to  put  the  defendant  on  inquiry,  and  to  prepare  him  to  pay  it  or  defend. 
It  is  enough  if  the  jury  was  satisfied  that  the  notice  referred  to  the  same  note 
intended  by  the  plaintiff,  and  was  so  understood  by  the  defendant.  It  was  in- 
cumbent on  the  defendant  to  shew  some  uncertainty  in  the  notice,  tending  to 


PROCEEDINGS   OS    SOX-PAYMENT,    NOTICE. 


591 


A  misstatement  of  the  notary  in  the  notice  in  regard  to  an 
act  done  by  him,  is  a  different  matter.  For  instance,  if  the 
notice  bear  date  on  the  third  day  of  grace  and  state  that  the 
note  in  question  was  last  evening  protested  for  non-payment, 
or  if  the  notice  bear  date  on  the  fourth  day  of  July,  and  state 
that  payment  of  the  note  had  been  that  day  demanded  and 
refused,  it  is  not  a  question  to  be  submitted  to  the  jury 
whether  or  not  the  indorser  has  been  misled  by  the  mistake,  i 
There  are  decisions  to  the  contrary,  holding  that  the  notice  is 
sufficient  if  it  does  not  mislead  the  party,  and  allowing  the 

1  Ransom  v.  Mack,  2  Hill  R.,  587. 


mislead  him ;  as  other  notes  indorsed  by  him  under  similar  circumstances."    2 
John.  Cas.,  337. 

In  Smith  v.  Whiting,  12  Mass.,  6,  the  mistake  in  the  notice  was  that  it  des- 
cribed the  note  as  made  by  Jotham  Cuthing,  when  it  was  in  fact  made  by 
Jotham  Cuthman  ;  and  it  was  admitted  that  there  was  no  note  in  the  bank 
giving  the  notice  indorsed  by  the  defendant.  Held  that  it  was  properly  left  to 
the  jury  to  decide,  whether  he  must  not  have  known  that  the  notice  referred 
to  the  only  note,  which,  it  seems,  lay  in  the  bank,  on  which  he  was  liable  as 
promissor  or  indorser. 

In  the  Bank  of  Rochester  v.  Gould,  9  Wend.,  279,  the  note  was  given  by 
George  Fisher  for  $375,  and  the  notary  in  his  notice  stated  it  to  be  a  note  for 
$457.50,  that  sum  being  the  aggregate  of  principal  and  interest;  and  there  was 
no  other  note  of  Fisher's  indorsed  by  the  defendant  held  by  plaintiff.  Held 
that  the  charge  to  the  jury  that  if  they  believed  that  the  defendant  knew  what 
note  it  was  that  had  been  protested,  or  had  not  been  misled  by  the  notice,  they 
ought  to  find  a  verdict  for  the  plaintiff,  was  correct. 

In  Downer  v.  Remer,  (21  Wend.,  23  id.  670,  25  id.  277,)  there  was  a  similar 
mistake;  the  notice  stated  the  amount  to  be  $999.52  instead  of  $599.52,  which 
was  the  true  amount,  and  the  jury  decided  that  the  defendant  was  not  misled 
by  the  error;  the  supreme  court  decided  as  in  the  case  above,  but  the  court  of 
errors  reversed  that  decision,  and,  as  there  was  another  question  involved  in 
the  case,  it  is  not  certain  on  which  of  the  points  the  decision  turned  in  that 
court. 

Where  the  notarial  record  states  that  the  demand  of  payment  was  made  at 
a  bank,  without  naming  the  hour,  the  presumption  will  be  that  the  demand 
was  made  in  banking  hours.  Fleming  v.  Fulton,  6  How.  Miss.,  473. 

Ross  v.  Planters  Bank,  5  Humph.,  (Tenn.J  836.  Where  the  notary  makes 
a  mistake  as  to  the  date  of  the  note  in  the  notice  furnished  to  the  indorser.  the 
mistake  may  be  corrected  on  the  trial.  The  copy  of  the  note  on  the  back  of 
the  protest  shewed  the  date  22  Nov.,  1844,  which  had  not  yet  arrived,  instead 
of  22  Nov.,  1843,  which  was  the  true  date. 
Rowan,  et  al.  v.  Odenheimer  and  al.,  5  Smedes  and  Marsh.,  44.  The  notice 


592  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

jury  to  determine  that  as  a  question  of  fact,  i  But  there  is  a 
clear  distinction  between  an  informal  and  an  insufficient  notice, 
between  a  notice  which  is  defective  in  the  description  of  the 
note  or  bill,  and  one  which  does  not  shew  that  the  paper  has 
been  dishonored.  If  the  notice  states  a  presentment  which  is 
too  late  or  premature,  it  is  equivalent  to  notifying  the  drawer 

1  Ontario  Bank  v.  Petrie,  3  Wend.,  456.  The  draft  in  this  case  fell  due  on 
Sunday  the  31st  of  August;  was  presented  on  the  30th,  and  the  notice  dated 
on  that  day,  being  a  printed  blank  filled  up  with  names  and  amount,  stated 
that  it  was  protested  for  non-payment  last  evening.  Crocker  v.  Getchell,  23 
Maine  R.,  392.  In  this  case  the  notice  stated  that  the  note  became  due  this 
day  and  is  protested  for  non-payment,  whereas  it  became  due  and  was  pro- 
tested the  day  previous,  and  the  notice  was  held  sufficient-,  it  being  such  as 
under  the  circumstances  could  not  mislead  the  party  to  whom  it  was  directed. 


described  the  note  as  being  for  one  dollar  less  than  the  true  sum;  held  sufficient 
to  uphold  the  verdict  against  an  indorser. 

Moorman  v.  The  Bank  of  Ala,  (3  Porter,)  12  Ala.,  353.  The  protest  des- 
cribed the  name  of  a  subsequent  indorser  as  Pyron,  and  the  bill  produced 
shewed  his  name  to  be  Byron;  and  the  notice  was  held  sufficient. 

If  there  be  more  than  one  bill  to  which  the  notice  may  apply,  it  lies  on  the 
defendant  to  prove  that  fact.  Shelton  v.  Braithwaite,  7  M.  and  W.,  436.  If 
a  note  be  improperly  called  a  bill  it  is  no  objection  to  the  notice.  Messenger 
v.  Southey,  1  Man.  and  Gr.,  76;  1  Scott,  N.  R.,  180;  nor  if  a  bill  be  impro- 
perly called  a  note.  Stockman  v.  Parr,  11  M.  and  W.,  809.  But  a  notice  di- 
rected to  an  indorser  describing  the  bill  as  drawn  by  him  is  defective,  though 
every  indorser  is  in  the  nature  of  a  new  drawer.  Beauchamp  v.  Cash,  1  D. 
and  R.,  N.  P.  C.,  3;  this  case  is  overruled  by  Mellersh  v.  Rippen.  11  Eng. 
Law  and  Eq.  R.,  599.  A  notice  of  dishonor  sent  by  the  indorsee  of  a  bill  of 
exchange  to  the  drawer,  stated  the  amount  of  the  bill  correctly,  but  erro- 
neously described  it  as  drawn  by  the  acceptor  and  accepted  by  the  drawer. 
Held  a  sufficient  notice.  Beauchamp  v.  Cash,  1  Dowling  and  Ryland,  3,  is  not 


Cook  v.  Litchfield,  5  Selden  R.,  279;  this  action  was  brought  against  the 
defendant  as  indorser  of  four  promissory  notes,  at  nine,  ten,  eleven  and  twelve 
months  after  date,  each  bearing  the  same  date  and  being  given  for  $740;  the 
only  difference  between  them  being  in  the  time  they  had  to  run.  And  the  fol- 
lowing notice  was  adjudged  sufficient  in  respect  to  the  note  which  first  fell  due 
and  was  protested.  "  New-York,  Jan.  5th,  1850.  $740  and  interest.  Please 
to  take  notice  that  a  promissory  note  made  by  J.  L.  Carew,  for  $740,  with 
interest,  dated  April  2d,  1849,  endorsed  by  you,  was  on  the  day  that  the  same 
became  due,  duly  protested  for  non-payment,  and  that  the  holders  look  to  you 
for  the  payment  thereof."  The  other  notices,  which  were  in  the  same  words, 
with  the  difference  of  date,  except  that  in  two  of  them  the  amount  of  interest 
was  stated  in  the  margin,  were  held  insufficient,  reversing  the  judgment  of  the 
N  .  Y.  Superior  court,  5  Sand.  .  330.  These  last  notices  described  the  first  note 
as  accurately  as  they  did  either  of  the  others. 


PROCEEDINGS   ON    NON-PAYMENT,    NOTICE.  593 

or  indorser  that  he  is  discharged :  it  certainly  does  not  inform 
him  that  the  paper  has  been  dishonored,  i 

The  fact  to  be  communicated  in  some  form  is,  that  the  note 
or  bill  has  been  dishonored  by  the  default  of  the  acceptor  or 
promisor;  and  this  may  be  done  in  any  language  which  con- 
veys the  information  to  the  indorser  in  terms  or  by  reasonable 
implication.  If  the  note  or  bill  be  payable  at  a  bank,  it  is  the 
duty  of  the  maker  or  acceptor  to  come  there  and  pay  it  on  the 
last  day  of  grace;  and  if  he  does  not,  a  notice  stating  the  date 
and  terms  of  the  note,  shewing  that  it  has  become  due,  and 
avering  that  it  is  unpaid,  is  equivalent  to  a  notice  of  dishonor.  2 
But  such  a  notice  is  clearly  not  sufficient  where  the  instrument 
is  drawn  payable  at  large;  for  in  this  case  a  statement  that  it 
has  not  been  paid  is  entirely  consistent  with  the  fact  that  it 
has  not  been  dishonored.  3 

There  being  no  dispute  about  the  facts,  the  sufficiency  of 
the  notice  is  a  question  of  law;  and  where  it  is  given  in 
writing,  the  construction  of  the  notice  belongs  to  the  court.  4 

1  Ransom  v.  Mack,  supra;  Ontario  Bank  v.  Petrie  is  overruled;  and  Judge 
Bronson  intimates  that  the  doctrine  previously  held  in  this  state  in  respect  to 
receiving  testimony  in  aid  of  a  defective  notice  has  fallen  with  it.  But  in  that 
particular  the  recent  cases  are  against  him.  2  Hill  R.,  687;  1  Comst.,  417;  5 
Barb.,  681;  Wynn  v.  Alden,  4  Denio.  163.  In  this  case  the  notice  stated  that 
the  note  had  been  this  day  presented  for  payment,  and  payment  refused,  and 
was  not  dated  at  all.  Held  defective. 

1  The  notice  in  Smith  v.  Whiting,  was  of  this  description,  12  Mass.,  6,  bat 
no  question  was  raised  in  regard  to  its  sufficiency.  3  Met.,  505. 

*  Gilbert  v.  Dennis,  3  Metcalf,  495.  The  opinion  by  Chief  Justice  Shaw,  fn 
this  case,  is  a  pattern  of  style  and  legal  reasoning.  Dole  v.  Gold,  6  Barb., 
490.  The  notice  which  was  held  insufficient  in  Gilbert  v.  Dennis,  waa  in  these 
words  :  "  Boston,  May  4,  1838.  Mr.  Lewis  Dennis.  Sir  :  I  have  a  note  signed 
by  C.  E.  Bowers,  and  indorsed  by  you,  for  seven  hundred  dollars,  which  is  due 
this  day  and  unpaid.  Payment  is  demanded  of  you.  C.  C.  Gilbert."  And 
it  was  held  insufficient  because  it  did  not,  by  necessary  implication  or  rea- 
sonable intendment  amount  to  an  averment  or  intimation  that  payment  had 
been  demanded  and  refused,  or  that  the  note  had  been  otherwise  dishonored. 
8  Met.,  506.  The  notice  in  Dole  v.  Gold,  6  Barb.,  490,  was  as  follows  : 

"  Buffalo,  Sept.  8th,  1847.  Dear  Sir  :  A  note  of  $22.50,  made  by  Andrew 
Cole,  and  payable  to  your  order,  and  endorsed  by  you,  is  due  this  day,  and  has 
not  been  paid.  You  will  therefore  take  notice  that  I  am  the  owner  and  holder 
of  said  note,  and  look  to  you  for  the  payment  of  the  same.  Yours,  8tc.,  C.  R. 
Gold  "  and  was  held  insufficient  for  the  same  reason. 

«  Spencer  v.  The  Bank  of  Salina,  3  Hill,  520;  Dole  T.  Gold,  supra;  and  3 
Met.,  495. 


594  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

When  the  notice  conveys  the  necessary  information  in  express 
terms,  describing  accurately  the  note  or  bill,  no  question  can 
arise  in  respect  to  the  contents  and  sufficiency  of  the  notice. 
But  when  it  is  defective  on  its  face  in  consequence  of  not 
shewing  that  the  paper  has  been  dishonored,  or  when  the 
information  conveyed  in  the  notice  is  to  be  implied  from  the 
language  employed,  it  is  for  the  court  to  pronounce  upon  the 
sufficiency  of  the  notice  as  a  matter  of  law.  i  And  in  doing 
this  the  court  gives  to  the  words  used  their  ordinary  and  com- 
mon signification,  construing  the  language  in  reference  to  its 
accustomed  meaning  when  applied  to  similar  subjects,  and 
with  reference  to  the  terms  of  the  note  or  bill  and  the  time 
and  place  at  which  it  is  payable. 

Thus,  if  the  notice  inform  the  indorser  that  a  note  or  bill 
has  been  protested  for  non-payment,  the  italicised  word  is  to 
be  understood  in  a  popular  sense  and  as  used  among  men  of 
business.  In  a  strict  technical  sense  the  term  is  not  applicable 
to  promissory  notes,  and  means  only  the  formal  declaration 
drawn  up  and  signed  by  a  notary;  but  it  has  acquired  by 
usage  a  more  extensive  signification,  and  when  used  in  its 
popular  acceptation  includes  all  those  acts  which  are  by  law 
necessary  to  charge  an  indorser.  2  Accordingly  where  the 
instrument  is  one  on  which  the  law  authorizes  a  protest, 
notice  that  it  has  been  protested  for  non-payment  is  equiva- 
lent to  an  averment  that  it  has  been  presented  for  payment, 
and  that  payment  thereof  has  been  refused;  for  the  presump- 
tion is  that  the  protest  was  regularly  made,  and  the  protest 

1  In  Ranson  v.  Mack,  supra,  the  notice  stated  a  presentment  for  payment 
one  day  too  late,  and  the  court  decided  as  a  question  of  law,  that  the  notice 
was  defective.  In  Dole  v.  Gold,  the  notice  did  not  shew  that  the  note  had 
been  dishonored;  it  only  stated  that  the  note  had  not  been  paid.  So  in  Gilbert 
v.  Dennis,  the  notice  did  not  state  that  the  note  had  been  dishonored;  it  stated 
merely  that  it  was  due  and  unpaid,  and  that  the  holder  looked  to  the  indorser 
for  payment;  and  in  each  of  these  cases  the  question  arising  on  the  notice  was 
decided  as  one  of  law. 

aCoddington  v.  Davis,  3  Denio,  16;  S.  C.,  1  Comst.  R.,  186.  This  case 
turned  in  part  on  a  question  of  waiver,  and  the  letter  containing  the  waiver 
was  in  these  words,  "Please  not  protest  T.  B.  Coddington's  note,  due  2d 
February,  for  ten  thousand  dollars,  and  I  will  waive  the  necessity  of  the  pro- 
test thereof;"  and  the  court  construed  the  language  in  its  general  sense. 


PROCEEDINGS   ON   NON-PAYMENT,    NOTICE.  695 

when  made  in  regular  form  avers  a  presentment  and  dishonor 
of  the  note  or  bill,  i  Hence  a  statement  in  the  notice  that  a 
bill  of  exchange  or  a  promissory  note  has  been  protested  for 
non-payment,  implies  demand  and  refusal ;  2  and  in  the  case 
of  a  foreign  bill,  the  protest  of  a  notary  not  only  presupposes 
a  proper  demand  and  refusal  to  pay,  but  is  also  the  evidence 
of  these  facts. 

We  have  said  the  notice  to  the  mdorser  should  state 
expressly  or  by  necessary  implication  that  the  bill  or  not*- 
has  been  dishonored;  perhaps  it  would  be  quite  as  accurate 
to  say  that  the  notice  should  inform  the  indorser  that 
the  note  or  bill  has  been  dishonored,  and  that  it  is  im- 
material whether  this  information  be  conveyed  in  express 
words  or  in  terms  that  fairly  and  reasonably  imply  that  the 
instrument  has  been  presented  for  payment  and  dishonored. 
In  some  of  the  English  cases  the  rule  that  "  the  notice  given 
to  the  indorser  should  state  expressly  or  by  necessary  implica- 
tion that  the  bill  has  been  dishonored,"  appears  to  have  been 
applied  with  great  strictness :  3  while  more  recently  the  deci- 

1  Mills  v.  The  Bank  of  U.  S.,  11  Wheat.,  431 ;  Stocken  v.  Collens,  9  Carr. 
and  Payne,  653;  1  Comst.  R.,  414;  9  Wend.,  279;  2  Kernan,  651.  Plattv. 
Drake,  1  Doug.  Mich.  R.,  296,  holds  that  a  notice  of  the  protest  of  a  note  for 
non-payment  is  not  sufficient. 

1  Spies  T.  Xewbery,  2  Doug.  Mich.  R.,  425.  This  was  a  foreign  bill;  and  it 
was  held  that  the  term  protest  used  in  the  notice  implies  demand  and  refusal. 
Saltmarsh  v.  Tuthill,  13  Ala.  (New  Series,)  R.,  390.  A  statement  in  the 
notice  that  a  bill  of  exchange  has  been  protested  for  non-payment,  implies  that 
it  has  been  duly  presented  for  payment. 

*  Hartley  T.  Case,  4  Barn,  and  Cress.,  339,  was  decided  in  1825.  The  letter 
introduced  as  notice  contained  a  demand  of  payment  of  the  sum  of  £150,  doe 
on  a  draft  by  Mr.  Case  on  Mr.  Case,  to  prevent  the  necessity  of  law  proceedings: 
And  Abbott,  Ch.  J.,  decided  it  insufficient,  saying  "there  U  no  precise  form 
of  words  necessary  to  be  used  in  giving  notice  of  the  dishonor  of  a  bill  of  ex- 
change, but  the  language  must  be  such  as  to  convey  notice  to  the  party  what 
the  bill  is,  and  that  payment  of  it  has  been  refused  by  the  acceptor. 

Solarte  v.  Palmer,  7  Bing.,  630,  decided  in  the  Exchequer  Chamber  in  1881, 
and  affirmed  in  the  House  of  Lords,  in  1834,  1  Bing.  N.  C.,  194,  involved  the 
question  as  to  the  sufficiency  of  a  notice  contained  in  the  letter  of  an  attorney 
to  the  indorser  to  this  effect:  "  A  bill  for  683^  drawn  by  K.  on  J.  &  Co.,  and 
bearing  your  indorsement,  has  been  put  into  our  hands  by  A.  with  directions 
to  take  legal  measures  for  the  recovery  thereof,  unless  immediately  paid  to 
us."  And  the  notice  was  held  insufficient,  the  court  using  this  formula  to 


596  BILLS   OF   EXCHANGE  AND    PROMISSORY  NOTES. 

sions  shew  a  disposition  to  seize  hold  of  any  word  in  the  notice 
that  may  reasonably  sustain  the  inference  that  the  note  or  bill 
has  been  dishonored.  1  And  though  the  rule  itself  has  not 

1  The  following  have  been  held  sufficient  notices  of  dishonor; 

"A  bill  drawn,  &c.,  due  yesterday,  is  dishonored  and  unpaid;  and  I  am 
desired  to  give  you  notice  thereof  to  request  that  the  same  be  immediately 
paid."  Woodthorpe  v.  Lawes,  2  M.  and  W.,  109. 

"  The  bill  for  £ — ,  drawn  by  you,  is  this  day  returned  wit h  charges,  to  which 
your  immediate  attention  is  requested."  Grugeon  v.  Smith,  6  Ad.  and  Ell., 
499. 

"  I  am  desired  by  Mr.  Hedger  to  give  you  notice  that  a  promissory  note  &c., 
became  due  yesterday,  and  has  been  returned  unpaid,  and  I  have  to  request 
that  you  will  please  remit  the  amount  thereof  with  Is  Qd  noting,  &c."  Hedger 
v.  Steavenson.  2  M.  and  W.,  799. 

"Tour  note  has  been  returned  dishonored."  Edmonds  v.  Gates,  2  Jurist, 
183;  Shelton  v.  Brathwaite,  7  M.  and  "W.,  436;  Stocken  v.  Collin,  9  C.  and  P., 
653;  S.  C.,  7  M.  and  W.,  515,  are  to  the  same  effect. 

•'  James  Courts  acceptance  due  this  day  is  unpaid  and  I  request  your  imme- 
diate attention  to  it."  Bailey  v.  Porter,  14  M.  and  W.,  44. 

The  later  cases  clearly  do -not  hold  the  rule  so  strictly  as  those  which  shortly 
after  followed  the  decision  in  Solarte  v.  Palmer.  Where  the  notice  contains 
any  expression  indicating  that  the  bill  has  been  noted,  or  where  it  is  stated  to 
have  been  dishonored,  it  is  now  held  sufficient;  indeed.  Lord  Campbell,  C.  J., 
does  not  hesitate  in  a  recent  case  to  express  his  regret  that  the  decision  in 
Solarte  v.  Palmer  was  ever  made,  and  says  expressly  that  it  has  caused  much 
confusion. 

In  Strange  v.  Price,  10  Adol.  and  Ellis,  125,  Lord  Denman  says  :  "  I  have 
some  doubt  as  to  the  reasoning  on  which  the  decisions  in  Hartley  v.  Case  and 
in  Solarte  v.  Palmer  have  turned;  but  the  decision  in  the  latter  case,  as  was 
observed  in  the  court  of  Exchequer,  is  binding,  and  I  think  it  authorizes  our 
saying  here  that  the  notice  is  not  sufficient.  As  in  Solarte  v.  Palmer,  so  here 
the  notice  does  not  convey  full  information  that  the  bill  has  been  dishonored. 
In  all  the  cases,  where  such  notices  have  been  held  defective,  it  might  have 


express  the  rule,  "  the  notice  should  at  least  inform  the  party  to  whom  it  is 
addressed,  either  in  express  terms  or  by  necessary  implication,  that  the  bill  has 
been  dishonored,  and  that  the  holder  looks  to  him  for  payment  of  the  amount." 
Following  this  decision  the  English  courts  held  successively  the  following  notices 
insufficient,  namely,  a  notice  describing  a  note  as  falling  due  yesterday  and  re- 
turned unpaid,  and  asking  for  the  amount,  (Boulton  v.  Welsh,  3  Bing.  N.  C., 
688 ;  4  Scott,  425,)  and  a  notice  fully  describing  a  bill  and  speaking  of  it  as 
lying  due  and  unpaid  at  my  office,  (Phillips  v.  Gould,  8  C.  and  P.,  355,)  and 
a  notice  describing  a  bill  and  saying  that  it  is  not  paid,  and  that  Mr.  Price,  as 
indorser,  is  called  upon  to  pay  the  money,  which  is  expected  immediately, 
(Strange  v.  Price,  10  Ad.  and  Ell.,  125.)  and  a  notice  saying  that  the  bill  I 
took  of  you,  111  2*  6d,  is  took  up,  and  4s  Qd  expenses;  and  the  money  I  must 
pay  immediately.  (Messenger  v.  Southey,  1  Man.  and  Gr.,  76.) 


PROCEEDINGS   ON    NON-PAYMENT,   NOTICE.  597 

been  changed,  it  is  very  evident  that  its  rigor  has  been  sensibly 
modified,  and  that  the  courts  of  England  feel  it  incumbent 
upon  them  to  construe  such  notices  with  fairness  and  liberality, 
giving  to  the  language  used  the  meaning  appropriated  to  it  by 
the  common  sense  of  business  men;  on  the  same  principle 
that  requires  the  terms  of  a  contract  to  be  read  and  under- 
stood iu  their  usual  and  ordinary  signification,  i 

The  rule  in  regard  to  giving  of  notice  has  been  adopted  in 
terms,  and  more  than  once  repeated  in  this  state  in  the  words 
used  in  the  English  decisions.  2  But  it  has  not  been  generally 
stated  nor  applied  in  this  country  with  so  much  strictness. 

1  Coddington  v.  Davis,  3  Denio  R.,  16;  S.  C.,  1  Comst.  R.,  186. 

*  7  Bing.,  530;  1  Comst.  R.,  413;  6  Barb.,  490;  2Selden  R.,  19;  2  Hill,  688. 
In  Dolev.  Gold,  and  in  Ransom  v.  Mack,  it  was  held  necessary  that  the  notice 
should  shew  that  the  note  had  been  presented  and  refused. 


been  said  that  they  furnished  a  reasonable  implication  of  the  fact;  but  clearly 
that  is  not  sufficient;  the  notice  must  be  a  positive  statement  that  the  bill  has 
been  accepted  and  dishonored.  In  cases  where  the  strict  rule  has  been  thought 
not  applicable,  there  have  been  circumstances  connected  with  the  notice  which 
shewed  that  the  necessary  implication  did  arise."  This  decision  was  made  in 
1839. 

Everard  v.  Watson,  1  Ellis  and  Blackburn  R.,  801,  decided  in  the  Court  of 
Queen's  Bench,  at  the  Easter  Term,  in  1853.  The  notice  in  this  case  was  in 
these  words  :  "  We  beg  to  acquaint  you  with  the  non-payment  of  William 
Miles's  acceptance  to  James  Wright's  draft  of  29th  December  last,  at  4  months, 
60/,  amounting  with  expenses  to  £50  6*  Id,  which  remit  us  in  course  of  post 
without  fail,  or  pay  to  Messrs.  Everards  8c  Co.,  Lynn."  A  verdict  having 
been  found  against  the  defendant  one  of  several  indorsers,  the  cause  WM 
argued  before  the  court  in  bane  on  the  sufficiency  of  the  notice  Lord  Camp- 
bell, C.  J. :  "  The  law  merchant  requires  that,  to  charge  a  drawer  or  indoraer, 
there  must  be  notice  given  to  him  that  the  bill  has  been  presented  and  dis- 
honored, and  that  he  is  looked  to  for  payment.  I  think  such  a  notice  as  that 
now  before  us  satisfies  all  these  requisites.  The  indorscr  is  made  acquainted 
with  the  non-payment,  and  that  6«  Id  expenses  have  been  incurred;  and  he  is 
desired  to  remit  the  money,  or  pay  it  to  a  party  named.  Is  there  any  human 
being  possessed  of  common  understanding,  who  will  not  learn  from  this  the 
facts  that  the  bill  has  been  presented,  that  it  has  been  dishonored,  and  that 
the  party  addressed  is  looked  to  for  payment.  How  could  the  5*  Id  expenses 
be  incurred,  except  by  noting,  upon  the  bill  being  presented  and  dishonored  T 
*  •  •  I  confess  my  regret  at  the  decision  of  Solarte  v.  Palmer  j  it  haa 
caused  much  confusion.  It  is,  however,  a  decision  which  we  cannot  reverse; 
indeed  I  fear  the  House  of  Lords  could  not  do  so."  And  the  whole  court 
assented  to  the  decision. 


598  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

In  one  case  Mr.  Justice  Beardsley  states  it  in  these  words : 
'•'  the  contract  of  the  indorser  is  conditional,  and  only  binds 
him  to  pay  the  note  where  demand  has  been  made  and  pay- 
ment refused,  and  due  notice  thereof  given.  The  fact  of  such 
presentment  and  dishonor  of  the  note  may  appear  in  express 
terms,  or  by  necessary  or  reasonable  implication  from  what 
the  notice  contains;  and  it  must  appear  in  one  form  or  the 
other,  or  the  notice  will  be  defective."  i  In  another  case  Mr. 
Justice  Bronson  states  it  as  follows :  "  No  particular  form  of 
words  is  necessary  in  giving  notice  to  the  drawer  or  indorser; 
it  is  sufficient  if  he  is  informed  that  the  bill  or  note  has  been 
dishonored,  and  that  the  holder  looks  to  him  for  payment. 
Indeed,  it  does  not  seem  necessary  to  inform  the  drawer  or 
indorser  that  he  is  looked  to  for  payment,  for  he  can  under- 
stand nothing  less  than  that,  from  the  fact  that  the  holder 
gives  him  notice  that  the  paper  has  been  dishonored."  2  Chief 
Justice  Shaw  considers  the  notice  sufficient  where  it  conveys 
information  to  the  indorser  of  the  dishonor  of  the  note,  in 
express  terms,  by  necessary  implication  or  reasonable  intend- 
ment,  from  the  language  used.  3  And  in  a  case  where  the 
notice  to  the  indorser  stated  that  the  note  had  been  protested 
for  non-payment,  Mr.  Justice  Story  says :  "  The  last  objection 
to  the  notice  is,  that  it  does  not  state  that  payment  was  de- 
manded at  the  bank  where  the  note  became  due.  It  is  cer- 
tainly not  necessary  that  the  notice  should  contain  such  a 
formal  allegation.  It  is  sufficient  that  it  states  the  fact  of 
non-payment  of  the  note,  and  that  the  holder  looks  to  the 
indorser  for  indemnity.  Whether  the  demand  was  duly  and 
regularly  made,  is  matter  of  evidence  to  be  established  at  the 
trial.  If  it  be  not  legally  made,  no  averment,  however  accurate, 
will  help  the  case;  and  a  statement  of  non-payment  and 
notice  is  by  necessary  implication  an  assertion  of  right  by  the 
holder,  founded  upon  his  having  complied  with  the  requisi- 
tions of  law  against  the  indorser.  In  point  of  fact,  in  com- 

1  Wynn  v.  Alden.  4  Denio,  163. 
8  2  Hill  R.,  593. 
•  3  Metcalf,  499. 


PROCEEDINGS    ON    NON-PAYMENT,    NOTICE.  599 

mercial  cities,  the  general  if  not  universal  practice  is,  not  to 
state  in  the  notice  the  mode  or  place  of  demand,  but  the  mere 
naked  non-payment."  i 

In  a  notice  to  an  indorser  it  is  not  necessary  to  mention  the 
day  when  the  note  was  protested  for  non-payment,  or  the 
place  where  it  was  payable;  for  it  is  given  to  a  person  who  is 
presumed  to  recollect  the  tenor  of  the  note,  and  a  protest  is 
a  declaration  in  writing,  made  by  a  public  officer,  under  his 
oath  of  office,  that  the  bill  or  note  to  which  it  relates,  was  on 
the  day  it  became  due,  duly  presented  for  payment,  and  that 
payment  was  refused;  and  a  notice  of  such  protest,  is  not 
merely  a  notice  that  this  declaration  was  made,  but  that  the 
facts  so  declared  had  really  occurred.  2  The  fact  that  a 
promissory  note  need  not  be  protested  is  no  way  material  to 
determine  whether  or  not  such  a  notice  is  sufficient:  the 
words  themselves  have  a  well  known  signification  among 
business  men,  when  used  in  relation  to  commercial  paper,  and 
import  a  due  demand  and  refusal,  as  clearly  when  used  in 
respect  to  a  note  as  when  used  in  respect  to  a  foreign  bill  of 
exchange.  3 

Some  of  the  authorities  assert  that  the  notice  should  inform, 
or  intimate  to  the  dr.iwer  or  indorser  that  the  holder  looks 
to  him  for  payment;  and  the  common  practice  is  to  insert  a 
clause  to  that  effect  in  the  notice.  4  But  notice  of  the 

1  Mills  r.  Bank  of  U.  S.,  11  Wheat  ,  431.  When  notice  to  the  indorser  IB 
given  by  a  notary,  it  usually  contains  a  description  of  the  note  or  bill,  and 
states  that  it  was  last  evening  or  this  day  protested  for  non-payment,  and  that 
the  holder  looks  to  him  for  payment  thereof.  But  if  the  notice  shew  that  the 
note  was  protested  on  the  wrong  day,  it  is  a  fatal  objection  to  it.  2  Hill,  587. 
Wynn  v.  Alden,  4  Denio,  163,  holds  that  the  notice  must  shew  when  the  note- 
was  dishonored;  and  must  be  considered  aa  brought  in  question  by  the  deci- 
sion in  Youngs  v.  Lee,  supra. 

'Cook  v.  LitchOeld,  5  Sand  R..  830;  tee  the  form  of  notice  in  this  case, 
supra:  S.  C.,  5  Selden  R.,  279;  Youngs  v.  Lee,  18  Barb.  R.,  188;  S.  C.,  2  Ker- 
nan  R  ,  552.  The  notice  held  good  in  this  case  was  in  these  words:  "  Pleas* 
to  take  notice  that  a  promissory  note  drawn  by  Bell  and  Goodman  for  $1 ,000, 
indorsed  by  you,  is  protested  for  non-payment." 

•  Seals  v.  Peck,  12  Barb.  R.,  246. 

*  Story  on  Promissory  notes,  §348.    It  is  indispensable  that  it  should  either 
expressly,  or  by  just  and  natural  implication,  contain  in  substance,  the  follow- 


600  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES 

dishonor  of  a  bill  or  note  by  non-payment  "  implies  that  the 
holder  means  to  insist  on  the  liability  of  the  person  notified 
and  does  not  intend  to  give  credit  to  the  acceptor  or  maker; 
and  is  universally  understood  to  be  equivalent  to  a  demand  of 
payment.  If  this  is  not  the  language  of  the  transaction,  why 
is  the  notice  given  ?  "  i  Where  the  indorser  is  clearly  and 
distinctly  notified  that  the  bill  or  note  has  been  dishonored,  the 
act  of  giving  him  the  notice  advertises  him  that  the  holder 
looks  to  him  for  payment.  2  He  can  understand  the  notice  in 
no  other  way;  for  it  necessarily  implies  that  the  party  giving 
it  intends  to  insist  upon  his  right  of  recourse.  3 

The  notice  need  not  state  who  is  the  owner  of  the  note  or 
bill,  or  at  whose  request  it  is  given.  4  It  is  immaterial  to  the 
indorser  who  is  the  holder  since  he  is  equally  bound  by  the 
notice  to  pay  the  bill,  in  whosoever  hands  it  may  be;  and  it 
is  time  enough  for  him  to  ascertain  the  true  title  of  the  holder 
when  he  is  called  upon  for  payment.  5  The  important  thing 
for  him  is  to  know  in  due  time  that  the  paper  has  been  dis- 
honored, to  the  end  that  he  may  take  prompt  measures  for  his 
own  security.  6 

1  Cowles  v.  Harts,  Johnson  &  Co.,  3  Conn.  R.,  516. 

a  King  v.  Bickley.  2  Q.  B.  Rep.,  419;  S.  C.,  11  Law  Journal  Rep.  N.  S.  Q. 
B.,  224;  Count  v.  Thompson,  L.  J.,  (of  1849:)  18,  New  Series,  125. 

8  2 Hill  R.,  593;  Bank  of  U.  S.  v.  Carneal,  2  Peters,  543;  Miers  v.  Brown, 
11  Mees.  and  Wels.,  372;  Warren  v.  Gilman,  17  Maine,  360. 

4  Bradley  v.  Davis.  26  Maine  R.3  45 ;  Shed  v.  Brett,  1  Pick.,  401.  The  notice 
does  not  usually  state  the  name  of  the  holder.  5  Sand.  R.,  330;  18  Barb.  R., 
188. 

6 11  Wheat.,  431. 

•  Crocker  v.  Getchell,  23  Maine  R.,  392.  Where  the  holder  only  notifies  his 
immediate  indorser,  the  latter  must  take  care  to  notify  the  prior  parties  to 
whom  he  intends  to  look  for  payment.  Harrison  v.  Ruscoe,  15  M.  and  W.. 
231. 


ing  requisites:  1.  A  true  description  of  the  note,  so  as  to  ascertain  its  identity: 
2.  An  assertion  that  it  has  been  duly  presented  to  the  maker  at  its  maturity, 
and  dishonored:  3.  That  the  holder,  or  other  person  giving  the  notice,  looks 
to  the  person  to  ifhom  the  notice  is  given  for  reimbursement  and  indemnity. 
But  see  §  353,  essentially  qualifying  this  latter  clause.  Story  on  Bills,  §  390j 
Chitty  on  Bills,  §  466. 


PROCEEDINGS   ON   NON-PAYMENT,  NOTICE.  601 

It  is  not  necessary  that  a  copy  of  the  protest  should  accom- 
pany notice  of  the  dishonor  of  a  foreign  bill :  i  it  is  sufficient 
to  inform  the  drawer  or  indorser  that  the  bill  has  been  protes- 
ted for  non-payment.  2  But  the  protest  must  be  produced  on 
the  trial,  3  for,  as  we  have  seen,  that  is  the  indispensible  evi- 
dence that  the  bill  has  been  dishonored.  And  after  a  Mil 
has  been  in  fact  dishonored,  a  notice  to  that  effect  given  by  a 
party  to  the  bill,  in  terms  unequivocally  asserting  the  dis- 
honor, is  valid;  although  the  party  giving  the  notice  had  no 
certain  knowledge  of  the  fact  of  dishonor.  4 

Jls  to  the  service  of  notice.  The  rule  formerly  was,  that 
notice  of  the  dishonor  of  a  bill  or  note  must  be  served  per- 
sonally on  the  drawer  or  indorser,  or  be  left  at  his  dwelling 
house  or  place  of  business;  and  that  rule  still  prevails  in  this 
country  when  the  party  to  be  charged  resides  in  the  same 
place  where  the  presentment  or  demand  is  to  be  made.  5  It  has 
been  changed  in  this  state  by  a  statute  passed  at  the  last 
session  of  the  legislature,  allowing  the  notice  to  be  served  by 
depositing  the  same  in  the  post  office.  And  where  the  drawer 
or  indorser  resides  in  a  different  place  from  that  in  which  the 
presentment  or  demand  is  made,  the  old  rule,  which  required 
personal  service,  has  been  relaxed,  and  it  is  now  well  settled 
that  notice  may  be  sent  by  mail.  6 

Under  the  law  merchant,  if  a  note  becomes  due  in  a  village 
where  the  indorser  resides,  the  notice  should  be  served  per- 

1  Goodman  v.  Harvey,  4  Adol.  and  Ellis,  870;  6  N.  and  M.,  872. 

'Idem;  Wells  v.  Whitehead,  15  Wend.,  627;  10  Mass.  R.,  1;  Wallace  r. 
Agry,  4  Mason  R.,  336;  Atwater  v.  Streets,  1  Doug.  Mich.,  466;  Spies  T. 
Newbery,  2  Doug.  Mich.,  426. 

1  Lenox  v.  Leverett,  10  Mass.  R.,  1;  16  Wend  ,  627. 

4  Jennings  v.  Roberts,  4  Ellis  and  Blackburn's  R.,  616,  decided  in  1866,  G.  B. 

6  Ireland  v.  Kip,  10  John.  R.,  490;  11  id.  281;  Smedes  v.  Utica  Bank,  20 
id.  372;  Louisiana  State  Bank  v.  Rowell.  6  Martin's  Lou.  Rep.  N.  S.,606; 
Laporte  v.  Landry,  6  id.  859;  Clay  v.  Oakley,  id.  187;  Shepard  v.  Hall,  1 
Conn.  R.,  829;  Hartford  Bank  v.  Stedman,  8  id.  489;  Bank  of  Columbia  T. 
Lawrence,  1  Peters,  578;  2  Hill  R.,  590;  Miller  v.  Hacklcy,  6  John.  R.,  684; 
Munn  v.  Baldwin,  6  Mass.  R.,  316;  see  the  statute  of  this  State,  passed  in 
April,  1857. 

•  Ransom  v.  Mack,  2  Hill  R.,  587. 

36 


602  BILLS  OF    EXCHANGE  AND    PROMISSORY  NOTES. 

sonally  or  by  leaving  it  at  the  indorser's  dwelling  house  or 
place  of  business;  for  the  post  office  is  not  a  place  of  deposit 
for  notices  to  indorsers,  except  where  the  notice  is  to  be  trans- 
mitted by  mail  to  another  office,  i  Accordingly,  it  has  been 
held  in  this  state  that  notice  cannot  be  left  in  the  post  office 
of  the  city  where  the  note  falls  due,  for  an  indorser  who 
resides  within  the  corporate  limits  of  the  city,  but  some  three 
and  a  half  miles  distant  from  the  post  office,  there  being  no 
communication  by  mail  between  the  city  proper  and  the 
indorser's  residence.  2  But  the  rule  there  laid  down  has  not 
been  applied  to  our  large  country  towns,  where  the  indorser's 
residence  is  nearer  to  another  post  office  than  it  is  to  that 
where  the  holder  lives,  or  where  the  demand  is  made.  3 

1  Sheldon  v.  Benham,  4  Hill  R.,  129;  Cayuga  Co.  Bank  v.  Bennett.  6  Hill 
R.,  236. 

8  The  indorser  resided  at  Kip's  Bay,  within  the  corporate  limits  of  New- 
York,  where  the  demand  was  made,  but  at  a  distance  of  three  and  a-half  miles 
from  the  New -York  post  office,  where  he  received  his  letters,  and  the  penny- 
post  or  letter-carrier  did  not  deliver  letters  at  that  distance;  and  it  was  held 
that  notice  left  for  the  indorser  at  the  post  office  was  not  sufficient.  Ireland 
v.  Kip.  10  John.  R.,  490. 

'  Laporte  v.  Landry,  5  Louis.  Rep.  N.  S.,  359;  Louisiana  State  Bank  v. 
Rowell,  6  id.  506.  The  rule  laid  down  in  this  case  was  that  mail  service  is 
good  "  when  the  indorsers  live  at  such  a  distance  that  their  residence  is  nearer 
another  post  office  than  that  where  the  holder  lives." 

Brindley  v.  Barr,  3  Harrington  (Del.)  R,  419.  The  parties  all  resided  in 
the  city  of  Wilmington,  and  it  was  held  that  the  indorser  ought  to  have  been 
personally  noticed  of  the  dishonor  of  the  note,  or  by  a  notice  left  at  his  house 
or  place  of  business;  and  that  a  notice  left  in  the  post  office  for  him  was  not 
enough;  Patrick  v.  Beazley,  6  How,  Miss.,  609.  The  indorser  lived  a  mile  and 
a  half  from  town,  from  the  city  of  Jackson,  and  received  his  letters  and  papers 
at  the  post  office  in  that  place:  and  it  was  held  that  a  notice  deposited  in  that 
office  and  addressed  to  him.  was  not  sufficient  to  charge  him. 

In  Clay  v.  Oakley,  5  Martin  N.  S.,  139,  the  notice  was  left  in  the  post  office 
at  Alexandria,  directed  to  the  indorser  at  that  place;  and  the  court  held  it  to 
be  insufficient. 

In  the  Bank  v.  Rowell,  6  id.  508,  the  indorser  lived  three  miles  from  the  town 
of  Baton  Rouge,  at  which  post  office  the  notice  was  deposited,  and  it  was  deter- 
mined not  to  be  sufficient,  although  it  was  proved  the  indorser  was  in  the  habit 
of  sending  the  servant  regularly  for  letters,  and  that  they  seldom  remained 
in  the  office  longer  than  forty-eight  hours. 

Timms  v.  Delisle,  adms.,  7  Blackf,  447,  holds  a  contrary  doctrine.  The 
note  was  payable  at  the  branch  of  the  State  Bank  at  Vincennes,  and  the  intes- 
tate who  was  an  indorser  on  it,  lived  about  three  miles  from  town,  but  came 


PROCEEDINGS   ON    NON-PAYMENT,  NOTICE.  603 

The  corporate  limits  of  the  city  or  town  have  less  to  do  with 
the  question  than  the  mail  arrangements  of  the  general  gov- 
ernment, and  the  business  relations  of  our  citizens.  Whether 
mail  service  is  good  or  not,  does  not  depend  upon  the  inquiry 
whether  the  person  to  be  charged  resides  within  the  same  legal 
district;  but  upon  the  question  whether  the  notice  may  be 
transmitted  by  mail  from  the  place  of  presentment  or  demand 
to  another  post  office  where  the  drawer  or  indorser  usually 
receives  his  letters  and  papers,  i  The  design  of  the  notice  is 
to  bring  the  information  it  contains  home  to  the  indorser;  and 
for  this  reason,  when  the  notice  is  sent  by  mail  it  is  to  be 
directed  to  the  post  office  nearest  the  party  to  whom  it  is 
addressed;  2  unless  he  is  in  the  habit  of  receiving  his  letteli  at 
another  post  office,  in  which  case  it  may  be  transmitted  to 
him  at  the  latter  place,  without  any  regard  to  the  limits  of 
the  city  or  town.  3  And  where  he  resides  in  one  town  and 
does  business  in  a  neighboring  village  or  city,  and  receives 
letters  at  the  post  office  nearest  to  his  residence  and  also  at 

1  Per  Bronson,  J.,  in  Ransom  v.  Mack,  supra. 

Ml  John.  R..  232. 

1  Reid  v.  Payne,  16  John.  R.,  218;  Hunt  v.  Fish,  4  Barb.  R.,  824.  If  the 
indorser  remove  to  another  town,  but  still  continue  to  receive  his  letters  at  the 
post  office  where  he  formerly  resided,  the  notice  may  be  sent  to  him  at  that 
place. 


to  the  post  office  in  that  place  for  his  letters,  and  the  notice  addressed  to  the 
defendant  as  administrator  and  deposited  there  for  him,  was  held  sufficient. 

Remington  v.  Harrington,  8  Ham.  (Ohio)  R.,607.  The  defendant  lived  near 
the  post  office  in  Cleveland  j  he  rented  a  box;  his  letters  and  papers  wen-  put 
into  it.  This  notice,  directed  to  the  defendant,  was  deposited  fn  his  box  be- 
tween four  and  six  o'clock  in  the  afternoon  of  the  last  day  of  grace  on  the  note, 
and  after  its  protest.  The  defendant  called  at  the  office  once  a  day  or  more 
frequently  for  his  letters,  and  if  sent  by  Sartwell,  they  were  delivered  to  hta 
barkeepers  or  himself.  On  these  facts  the  case  was  left  to  the  jury,  and  a  ver- 
dict for  the  plaintiff  having  been  rendered,  the  court  refused  to  set  it  aside. 

Jones  v.  Lewis,  8  Watts  and  Serg  ,  14 :  In  this  case  the  note  was  protested 
in  Pittsburgh,  and  notice  to  the  defendant,  an  indorser,  was  given  by  deposit- 
ing it  in  the  post  office  in  that  city  addressed  to  him ;  the  defendant  living  be- 
yond the  Monongahela  river,  contiguous  to  but  out  of  the  city  limits,  and  hav- 
ing a  box  at  the  post  office  and  receiving  his  letters  there;  and  it  wa«  held  good 
service. 


604  BILLS    OF    EXCHANGE  AND  PROMISSORY    NOTES. 

his  place  of  business,  a  notice  of  protest  may  be  sent  to  him 
at  the  latter  place,  i 

The  statute  of  this  state,  passed  in  April,  1857,  allows 
notice  of  non-payment  or  non-acceptance  to  be  served  on  the 
drawer  or  indorser  of  negotiable  paper  whenever  his  residence 
or  place  of  business  as  ascertained  on  inquiry  or  designated 
on  the  paper,  is  in  the  city  or  town  where  the  note,  draft  or 
check  is  presented  for  payment  or  acceptance,  by  depositing 
the  same  in  the  post  office  addressed  to  him  there,  with  the 
postage  thereon  prepaid. 

Another  statute  of  this  state  provides  that,  "  in  all  cases 
where  a  notice  of  non-acceptance  of  a  bill  of  exchange  or 

1  Montgomery  Co  Bank  v.  Marsh,  3  Selden  R.,  481.  There  does  not  seem 
to  be  any  reason  why  in  this  case  the  notice  may  not  be  addressed  to  the 
indorser  at  either  place,  unless  he  has  indicated  the  post  office  to  which  it  is  to 
be  sent  on  the  paper.  Downer  v.  Remer,  21  Wend.,  10.  See  statutes  of 
1835,  page  152. 

Bank  of  the  U.  S.  v.  Carneal,  2  Peters  R.,  543.  The  action  was  on  a  pro- 
missory note  dated  at  Cincinnati,  August  22,  1820,  payable  to  the  defendant 
or  order  at  the  office  of  discount  and  deposit  of  the  Bank  of  the  United  States 
at  Cincinnati,  and  the  bank  was  the  holder  of  the  note  when  it  became  due. 
The  other  facts  are  stated  in  the  opinion  of  the  court  as  follows  :  "  The  defen- 
dant Carneal,  resides  in  Campbell  county,  in  the  State  of  Kentucky.  The 
note  became  due  on  the  24th  of  October,  1820,  and  on  the  next  day  the  notary 
put  a  sealed  notice  of  the  protest  and  non-payment  into  the  post  office  in  Cin- 
cinnati, directed  '•'  to  Thomas  D.  Carneal,  Campbell  county,  Kentucky,"  the 
postage  on  which  was  not  paid.  At  that  time  Carneal's  residence  in  Campbell 
county,  was  without  the  limits  of  any  post  town,  and  about  two  miles  from 
Cincinnati,  across  the  river  Ohio;  and  his  residence  was  well  known  to  the 
officers  of  the  bank,  as  well  as  the  post  master  at  Cincinnati.  The  county 
seat  of  Campbell  county  is  Newport,  where  there  is  a  post  office,  about  three 
miles  distant  from  Carneal's  residence,  the  river  Licking  being  between  them ; 
and  there  is  also  another  post  office  at  Covington,  below  the  river  Licking, 
about  two  miles  distant  from  his  residence.  In  October,  1820,  the  mails  from 
Cincinnati  passed  once  a  week  only  through  Covington,  and  three  times  a 
week  through  Newport.  Carneal  was  in  the  habit  of  receiving  letters  at  the 
Newport  office,  as  well  as  at  the  offices  in  Covington  and  Cincinnati.  He  was 
in  the  habit  of  receiving  all  the  letters  directed  to  him  at  Cincinnati,  at  the 
office  in  that  place,  and  had  given  orders  to  the  post  masters  to  detain  all  such 
letters  there  until  he  called  for  them.  He  visited  Cincinnati  very  frequently 
and  almost  daily,  having  business  and  being  a  director  of  a  bank  located  at 
that  place.  The  post  master  was  in  the  habit  of  sending  letters  directed  to 
him,  in  Campbell  county,  by  the  Covington  mail,  whenever  he  observed  the 
address,  unless,  as  was  sometimes  the  case,  he  called  for  the  letters  at  the 
office  before  the  Covington  mail  was  sent.  But  other  letters  directed  gene- 


PROCEEDINGS   ON    NON-PAYMENT^  NOTICE.  605 

non-payment  of  a  bill  of  exchange,  promissory  note  or  other 
negotiable  instrument,  may  be  given  by  sending  the  same  by 
mail,  it  shall  be  sufficient  if  such  notice  be  directed  to  the 
city  or  town  where  the  person  sought  to  be  charged  by  such 
notice  resided  at  the  time  of  drawing,  making  or  ind.»r>in- 
such  bill  of  exchange,  promissory  note,  or  other  negotiable 
instrument,  unless  such  person  at  the  time  of  affixing  his  sig- 
nature to  such  bill,  note  or  other  negotiable  instrument,  shall 
in  addition  thereto,  specify  thereon  the  post  office  to  which  he 
may  require  the  notice  to  be  addressed."  i 

Under  this  provision  the  only  inquiry  incumbent  upon  the 

1  2  R.  S.,  65,  3d  ed.    There  are  similar  statutes  in  several  of  the  other  states. 


rally  to  Campbell  county,  when  the  place  of  residence  of  the  party  was 
tinknown.  were  sent  by  the  post  master  to  Newport.  The  notary  himself, 
when  he  put  the  present  notice  into  the  post  office  at  Cincinnati,  supposed 
that  Carneal  received  all  his  letters  at  that  office  The  first  mail  which  left 
Cincinnati  for  Newport,  after  the  deposit  of  this  notice,  was  on  the  2Gth  of 
October;  and  the  first  which  left  for  Covington,  was  on  the  28th  of  the  same 
month.  There  is  no  evidence  in  the  case  that  the  letter  in  question  went  either 
by  the  mail  of  the  26th  to  Newport,  or  by  that  of  the  28th  to  Covington.  The 
defendant  Carneal  has  not  produced  the  letter,  if  it  were  ever  received  by  him ; 
and  the  circumstances  afford  a  strong  presumption  that  it  might  have  been 
received  at  Cincinnati." 

Upon  these  facts  the  court  were  of  opinion  that  the  instruction  to  the  jury 
as  in  case  of  a  non-suit,  was  improperly  given,  and  made  the  following  among 
other  remarks  :  *'  It  is  difficult  to  lay  down  any  universal  rule,  as  to  what  is 
due  diligence  in  respect  to  notice  to  indorsers.  Many  cases  must  be  decided 
upon  their  own  particular  circumstances,  however  desirable  it  may  be  when 
practicable,  to  lay  down  a  general  rule.  When  notice  is  sent  by  mail,  it  ia 
sufficient  to  direct  it  to  the  town  where  the  party  resides,  if  it  is  a  post  town. 
If  it  is  not,  then  to  the  post  office  or  post  town  nearest  to  bis  residence,  if 
known.  But  the  rule,  as  to  the  nearest  post  office,  is  not  of  universal  appli- 
cation, for  if  the  party  is  in  the  habit  of  receiving  his  letters  at  a  more  distant 
post  office,  or  through  a  more  circuitous  route,  and  that  fact  is  known  to  the 
person  sending  notice,  notice  sent  by  the  latter  mode  will  be  good.  And 
where  the  party  is  in  the  habit  of  receiving  his  letters  at  various  post  offices,  to 
suit  his  own  convenience  or  business,  it  may  be  sufficient  to  send  it  to  cither. 
The  object  of  the  law  in  all  these  cases  is  to  enforce  the  transmission  of  the 
notice  by  such  a  route  as  that  it  may  reach  the  party  in  a  reasonable  time. 
This  doctrine  is  fully  recognized  by  this  court  in  the  case  of  the  Bank  of  Colum- 
bia v.  Lawrence,  decided  at  the  last  term."  1  Peters,  578. 

The  same  doctrine  is  held  in  this  state,  independent  of  the  statute  of  1885. 
8  Comst.  R.,  442;  3  Kernan  R.,  649,  with  similar  qualifications.  Catskill 
Bank  v.  Stall,  15  Wend.,  364. 


606  BILLS   OF  EXCHANGE  AND    PROMISSORY   NOTES. 

holder  to  make,  is  as  to  the  residence  of  the  drawer  or  indorser, 
and  when  that  is  ascertained  the  notice  of  protest  should  be  di- 
rected accordingly.  Any  rule  imposing  upon  the  holder  a  diffe- 
rent obligation  would  be  burdensome  and  materially  affect  the 
circulation  of  commercial  paper.  The  party  is  deemed  to  re- 
ceive his  letters  through  a  post  office  in  the  town  in  which  he 
resides,  and  if  he  desires  to  receive  them  elsewhere,  he  should 
indicate  it  by  affixing  the  desired  direction  to  his  signature,  i 
Where  the  party  entitled  to  notice  resides  in  one  place ? 
transacts  business  in  another,  and  receives  letters  in  each,  and 
notice  is  to  be  given  by  mail  from  a  third  place,  it  may  be 
directed  either  to  his  place  of  residence  or  business.  2  The 
law  is  indifferent  between  the  two  places;  but  it  is  not  indif- 
ferent as  to  the  mode  of  service.  If  the  indorser  has  a  known 
residence  at  the  place  where  the  note  falls  due,  and  does  busi- 
ness in  a  neighboring  city  where  he  spends  most  of  his  time, 
it  is  held  that  the  holder  is  not  at  liberty  to  elect  between 
personal  and  mail  service,  between  leaving  the  notice  at  his 
residence  and  sending  it  by  mail  away  from  his  residence  to 
his  place  of  business.  3  In  those  cases  where  the  law  permits 
service  by  mail,  the  indorser  takes  the  risk  of  miscarriage  and 
of  all  accidents  which  may  prevent  the  due  transmission  and 
delivery  of  the  notice;  4  and  for  this  reason  the  law  as 

1  Seneca  Co.  Bank  v.  Neass,  3  Comst.  R.,  442.     The  defendant  was  sued  as 
the  indorser  of  a  promissory  note,  payable  at  the  plaintiff's  bank,  which  was 
at  Waterloo,  Seneca  county.     The  defendant  lived  in  the  town  of  Fayette, 
adjoining  "Waterloo,  but  usually  received  his  letters  at  the  latter  place;  and 
the  notice  was  sent  addressed  to  him  in  the  town  where  he  resided,  there  being 
no  place  named  on  the  note.    The  result  of  the  decision  is  stated  in  the  text, 
in  the  language  of  Mr.  Justice  Pratt. 

2  Bank  of  Geneva  v.  Howlett,  4  "Wend.,  328;  Montgomery  Co.   Bank  v. 
Marsh,  supra. 

3  Van  Vechten  v.  Pruyn,  3  Kernan  R.,  549.    The  indorser  resided  at  Cats- 
kill,  doing  business  as  a  lawyer  in  the  city  of  New-York,  usually  arriving  there 
on  Monday  evening  and  leaving  there  on  Friday  evening;  and  his  dwelling  house 
in  Catskill  was  very  near  the  bank  where  the  note  fell  due  and  was  protested. 
The  excellent  opinions  delivered  in  the  case  by  Justices  Johnson  and  Comstock, 
proceed  upon  the  ground  that  the  holder  is  bound  to  adopt  that  mode  of  ser- 
vice which  is  most  certain  to  bring  the  notice  home  to  the  indorser. 

4  Dickens  v.  Beal,  10  Peters'  R.,  572,  and  authorities  there  cited.    6  John. 
R.,  375;  Shad  v.  Brett,  1  Pick,  401;  Jones  v.  Lewis,  8J  "Watts  and  Serg.,  14. 


PROCEEDINGS   OK    NON-PAYMENT,  NOTICE.  607 

recently  pronounced,  does  not  allow  the  holder  to  serve  by 
mail  in  any  case  where  he  has  an  opportunity  to  make  a 
service  that  is  more  certain  and  safe.  But  this  reasoning  of 
the  Court  of  Appeals  will  not  apply  since  the  enactment  of 
the  statute  passed  at  the  last  session  of  the  legislature. 

Where  the  residence  of  the  drawer  or  indorser  is  known, 
and  the  notice  may  be  transmitted  by  mail,  the  service  is 
completed  by  enclosing  the  notice  in  a  letter  or  envelope  and 
depositing  the  same  in  the  post-office  properly  addressed  and 
pre-paid.  i  The  conveyance  being  of  a  public  character,  is 
practically  as  safe  and  expeditious  as  the  exigency  of  business 
requires;  and  it  would  be  unreasonable  to  oblige  the  holder 
to  transmit  the  notice  by  a  special  messenger,  or  to  incur  the 
risk  of  sending  it  by  a  private  hand  where  there  is  a  regular 
mail,  or  to  prove  that  it  was  actually  carried  by  the  mail  in 
due  time  and  delivered  to  the  person  to  whom  it  was  addressed. 
Hence  the  law  pronounces  it  sufficient  to  enclose  the  notice, 
and  put  it  into  the  post-office  directed  to  the  right  person  and 
place.  2  But  the  holder  is  at  liberty  to  send  the  notice  by  a 
private  conveyance  if  he  chooses  to  do  so;  3  and  there  are  cases 
in  which  he  may  be  under  the  necessity  of  adopting  that 
course.  And  it  has  been  held  that  where  it  is  necessary  to 
send  the  notice  by  a  special  messenger  to  insure  its  delivery 
within  a  reasonable  time,  the  holder  may  recover  the  expenses 
incurred  by  that  mode  of  giving  notice.  4 

1  Idem;  Bank  of  Columbia  v.  Lawrence,  1  Peters,  678;  8  Kernan  R.,  666. 

*  Kufh  v.  Weston,  8  Esp.  R.,  64;  Saunderson  T.  Judge,  2  Hen.  Bla.,  609; 
Darlishier  v.  Parker,  6  East,  8,  9;  2  Smith,  196. 

*  Bancroft  v.  Hall,  Holt  C.  N.  P.,  476.    Per  Mr.  Justice  Bayley  :  "  Notice 
must  be  given  in  time,  but  all  a  man's  other  business  is  not  to  be  suspended 
for  the  sake  of  giving  the  most  expeditious  notice.    He  is  not  bound  to  write 
by  post  as  the  only  conveyance,  or  to  send  a  letter  by  the  very  first  channel 
which  offers.    He  may  write  to  a  friend,  and  send  by  a  private  conveyance." 
It  is  enough  if  the  notice  arrive  by  as  early  a  day,  though  at  a  later  hour,  than 
it  would  have  arrived  by  mail.  Jarvis  v.  St.  Croix  Manuf.  Co.,  28  Maine  R.,  287. 

4  Pearson  v.  Cranlan,  2  Smith's  Rep.,  404.  The  judge  left  it  to  the  jury  to 
say  whether  the  sending  by  a  special  messenger  was  done  wantonly  or  not ; 
and  it  appeared  that  the  letter  possibly  would  not  have  reached  the  defendant 
for  a  fortnight,  as  he  lived  out  of  the  usual  course  of  the  post.  On  a  verdict 
for  the  amount  of  the  bill  and  expenses,  Lord  Ellenborough  observed  •'  that 
it  was  rightly  left  to  the  jury,  if  it  was  left  to  them  to  say,  whether  the  special 
messenger  was  necessary,  and  also  whether  the  charge  was  necessary." 


608  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

In  the  case  of  a  foreign  bill,  it  is  sufficient  to  send  the 
notice  by  the  first  regular  ship  bound  for  the  place  to  which 
it  is  to  be  sent.  1  If  there  is  an  established  conveyance  by  a 
line  of  packets  or  steamships  running  directly  to  the  place, 
the  notice  must  go  by  the  earliest  vessel  leaving,  if  the  holder 
have  time  after  the  dishonor,  to  write  and  forward  the  notice. 
If  there  be  a  communication  by  mail,  the  notice  should  be 
forwarded  by  it  or  in  such  a  manner  as  to  arrive  at  as  early  a 
day,  as  if  it  had  been  so  sent.  2  And  if  there  be  no  mail  and 
no  direct  and  regular  communication,  the  notice  should  be 
sent  by  the  safest  and  most  expeditious  conveyance.  3 

Where  the  service  of  notice  is  made  by  mail,  it  is  incum- 
bent upon  the  holder  to  take  care  that  the  letter  be  accurately 
directed;  and  if  any  delay  occurs  through  his  neglect  in  this 
particular,  it  will  discharge  the  party  entitled  to  notice.  If 
the  holder  know  that  the  indorser  is  dead  and  that  his  will 
has  been  proved,  and  have  the  opportunity  to  ascertain  who 
are  his  executors,  it  will  not  be  sufficient  to  send  a  notice 
addressed  to  the  deceased  at  his  late  residence.  5  But  the 
notice  will  be  good  if  addressed  to  the  indorser  at  his  resi- 
dence, if  his  death  be  not  known  to  the  holder;  6  or  if  it 
be  not  known  and  not  easily  ascertained  whether  he  left  a 
will  or  whether  any  administrators  have  yet  been  appointed.  7 

Where  there  is  nothing  on  the  face  of  a  bill  or  note  indicat- 
ing particularly  the  residence  or  address  of  the  drawer  or 
indorser,  it  is  enough  to  send  the  notice  addressed  to  him 
generally  at  his  place  of  residence  or  business :  8  if  he  desig- 

I  Muilman  v.  D'Eguino,  2  Hen.  Bla.,  665. 

II  23  Maine  R.,  287;  Kufh  v.  "Western,  supra:  6  Mass.  R.,  316;  9  id.  139 •  6 
Wheat.,  102. 

*  Darbishire  v.  Parker,  supra;  Story  on  Bills,  §  286,  287. 

4  Esdaile  v.  Sowerby,  11  East,  117;  Schofield  v.  Bayard,  3  Wend.,  488. 

*  Cayuga  Co.  Bank  v.  Bennett,  5  Hill  R.,  236. 
8  Merchants  Bank  v.  Birch,  17  John.  R.,  25. 

7  Stewart  v.  Eden,  2Caines  Rep.,  121. 

8  Mann  v.  Moors,  Ryan  and  Mood.,  249.     In  this  action,  which  was  brought 
against  the  defendant  as  the  drawer  of  the  bill,  the  letter  containing  the  notice 
was  put  into  the  post  office  at  London,  addressed  to  the  defendant  "Man- 


PROCEEDINGS   ON    NON-PAYMENT,  NOTICE.  609 

nate  the  place  where  the  notice  is  to  be  sent  by  writing  it 
under  his  name,  the  notice  should  be  sent  to  the  place  sped 
fied.  i  In  other  cases  the  general  rule  undoubtedly  is,  that 
the  holder  must  use  the  same  degree  of  diligence  and  care  in 
directing  a  letter  enclosing  a  notice  as  a  prudent  man  would 
use  in  ascertaining  and  writing  the  address  upon  other  letters 
of  business  of  similar  importance.  -' 

When  the  holder  does  not  know  and  cannot,  on  diligent 
enquiry,  ascertain  the  drawer  or  indorser's  residence  or  place 
of  business,  reasonable  and  due  diligence  is  tantamount  to 
actual  notice.  3  Thus,  where  a  bill  dated  in  New- York,  was 
drawn  on  a  firm  residing  there,  by  the  defendants,  residing  in 
Petersbiirgh,  Virginia,  and  on  payment  being  refused,  the 
clerk  of  the  notary  made  diligent  inquiry  after  the  defendants, 
at  the  banks  in  New- York  and  elsewhere,  and  the  information 
was  that  they  resided  in  Norfolk,  and  he  sent  the  n«»tire 
addressed  to  them  at  that  place;  it  was  held  that  due  diligence 
had  been  used  and  the  notice  was  sufficient.  4  So  where  a 
bank,  on  discounting  a  note  or  bill,  inquires  of  the  person 
presenting  it  as  to  the  residence  of  the  indorser,  and  sends 
the  notice  to  the  place  named  by  him,  this  is  due  diligence 
and  sufficient  to  charge  the  indorser,  though  he  never  resided 
there,  or  has  removed  to  another  place.  5  So  where  the  notary, 
being  ignorant  as  to  the  residence  of  the  first  indorser,  applies 

1  Morris  T.  Husson,  4  Sand.  R.,  93;  see  also  the  statute  cited  above;  10 
Peters  R.,  580. 

1  Clarke  v.  Sharpe.  3  M.  and  W.,  166;  4  WTieat.,  438;  12  East,  433. 

»  Dickens  v.  Seal,  10  Peters  R.,  572. 

4  Chapman  T.  Lipscomb,  1  John.  R.,  294. 

'  Bank  of  Utica  T.  Davidson,  5  Wend.,  587;  Bank  of  Utica  v.  Bender,  21 
Wend.,  643.  If  the  agent  of  the  indorsers  give  the  information  as  to  their 
place  of  residence,  they  are  of  course  bound  by  the  act.  CaUkill  Bank  r. 
Small,  15  Wend.,  364;  18  id.  466. 


Chester."  Abbott,  Ld.  Ch.  J. :  '*  I  am  of  opinion  that  this  was  snfficfeaft 
notice  of  the  dishonor  of  the  bill.  If  the  drawer  of  a  bill  of  exchange  dates 
his  bill  '  London,'  I  think  a  notice  of  dishonor  by  letter  addressed  to  him, 
London,  will  be  sufficient."  In  Walter  v.  Haynes.  id.  149,  the  action  being 
against  an  indorser,  the  same  Judge  required  further  proof. 


610  BILLS    OF   EXCHANGE  AND  PROMISSORY  NOTES. 

for  information  to  the  second  indorser,  and  being  told  that  he 
resides  in  a  particular  town,  sends  the  notice  there;  it  is  held 
that  the  notary  is  warranted  in  acting  upon  the  information  so 
obtained,  and  that  this  is  reasonable  diligence,  i 

It  is  not  essential  that  the  notice  should  be  brought  home  to 
the  indorser,  nor  that  it  should  be  directed  to  the  place  of  his 
residence.  It  is  enough  that  the  holder  of  a  bill  makes  dili- 
gent enquiry  for  the  indorser  and  acts  upon  the  best  informa- 
tion he  is  able  to  procure.  If  after  doing  so,  the  notice  fail  to 
reach  the  indorser,  the  misfortune  falls  on  him,  not  on  the 
holder.  There  must  be  ordinary  or  reasonable  diligence — such 
as  men  of  business  usually  exercise  when  their  interest  de- 
pends upon  obtaining  correct  information.  The  holder  must 
act  in  good  faith,  and  not  give  credit  to  doubtful  intelligence 
when  better  could  have  been  obtained.  2 

1  Ransom  v.  Mack,  2  Hill  R.,  587;  Carroll  v.  Upton,  2  Sand.  R.,  171;  S.C., 
3  Comst.,  272.  Whether  there  has  been  due  diligence,  is  to  be  determined 
from  all  the  circumstances  of  the  case. 

a  21  Wend.  R.,  645.  Where  the  holder  or  the  notary  applies  to  a  man  wor- 
thy of  belief  for  information,  and  is  answered  distinctly  that  the  indorser  resides 
at  a  given  place,  he  is  not  bound  to  push  the  inquiry  further;  for  ordinary  dili- 
gence can  require  no  more  than  that  the  inquiry  shall  be  pursued  until  it  is 
satisfactorily  answered.  Per  Mr.  Justice  Bronson  in  Bank  of  Utica  v.  Bender. 

Chouteau  v.  Webster,  6  Metcalf  R.  1.  The  general  rule  is  that  the  notice 
must  be  so  given,  and  at  such  place,  that  it  will  be  most  likely  to  reach  the 
indorser  promptly.  The  defendant  in  this  case,  who  was  sued  as  indorser  of  a 
note  payable  in  New-York,  resided  permanently  in  Boston,  but  his  actual  re- 
sidence at  the  time  the  note  was  dishonored,  October,  1837,  was  in  Washing- 
ton, and  a  notice  sent  to  him  at  that  place  was  held  sufficient;  his  residence  be- 
ing at  Washington  during  the  session  of  Congress,  as  a  Senator  from  Massa- 
chusetts. Bank  of  Columbia  v.  Lawrence,  1  Peters,  578;  2  id.  553.  Bank  of 
U.  S.  v.  Lane,  3  Hawks,  453  If  the  party's  residence  be  part  of  the  time  in 
one  place  and  part  in  another,  the  notice  should  be  sent  where  he  is  most  usu- 
ally to  be  found.  McLean  v.  Waters,  9  Dana  R.,  99.  But  it  is  sufficient  to  send 
the  notice  to  the  drawer  or  indorser's  general  residence  or  domicil,  where  no 
direction  has  been  given  by  him  in  respect  to  it.  Marr  v.  Johnson,  9  Yerger, 
1,  6;  2  Caines's  R.,  121.  If  the  indorser  have  in  fact  no  residence  or  place  of 
business  when  the  note  matures,  no  notice  is  necessary  in  order  to  charge  him. 
Tunstall  v.  Walker,  2  Smedes  and  Marsh,  638.  But  if  he  have  a  residence  and 
place  of  business,  though  he  may  have  been  absent  from  it  a  considerable  time, 
the  notice  should  be  left  either  at  his  residence  or  place  of  business.  Pierce  v. 
Pendar,  5  Met.,  353.  Where  the  holder  knows  of  the  death  of  the  indorser,  but 
cannot  with  reasonable  diligence  ascertain  who  are  his  legal  representatives,  it 


PROCEEDINGS   05    NON-PAYMENT,  NOTICE.  611 

The  principle  to  be  extracted  from  the  authorities  is,  that 
if  the  notary  enquire  of  persons  who,  from  their  connexion 
with  the  transaction  are  likely  to  know  the  residence  of  the 
indorser,  and  are  not  interested  to  mislead  the  notary,  and  he 
acts  on  the  information  thus  obtained,  it  is  due  diligence  on 
his  part,  i  Where  the  enquiry  cannot  be  made  of  any  of  the 
parties,  the  notary  should  go  among  the  business  men  of  the 
place,  and  make  a  thorough  enquiry  at  places  of  public  resort, 
and  among  such  persons  as  would  be  most  likely  to  know  the 
residence  of  the  indorser.  2  Merely  making  enquiry  at  the 
post  office  or  in  a  public  bar-room,  of  persons  whom  he  can- 
not remember,  is  not  enough.  But  if  he  is  told  distinctly  by 
a  credible  person  who  has  no  interest  to  mislead  him,  where 
the  indorser  or  drawer  resides,  he  has  a  right  to  assume  and 
act  upon  the  information  as  true.  3 

There  is  a  slight  presumption  that  the  drawer  of  a  bill  or 
the  maker  of  a  note,  resides  at  the  place  where  the  paper  is 
dated;  4  but  it  is  not  sufficient  to  send  notice  to  the  place 
where  the  bill  is  dated,  if  the  drawer  reside  elsewhere,  and 
no  enquiry  be  made.  5  In  respect  to  the  indorser,  no  pre- 

1  Rawdon  v.  Redfield,  2  Sand.  R.,  178.  This  is  the  rule  stated  by  Ch.  J. 
Oakley,  who  had  had  as  much  experience  in  the  trial  of  commercial  case*  M 
any  other  judge  in  the  country. 

1  Spencer  v.  The  Bank  of  Salina,  3  Hill  R.,  620. 

»  Idem;  2  Sand.,  178;  21  Wend.,  643;  2  Hill,  687. 

4  3  Hill,  521 ;  3  Denio  R.,  146;  Carroll  v.  Upton,  3  Comst.  R.,  274.  Bronson 
Ch.  J.  "The  fact  that  the  bill  purported  to  have  been  drawn  at  Washington 
city,  where  the  notice  was  sent,  furnished  very  little,  if  any,  evidence  that  the 
drawer  resided  at  that  place;  and  did  not  dispense  with  the  necessity  of  inquir- 
ing for  his  residence." 

•  Lowry  v.  Scott,  24  Wend., 358;  Hill  T.  Varrell,  8  Gre«nl..  282;8  Hill, 620. 


will  be  sufficient  to  send  the  notice  directed  to  the  indoraer.    Barnes  T.  Rey- 
nolds, 4  How,  Miss.,  114. 

In  several  of  the  States,  promissory  notes  are  not  governed  by  the  law  mer- 
chant ;  and  in  most  of  these  it  is  incumbent  upon  the  holder  to  use  diligence  in 
the  attempt  to  collect  the  same  of  the  maker  by  bringing  a  suit  thereon  within 
the  time  and  in  the  manner  pointed  out  by  statute.  Perrin  v.  Broadwcll,  8 
Dana,  596;  Oldham  v.  Bengan,  2  Litt.  132;  Horton  r.  Frink,  6  Day,  530;  Le« 
v  Love  1  Call.  R..  497 ;  Morgan  Y.  Tipton,  8  McLean,  889;  Haggerty  T.  Brad- 
ford, 9  Ala.,  667;  Dorsey  T.  Hadlock,  7  Blackf,  118,  682.  See  notes  to  a  for- 
mer chapter. 


€12  BILLS    OF  EXCHANGE   AND   PROMISSORY  NOTES. 

sumption  whatever  arises  as  to  his  place  of  residence,  from 
the  date  of  the  bill  or  note,  1 

Where  the  indorser's  residence  is  known  to  the  indorsee  of 
a  bill  or  note,  the  latter  is  not  bound  to  institute  inquiry  to 
ascertain  whether  the  indorser  may  not  have  removed  to 
another  place  before  the  paper  fell  due;  for,  as  he  has  no 
reason  to  expect  such  an  event,  no  considerations  of  diligence 
would  naturally  prompt  him  to  make  any  inquiry  in  relation 
to  it.  Accordingly,  where  the  place  of  an  indorser's  resi- 
dence is  established  at  the  time  when  a  note  having  the  usual 
time  of  bankable  paper  to  run  is  discounted,  and  is  at  such  a 
distance  from  the  place  of  payment  as  to  repel  the  presump- 
tion that  a  removal,  (in  case  it  happens  before  the  note  falls 
due,)  would  come  to  the  knowledge  of  the  holders,  and  no 
actual  knowledge  is  brought  home  to  them,  a  notice  of  demand 
and  non-payment  directed  to  such  place  of  residence  is 'suffi- 
cient, although  the  indorser  has  in  fact,  in  tjie  mean  time, 
become  a  resident  of  another  place.  2  The  good  sense  of  this 
rule  has  received  here  the  sanction  of  a  general  statute, 
expressly  rendering  it  sufficient  to  send  the  notice  to  the 
indorser  at  the  place  where  he  resided  when  the  indorsement 
was  made.  3 

Where  there  is  no  dispute  about  the  facts,  the  question 
whether  there  has  been  due  diligence  or  not  belongs  to  the 
court  as  matter  of  law,  and  not  to  the  jury.  4  If  the  evidence 

xldem;  see  Bank  of  Utica  v.  Davidson.  5  Wend.,  587. 

8  Bank  of  Utica  v.  Phillips,  3  Wend.  R.,  408.     The  opinion  of  the  court  was 
delivered  in  this  case  by  Mr.  Justice  Marcy.     5  id.  687. 

3  The  Bank  of  Utica  v.  Phillips  was  decided  in  1829,  and  the  statute  was 
passed  in  1835;  see  2  R.  S.,  55,  3d  ed;  see  Seneca  Co.  Bank  v.  Neass.  5 Demo, 
329. 

4  Bank  of  Utica  v.  Bender,  21  Wend.,  643;  Remer  v.  Downer,  23  Wend., 
620;  and  3  Hill  R.,  520.     "When  all  the  facts  are  ascertained,  what  is  due 
diligence  in  making  inquiries  for  the  residence  of  the  drawer  is  a  question  of 
law.     But  due  diligence  in  the  aggregate,  includes  both  fact  and  law.     When 
a  witness  swears  to  due  diligence  in  making  inquiries,  he  speaks  of  two  things; 
first,  that  there  was  some  diligence,  which  is  a  matter  of  fact;  and  second, 
that  there  was  due  and  sufficient  diligence,  which  is  matter  of  law."    3  Comst 
R.,  274. 


PROCEEDINGS  OK   NON-PAYMENT,  NOTICE.  613 

is  doubtful  or  contradictory,  it  is  for  the  jury  to  decide  under 
instructions  from  the  court,  i 

The  same  rule  in  respect  to  diligence  applies  whether  the 
notice  is  given  by  mail  or  otherwise;  the  holder  is  bound  to 
use  reasonable  diligence  to  communicate  tin-  notice  to  the 
drawer  or  indorser.  If  the  parties  reside  in  the  same  city  or 
place,  the  indorser  or  drawer  must  under  the  law-merchant, 
be  personally  notified  of  the  dishonor  of  the  bill  or  note, 
either  verbally  or  in  writing;  or  a  written  notice  must  be  left 
at  his  dwelling  house  or  place  of  business.  But  where  the 
notary  calls  at  the  dwelling  house  of  the  indorser,  at  the 
regular  time  and  at  a  seasonable  hour,  to  serve  the  notice, 
and  finds  the  house  shut  up,  the  doors  locked  and  the  family 
absent  from  town,  he  is  not  bound  to  call  a  second  time,  nor 
is  he  under  any  obligation  to  leave  a  written  notice.  2  So, 
where  a  cashier  called  at  the  counting  house  of  the  drawer, 
for  the  purpose  of  giving  him  notice  of  dishonor,  found  the 
outward  door  open  and  the  inner  one  locked,  and  knocked 
and  made  noise  enough  to  have  been  heard  if  any  one  had 
been  there,  and  no  person  answered  the  call;  it  was  held  that 
this  was  due  diligence,  though  no  written  notice  was  left  there 
and  none  put  in  the  post-office.  3  The  principle  of  the  deci- 
sion is,  that  the  counting  house  of  the  drawer  is  the  place 
where  the  holder  is  entitled  to  look  for  him  during  the  usual 
hours  of  business,  so  that  the  omission  to  give  the  notice  is 
not  occasioned  by  the  want  of  diligence  in  the  holder,  but  by 
the  neglect  of  the  party  entitled  to  notice,  i 

1  7  Peters  R.,  290;  10  id.  680.  It  is  a  mixed  question  of  law  and  fact,  and 
like  other  questions  of  that  nature  must  be  submitted  to  the  jury  to  decide 
tinder  the  direction  of  the  court.  EHms  v.  Herrick,  6  Ham.,  55;  Nash  r. 
Harrington,  1  Aik.,  89. 

*  Williams  v.  The  Bank  of  the  U.  S.,  2  Peters  R.,  96.    The  notary  called  at 
the  house  of  the  defendant,  Williams,  who  lived  in  Cincinnati,  on  the  right 
day,  found  it  shut  up,  and  the  door  locked;  and  on  inquiry  of  the  near  art 
resident,  he  was  informed  that  the  defendant  and  family  had  left  town  on  a 
visit;  whether  for  a  day  or  week,  or  month,  he  did  not  know,  nor  did  ho 
inquire.    Under  our  recent  statute,  quero,  should  he  not  deposit  a  notice  In 
the  post  office  ? 

*  Crosse  v.  Smith,  1  Maule  and  Selw.,  546. 

4  If  a  party  to  a  contract  who  is  entitled  to  the  benefit  of  a  condition,  upon 
the  performance  of  which  his  responsibility  is  to  arise,  dispense  with,  or  by 


614  BILLS   OF  EXCHANGE  AND  PROMISSORY  NOTES. 

Of  course  the  circumstances  are  to  be  considered  in  deter- 
mining whether  the  mere  act  of  going  to  the  door  of  the 
counting  house  and  knocking  for  admission  and  finding  no 
one  there,  shall  operate  to  dispense  with  notice  altogether,  or 
only  to  extend  the  time  of  giving  it.  i  If  all  the  facts  and 
circumstances  together  shew  a  diligent  and  faithful  effort  to 
serve  the  notice,  and  that  the  failure  to  serve  it  in  due  time 
arose  from  the  absence  of  the  party  entitled  to  notice,  it  will 
be  sufficient  to  charge  the  drawer  or  indorser.  Thus,  where 
the  notary  calls  at  the  boarding  house  of  the  indorser  and  does 
not  find  him  there,  it  is  sufficient  to  leave  the  notice  for  him 
with  the  master  of  the  house  or  with  a  fellow  boarder  to  be 
handed  to  him;  2  and  where  the  indorser's  dwelling  house  and 
place  of  business  are  both  closed  up,  and  no  one  can  be  found 
at  either  place  to  receive  the  notice,  it  is  abundantly  sufficient 
to  deposit  the  notice  in  the  post-office  addressed  to  him.  3 
And  under  the  recent  statute  it  is  sufficient  in  this  state  to 
deposit  the  notice  in  the  post-office  properly  addressed  and 
pre-paid,  without  making  any  effort  to  serve  it  on  the  drawer 
or  indorser  personally. 

Time  of  serving  notice.  Notice  of  dishonor  cannot  be  given 
until  after  a  demand  and  refusal  of  payment;  4  though  it  is 
not  necessary  that  the  party  giving  the  notice  should  have,  at 
the  time,  personal  knowledge  of  the  fact  of  dishonor.  5  In 

1  Allen  v.  Edmundson,  2  Ex.  Ch.  Rep.,  719. 

9  Stedman  v.  Grouch,  1  Esp.  R.,  4.  In  this  ease  the  notice  left  with  the  wo- 
man who  kept  the  boarding  house  was  held  good.  In  the  Bank  of  the  U.  S. 
v.  Hatch,  6  Peters'  R.,  250,  a  notice  left  with  a  fellow  boarder  to  be  delivered 
to  Hatch,  was  adjudged  good. 

8  Ogden  v.  Cowley,  2  John.  R.,  274;  see  Miles  v.  Hall,  12  Smedes  and  Mar- 
shall, 332. 

4  Jackson  v.  Richards,  2  Caines  R.,  343,    A  premature  notice  is  a  nullity. 

8  Jennings  v.  Roberts,  4  Ellis  and  Blackburn's  R.,  615.  If  the  notice  une- 
quivocally asserts  the  fact  of  dishonor,  it  is  immaterial  to  the  party  notified 
whether  the  person  giving  it  acted  upon  his  own  personal  knowledge  or  not. 

any  act  of  his  own  prevent  the  performance,  the  opposite  party  is  excused 
from  proving  a  strict  compliance  with  the  condition. 

In  Ogden  v.  Cowley,  2  John.  R.,  274,  the  notary  finding  the  indorser's  house 
ehut  up,  and  being  told  that  he  was  out  of  town,  enclosed  and  deposited  a 
notice  addressed  to  him,  in  the  post  office;  and  it  was  held  good  service. 


PROCEEDINGS   ON    NON-PAYMENT,  NOTICE.  615 

general  terms,  the  notice  must  be  given  within  a  reasonable 
time  after  the  dishonor;  but  the  law  determines  with  great 
precision  what  is  reasonable  time. 

A  notice  given  the  day  the  bill  or  note  becomes  due,  is  not 
too  soon;  for  though  payment  may  still  be  made  within  the 
day,  non-payment  on  presentment  is  a  dishonor,  i  And  where 
the  third  day  of  grace  falls  on  Sunday,  the  presentment  for 
payment  and  notice  of  non-payment  may  be  made  and  given 
on  Saturday,  which  is  in  that  case  the  last  day  of  grace.  2 
But  the  holder  is  not  bound  to  give  notice  on  that  day,  nor  on 
Sunday;  and  it  will  be  in  time  if  given  on  the  Monday 
lowing.  3  For  the  rule  requiring  the  notice  to  be  served  on 
or  before  the  next  day,  means  the  next  business  day.  4  So 
that  if  the  note  or  bill  be  dishonored  on  the  third  day  of  July, 
it  will  be  sufficient  to  give  the  notice  on  the  fifth,  5  or  on  the 
day  following  a  general  holiday,  when  that  comes  on  the  next 
day  after  the  dishonor.  6 

Where  the  parties  reside  in  the  same  place,  notice  to  the 
drawer  or  indorser  on  the  day  of  the  dishonor  and  after  it,  or 
in  the  course  of  the  next  succeeding  day,  is  reasonable,  is  in 
time ;  ~  but  the  notice  is  not  in  time  unless  it  be  given  so  as 
to  reach  the  party,  residing  in  the  same  place,  on  the  day 

1  Bainbridge  v.  Manners,  3  Campb.,  193;  Youngs  v.  Lee,  2  Kernan  R..  561. 
In  Cook  v  Litchfleld,  5  Sand.  R.,  830,  the  notice  was  dated  on  the  day  of  dis- 
honor  in  the  same  manner  as  in  Youngs  v.  Lee;  Corf  v.  M'Comb,  1  John.  Caa., 
828;  Lindenberger  and  al.  v.  Beall,  6  Wheat.  R.,  104;  Coleman  v.  Carpenter, 
9  Barr.  178. 

*  Bussard  v.  Levering,  6  Wheat.  R.,  102;  6  Cond.  R.,  18. 

*  2  Caines  R.,  343;  Williams  v.  Matthews,  8  Cowen  R.,  262,  262;  Howard  T. 
Ives,  1  Hill  R.,  263. 

4  Haynes  v.  Bjrks,  3  Bos.  and  Pull.,  699;  Church  T.  Barlow,  9  Pick  ,  647; 
Wright  v.  Shawcross,  2  Barn,  and  Aid.,  601. 

*  Cuyler  v.  Stevens,  4  Wend.,  666.     But  if  one  of  the  indorse™  receive  a  no- 
tice of  dishonor  on  the  fourth  day  of  July,  it  must  be  served  or  sent  forward 
on  the  day  following,  or  it  will  be  too  late.    Fanner  v.  Rand.,  16  Maine,  (4 
Shep),463. 

6  Idem ;  1  Hill,  263.     See  statute  of  1849. 

T  Grand  Bank  v.  Blanchard,  23  Pick..  306.  Such  a  notice  is  in  time,  though 
it  be  the  custom  of  the  bank  to  give  notice  on  the  day  of  dishonor.  Smith  T. 
Mullett,  2  Campb.,  208;  Scott  v.  Lifford,  9  East,  847;  Williams  T.  Smith,  2 
Barn,  and  Aid.,  500. 


616  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

succeeding  the  dishonor.  If  sent  by  the  penny  post,  as  it 
may  be  in  London,  it  must  be  deposited  in  time  to  be  deliv- 
ered on  that  day.  i  Lord  Ellenborougb: :  "  Where  the  parties 
reside  in  London,  each  party  should  have  a  day  to  give  notice. 
I  have  before  said,  the  holder  of  a  bill  of  exchange  is  not, 
omissis  omnibus  aliis  negotiis,  to  devote  himself  to  giving  notice 
of  its  dishonor.  It  is  enough  if  this  be  done  with  reasonable 
expedition.  If  you  limit  a  man  to  the  fractional  part  of  a 
day,  it  will  come  to  a  question  how  swiftly  the  notice  can  be 
conveyed.  A  man  and  horse  must  be  employed,  and  you  will 
have  a  race  against  time.  But  here  a  day  has  been  lost.  The 
plaintiff  himself  had  notice  on  the  Monday,  and  does  not  give 
notice  to  his  indorser  till  Wednesday.  If  a  party  has  an 
entire  day,  he  must  send  off  his  letter  conveying  the  notice, 
within  post  time  of  that  day.  The  plaintiff  only  wrote  the 
letter  to  the  defendant  on  Tuesday.  It  might  as  well  have 
continued  in  his  writing  desk  on  Tuesday  night  as  be  in  the 
post  office.  He  has  clearly  been  guilty  of  laches  by  which 
the  defendant  is  discharged."  2  It  follows  that  the  person 
who  puts  the  letter  into  the  penny  post  on  the  day  when  it 
ought  to  be  received,  must  shew  affirmatively  that  it  was 
deposited  in  time  to  be  received  on  that  day.  3 

So,  where  the  holder  sends  notice  to  the  indorser  residing  in 
the  same  place,  by  a  private  hand,  it  must  be  served  before 
the  expiration  of  the  day  succeeding  the  dishonor.  4  In  short 

1  Doebree  v.  Eastwood,  3  Carr.  and  P.,  250. 

2  Smith  v.  Mullett,  supra;  Scott  v.  Lifford,  9  East,  347.     This  action  was 
brought  by  the  indorsee  against  the  drawer.    The  plaintiff  had  placed  the  bill 
in  the  hands  of  Down  &  Co.,  his  bankers,  and  they  on  the  fourth  of  June, 
when  it  became  due,  presented  it  for  payment,  and  it  was  dishonored.    On  the 
fifth  they  returned  it  to  the  plaintiff  who  gave  notice  through  the  penny  post 
to  the  defendant  on  the  sixth     Lord  Ellenborough:  lt  I  cannot  say  that  the 
holder  on  the  return  of  the   bill  dishonored  is  bound,  omissus  omnibus  aliis 
negotiis,  to  post  off  immediately  with  notioe;  if  reasonable  diligence  is  used 
it  is  sufficient."     See  Tindall  v.  Brown,!  Term,  167;  Bryden  v.  Bryden,  11 
John,  R.,  187. 

3  Fowler  v.  Hendon.  1  Tyr.,  1002.    The  post  mark  is  not  conclusive  evidence 
of  the  time  when  a  letter  is  mailed.     Stocken.  v.  Collins,  7  Mee.  and  W.,  515; 
S.  C.,9C.  and  P.,  65$  ,•  38  Eng.  Com.  Law  Rep.,  273.    The  holder  is  not 
answerable  for  the  delay  of  the  penny  post. 

4  Bancroft  v.  Hall,  Holt  C.  N.  P.,  476;  Jameson  v.  Swinton,  2  Taunt.,  224; 
S.C.,  2Campb.,  373. 


PROCEEDINGS  ON    NON-PAYMENT,  NOTICE.  617 

it  is  not  at  all  material  in  what  manner  the  service  is  made, 
if  the  notice  actually  reaches  the  party  in  due  time;  i  that  is 
to  say,  on  the  right  day  and  within  the  customary  hours  of 
business,  having  respect  to  the  usages  of  the  plact 

Where  the  parties  do  not  reside  in  the  same  place,  the 
notice  of  dishonor  must  be  put  into  the  post  office  early 
enough  to  go  by  the  mail  of  the  day  succeeding  the  last  day 
of  grace;  3  unless  the  mail  of  that  day  is  closed  at  an 
unreasonably  early  hour,  or  before  early  and  convenient 
business  hours.  4  The  law  does  not  require  the  holder  to 

1  Bank  of  Columbia  v.  Lawrence,  1  Peters,  578;  see  also  Tunnies  T.  Delisle, 

7  Blackf..  447;  Remington  v.  Harrington,  7  Ham.  Ohio,  607;  Jones  T.  Lewis, 

8  Watts  and  Serg.,  14. 

1  9  Wheat.,  587;  2  Burr.,  669;  Cayuga  Co.  Bank  v.  Hunt,  2  Hill  R.,  686. 
A  notice  left  at  the  office  of  an  attorney  on  the  evening  of  the  day  is  sufficient 
to  charge  him.  Stanley  v.  Bank  of  Mobile,  23  Ala.,  652;  so  a  notice  left  at 
the  room  of  a  member  of  the  Legislature  during  the  session  is  good.  Graham 
v.  Sangstone.,  1  Md.,  59.  When  left  at  the  indorsees  place  of  business,  the 
notice  should  be  handed  to  the  clerk.  Rives  v.  Parmley,  18  Ala.,  256. 

*  Lenox  v.  Roberts,  2  Wheat.,  373;  Bank  of  Alexandria  v.  Swann,  9  Peters, 
33;  2  Hill  R.,  451. 

4  Lawson  and  Covode  v.  The  Farmers'  Bank  of  Salem,  1  Ohio  State  N.  S., 
206.  Decided  in  1853.  The  rule  as  laid  down  in  this  case  is,  that  in  order  to 
charge  the  indorser  living  in  another  place  or  State,  the  notice  mutt  be  depo- 
sited in  the  post  office  in  time  to  be  sent  by  the  mail  of  the  day  succeeding  the 
day  of  the  dishonor,  providing  the  mail  of  that  day  be  not  closed  at  an  unrea- 
sonably early  hour,  or  before  early  and  convenient  business  hours.  Fullcrton 
et  al  v.  The  Bank  of  U.  S.,  1  Peters,  605.  618;  Eagle  Bank  v.  Chapin,  3  Pick., 
180,  183;  Talbot  v.  Clark,  8  Pick.,  51;  Carter  v.  Bailey,  9  N.  Hamp.,  669; 
Farmers'  Bank  of  Maryland  v.  Duvall,  7  Gill,  and  John.,  79;  Freeman's  Bank 
v.  Perkins,  18  Maine  R.,  292;  Mead  v.  Engs,  6  Cowen  R.,  803;  Sewell  v.  Rus- 
sell, 3  Wend.,  276;  Brown  v.  Ferguson,  4  Leigh,  87;  Dodge  v.  Bank  of  K. n- 
tucky,  2  Marshall,  610;  Hickman  v.  Ryan,  SLittell,  24;  Hartford  Bank  T. 
Stedman,  3  Conn.,  489;  Brenger  v.  Wightman,  7  Watts  and  Serg..  264;  Touns- 
ley  v.  Springer,  1  Lou.R.,  222;  Bank  of  Natchez  v.  King,  2  Rob.,  248;  Brown 
v.  Turner.  1  Ala.  R.,  752;  Lockwood  v.  Crawford,  18  Conn.,  868. 

In  Lawson  and  Covode  v.  The  Farmers'  Bank  of  Salem,  supra,  the  draft  fell 
due  on  the  27th  July,  1848,  at  Pittsburgh,  and  the  mail  left  there  at  10  A.  M. 
on  the  next  day,  closing  at  ten  minutes  past  nine;  and  it  was  held  incumbent 
on  the  holder  to  forward  the  notice  by  tnat  mail.  In  Hawks  v.  Salter,  4  Bing.. 
716,  where  the  bill  was  dishonored  on  Saturday  in  a  place  where  the  post  went 
out  at  half  past  nine  in  the  morning,  it  was  held  sufficient  to  send  a  letter  by 
the  following  Tuesday  morning's  post.  1  Mos.  and  P.,  750;  Bray  T.  Hedwea, 
5  M.  and  Sel.,  68. 

37 


i 


618  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

give  the  earliest  possible  notice  of  the  dishonor :  it  requires  of 
him  only  an  ordinary  and  reasonable  diligence.  If  the  notice 
be  sent  by  the  usual  route,  it  will  be  sufficient,  though  it 
might  have  arrived  sooner  if  sent  by  another,  i  If  there  be 
two  mails  leaving  on  the  same  day,  the  first  closing  before  the 
common  hours  of  business,  it  is  sufficient  to  transmit  the 
notice  by  the  second.  2  Indeed,  the  holder  is  not  bound  to 
send  oif  the  notice  by  a  mail  that  closes  before  the  usual 
hours  of  business  begin,  even  if  there  be  no  second  mail 
leaving  on  that  day,  3 

The  question  in  each  case  is,  whether  the  holder  has  used 
ordinary  and  reasonable  diligence  ?  And  it  is  very  evident 
that  the  usages  of  the  place  are  to  be  considered  in  determin- 
ing what  is  ordinary  and  reasonable  diligence.  Where  a 
notice  is  sent  to  a  bank,  and  the  mail  bringing  it  arrives  in 
the  evening  at  five  o'clock,  it  is  no  want  of  diligence  in  the 
officers  of  the  bank  if  the  notice  be  not  received  until  the 

1  Bank  of  Utica  v.  Smith,  18  John.  R.,  231. 

*  Howard  v.  Ives,  1  Hill  R.,  263. 

3  Chick  v.  Pillsbury,  supra;  and  Deminds  v.  Kirkman,  supra. 


Downs  v.  Planter's  Bank.  1  Smedes  and  Marsh,  (Miss.)  261.  When  the 
notice  is  sent  by  mail,  it  must  at  furthest,  be  put  into  the  post  office  in  time  to 
go  by  the  mail  of  the  next  day  succeeding  the  protest,  if  there  be  a  mail  which 
goes  on  tha"t  day,  and  if  not,  then  by  the  first  mail  which  goes  afterwards. 
The  holder  need  not  put  the  notice  in  the  office  on  the  same  day  the  note  is 
protested,  but  he  must  on  the  next  day,  in  time  for  a  mail  of  that  day,  unless 
it  leaves  at  an  unreasonably  early  hour. 

Deminds  v.  Kirkman,  id.  644.  When  the  mail  leaves  before  sunrise  in  the 
morning,  so  that  it  must  have  been  closed  the  night  before,  the  notice  need  not 
be  sent  by  it,  for  that  is  an  unreasonably  early  hour. 

Lock  wood  v.  Crawford,  18  Conn.  R.,  373.  The  notice  must  be  given  on  or 
before  the  next  day  after  the  dishonor ;  and  it  is  incumbent  upon  the  holder  to 
shew  affirmatively  that  the  notice  was  given  in  due  time. 

Chick  v.  Pillsbury,  24  Maine  R.,  458.  The  note  in  this  case  was  protested 
in  the  city  of  New-York,  and  notice  thereof  put  in  the  post  office  in  that  city 
on  the  next  day,  directed  to  the  defendant  at  his  residence,  Bangor,  Maine, 
"between  twelve  o'clock  at  noon  and  eight  o'clock  at  night ;"  and  it  was  proved 
that  there  was  only  one  mail  a  day  by  which  the  letter  could  be  sent,  and  that 
this  mail  went  out  at  seven  o'clock  in  the  morning,  closing  at  six.  And  it  was 
held  that  the  notice  was  transmitted  with  due  diligence. 


PROCEEDINGS   ON    NON-PAYMENT,  NOTICE.  619 

next  morning;  because  the  business  of  the  day  is  by  general 
custom  closed  at  an  earlier  hour.  I  On  the  same  principle 
the  time  at  which  the  business  of  the  day  begins,  among  com- 
mercial men,  is  to  be  considered  in  deciding  at  how  early  an 
hour  the  notice  must  be  mailed. 

The  holder  is  not  bound  in  any  case  to  send  off  the  n 
on  the  day  of  the  dishonor;  2  nor  is  either  of  the  indorsees 
bound  to  transmit  the  notice  to  his  indorser  on  the  day  he 
receives  it.  Each  party  has  a  day  for  giving  notice;  3  that 
is  to  say,  he  has  the  whole  of  the  day  on  which  the  note  or 
bill  is  dishonored,  or  the  whole  of  the  day  on  which  he 
receives  notice  thereof,  to  prepare  his  notice  for  the  parties 
liable  to  him.  Abbott,  Ch.  J.  "  It  is  of  the  greatest  impor- 
tance to  commerce,  that  some  plain  and  precise  rule  should 
be  laid  down,  to  guide  persons  in  all  cases,  as  to  the  time 
within  which  notice  of  the  dishonor  of  bills  must  be  pivm. 
That  time  I  have  always  understood  to  be,  the  departure  of 
the  post  on  the  day  following  that  in  which  the  party  receives 
intelligence  of  the  dishonor.  If,  instead  of  that  rule,  we  are 
to  say,  that  the  party  must  give  notice  by  the  next  practicable 
post,  we  should  raise  in  many  cases  difficult  questions  of  fact, 
and  should  according  to  the  different  local  situation  of  par- 
ties, give  them  more  or  less  facility  in  complying  with  the 
rule.  But  no  dispute  can  arise  from  adopting  the  rule  I  have 
stated."  4 

Taken  with  the  qualifications  already  suggested,  this  is 
unquestionably  the  general  rule  in  this  country  as  well  as  in 
England;  though  it  was  formerly  considered  necessary  that 
the  notice  should  be  transmitted  by  the  next  convenient  or 
practicable  post,  leaving  after  its  receipt.  5  All  things  con- 

1  Mead  v.  Engs.  5  Cowen,  303. 

1  Bank  of  Alexandria  v.  Swan,  9  Peters,  83;  Howard  v.  Ires,  t  Hill  R., 
263;  Hartford  Bank  v.  Stedman.  Conn.  R..  484;  Farmers  Bank  of  Maryland 
v.  Duvalt,  7  Gill-  and  John.,  79;  Whitwell  T.  Johnson,  17  Mass.,  449;  Carter 
T.  Burley,  9  N.  Hamp.,  669;  Dodge  v.  Bank  of  Kentucky,  2  Marsh.,  610. 

1  Bray  v.  Hadwen,  6  Maule,  68. 

4  2  B.  and  Aid.,  496. 

•  In  Darbishire  v.  Parker,  which  was  an  action  on  an  inland  bill.  6  East,  8, 
10,  Mr.  Justice  Lawrence  states  the  rule  in  these  words  :  "  The  general  rule 


620  BILLS    OF  EXCHANGE  AND    PROMISSORY    NOTES. 

sidered,  the  rule  as  now  settled  is  but  a  slight  modification  of 
that  which  prevailed  at  an  earlier  day.  The  material  change 
is  found  in  the  new  modes  and  facilities  of  communicating 
intelligence,  and  in  the  frequent  arrival  and  departure  of 
mails.  When  the  mail  seldom  left  any  place  oftener  than  once 
a  day,  the  rule  that  notice  must  be  sent  by  the  next  post  after 
intelligence  of  dishonor  of  the  bill  was  received,  did  not 
practically  require  any  greater  degree  of  diligence  than  must 
be  observed  under  the  rule  now  established,  i  But  when  at 
length  business  had  so  much  increased  and  communications 
by  mail  had  become  so  much  more  frequent,  it  became  neces- 
sary to  lay  it  down  as  a  rule  that  the  party  receiving  notice 

1  The  rule  was  at  no  time  so  strict  as  to  require  the  notice  to  be  sent  forward 
at  all  events  by  the  very  next  mail  after  its  receipt,  Mead  v.  Engs,  supra  ; 
t'.iough  it  was  stated  in  terms  that  seemed  to  imply  as  much.  The  opinions 
delivered  in  Darbishire  v.  Parker,  recognizing  the  rule  as  previously  held,  point 
out  very  clearly  the  necessity  of  modifying  it,  so  as  to  make  it  accommodate 
itself  to  the  business  affairs  of  life.  That  case  was  decided  in  the  Court  of 
King's  Bench,  in  1805. 


as  collected  from  Tindal  v.  Brown,  1  Term  R.,  167,  and  other  cases,  seems  to 
be  with  respect  to  persons  living  in  the  same  town  that  the  notice  shall  be 
given  by  the  next  day;  and,  with  regard  to  such  as  live  at  different  places, 
that  it  shall  be  sent  by  the  next  post.  But  if  in  any  particular  place  the  post 
should  go  out  so  early  after  the  receipt  of  the  intelligence  as  that  it  would  be 
Inconvenient  to  require  a  strict  adherence  to  the  general  rule,  then,  with  res- 
pect to  a  place  so  circumstanced,  it  would  not  be  reasonable  to  require  the 
notice  to  be  sent  till  the  second  post.  Considering  the  immense  circulation  of 
paper  in  this  kingdom,  it  is  very  material  to  have  some  general  rule  by  which 
men  may  know  how  they  are  to  act  in  these  cases  j  leaving  parties  in  particular 
cases,  where  compliance  with  such  rule  cannot  be  reasonably  expected,  to 
account  for  their  non-compliance  with  the  strict  rule." 

Lord  Ellenborough,  C.  J.,  observes  in  the  same  case,  "  There  appears  to  me 
considerable  difficulty  in  laying  down  any  certain  time  within  which  notice 
must  at  all  events  be  given.  The  general  direction  indeed  of  Marius  and  other 
writers,  is  to  send  notice  of  the  dishonor  of  a  bill  by  the  next  post,  where  the 
parties  do  not  live  in  the  same  place;  and  the  same  was  said  in  Tindal  v. 
Brown ;  and  yet  in  that  case  it  was  considered  sufficient  if  notice  were  given 
the  next  day,  where  the  parties  all  lived  in  the  same  town.  If  notice  must  at 
any  rate  be  communicated  by  the  next  post  after  it  is  received,  it  must  oftea 
happen  that  the  party  will  not  have  a  day,  or  any  thing  like  a  day,  to  give  it 
in;  for  the  post  may  go  out  immediately  or  very  soon  after  the  letter  of  advice 
arrives.  There  must  therefore  be  some  reasonable  time  allowed,  and  that  too, 
accommodating  itself  to  other  business  affairs  of  life ;  otherwise  it  is  saying 


PROCEEDINGS   ON    NON-PAYMENT,  NOTICE.  621 

h  not  bound  to  send  it  forward  on  the  same  day.  i  A  careful 
examination  of  the  decisions,  with  reference  to  the  order  of 
time  in  which  they  were  made,  shews  this  to  have  been  the 
process  by  which  the  rule  was  liberalized  and  made  to  accom- 
modate itself  to  other  business  affairs  of  life.  2 

1  Scott  v.  Lifford,  9  East,  847;  Bray  and  others  T.  Hadwen,  5  Maule  and 
Sel.,  68. 

*  Scott  T.  Lifford,  was  decided  in  1808,  holding  that  where  the  indorsee  of 
a  bill  of  exchange  !•  dged  it  with  his  bankers  who  presented  it  for  payment 
on  the  fourth,  when  it  was  dishonored,  and  on  the  fiftk  returned  it  to 
the  indorsee,  who  gave  notice  to  the  drawer  on  the  tixtk,  the  notice  was  rea- 
sonable. 

Bray  and  others  T.  Hadwen,  5  Maule  and  Selw.,  68,  was  decided  in  the 
Court  of  King's  Bench  in  1816,  and  Lord  Ellenborough,  C.  J.,  delivering  the 
opinion  there,  says:  '*  It  has  been  laid  down,  I  believe,  since  the  case  of  Dar- 
byshire  T.  Parker,  as  a  rule  of  practice,  that  each  party,  into  whose  bands  a 
dishonored  bill  may  pass,  should  be  allowed  one  entire  day  for  the  purpose  of 
giving  notice;  a  different  rule  would  subject  every  party  to  the  inconvenience 
of  giving  an  account  of  all  his  other  engagements,  in  order  to  prove  that  he 
could  not  reasonably  be  expected  to  send  notice  by  the  same  day's  post  which 
brought  it."  The  exact  point  decided  was  that  the  party  receiving  notice  at 
eight  or  half  past  eight  o'clock  in  the  morning  was  not  bound  to  send  it  for- 
ward by  a  mail  leaving  at  twelve. 

Williams  v.  Smith,  2  Barn,  and  Aid.,  497,  decided  in  1819,  lays  down  the 
rule  as  stated  in  the  text 

In  Hawks  v.  Suitor,  4  Bing  ,  716,  decided  in  1828;  a  bill  was  dishonored  on 
Saturday,  in  a  place  where  the  post  went  out  at  half  after  nine  in  the  morning, 
and  Ch.  J.  Best  expressed  the  opinion  of  the  court  that  it  was  sufficient  notice 
of  dishonor  to  send  a  letter  by  the  following  Tuesday  morning's  post ;  that  the 
bolder  was  not  bound  to  mail  the  notice,  early  enough  to  go  by  the  Monday 
morning's  mail.  1  Moore  and  Paynes  R.,  750. 

Geill  T.  Jeremy  and  another,  1  Moody  and  Malkins  R.,  61,  decided  at  Nisi 
Prius,  in  1827.  In  this  case  the  plaintiff  received  notice  at  his  residence  near 
Cherley,  in  Lancashire,  by  the  post  at  nine  o'clock  in  the  morning  of  Thnrt- 


that  a  man  who  has  bill  transactions  passing  through  his  hands  must  be  nailed 
to  the  post  office,  and  can  attend  to  no  other  business,  however  orgeat,  till 
this  is  despatched.  But  if  there  be  a  reasonable  time  between  the  coming  in 
and  going  out  of  the  post  on  the  same  day,  as  in  this  case  four  or  fire  hour* 
may  be  contended  to  be,  allowing  for  reasonable  diligence  in  other  concerns  as 
well  as  in  this,  it  would  be  a  material  question,  if  neatly  raised,  whether  the 
party  were  bound  to  communicate  by  the  next  post  the  intelligence  he  had  re- 
ceived by  the  post  on  the  same  day."  The  doctrine  of  this  case  is  approved 
in  Mead  T.  Engs.  5  Cowen  R.,  308,  but  with  a  qualification  that  diligence  doe* 
not  require  the  neglect  of  other  duties  in  order  to  forward  the  notice  by  the 
very  next  mail. 


622  BILLS  OF    EXCHANGE   AND  PROMISSORY  NOTES. 

The  result  of  the  authorities  then  is,  that  the  holder  of  a 
bill  or  note  is  bound  to  despatch  the  notice  of  dishonor  by 
mail  on  the  day  after  default  is  made  in  payment  of  it,  unless 
the  mail  closes  at  an  unreasonably  early  hour;  that  an  indor- 
ser  is  bound  to  use  the  same  diligence  in  sending  it  forward 
on  the  day  after  he  receives  it;  and  that  neither  of  them  is 
obliged  by  law  to  send  it  forward  on  the  very  day  the  bill  is 
dishonored,  or  the  notice  received. 

When  it  happens,  as  it  does  sometimes,  that  no  mail  leaves 
on  the  day  after  notice  is  received,  or  the  paper  is  dishonored, 
it  is  sufficient  to  put  the  letter  into  the  post-office  in  time  to 
go  by  the  next  mail;  for  it  is  immaterial  whether  in  the  mean- 
time the  notice  lies  in  a  public  or  private  office,  i 

For  the  purpose  of  giving  notice,  a  bank  or  banker  with 
whom  a  bill  or  note  is  deposited  for  collection,  is  to  be  con- 
sidered as  a  distinct  holder,  and  has  a  day  to  give  notice  to 
his  customer;  while  the  customer  has  another  day  in  which 
to  give  notice  to  the  antecedent  parties.  2  The  rule  is  the 
same,  though  the  paper  be  transmitted  through  several  banks 
indorsed  from  one  to  the  other  for  collection :  3  each  of  them 

1  Geill  v.  Jeremy,  supra;  Chick  v.  Pillsbury,  supra. 

2  Bray  v.  Hadwen,  supra;  Robson  v.  Bennett,  2  Taunt.,  388;  Langdale  v. 
Trimmer,  15  East,  291 ;  Howard  v.  Ives.  1  Hill  R.,  263. 

3  Mead  v.  Engs,  supra;  Bank  of  United  States  v.  Davis,   2  Hill  R.,  451; 
Haynes  v.  Birks,  3  Bos.  and  P.,  599;  Robson  v.  Bennett,  supra,  Colt  v.  Noble, 
5  Mass.  R.,  167. 

day,  and  the  post  left  the  village  at  six  that  evening;  but  the  plaintiff  did  not 
write  by  that  post  which  would  have  reached  London  on  Saturday;  and  as 
there  was  no  mail  leaving  on  Friday  he  did  not  send  the  notice  forward  till 
Saturday.  Lord  Tenterden  C.  J.:  i(  In  these  cases  it  is  of  great  importance 
to  have  a  fixed  rule,  and  not  to  resort  to  nice  questions  of  the  sufficiency,  in 
each  particular  case,  of  a  certain  number  of  hours  or  minutes.  The  general 
rule  is  that  the  party  need  not  write  on  the  very  day  that  he  receives  the 
notice.  If  there  be  no  post  on  the  following  day,  it  makes  no  difference;  the 
next  post  after  he  receives  the  notice  is  soon  enough." 

Boyd  v.  Emmerson  and  others,  4  Nev.  and  Man.  R.,  99,  decided  in  1834. 
When  a  customer  pays  into  his  bankers,  in  the  ordinary  way,  a  check  drawn 
upon  them  by  another  of  their  customers,  the  bankers  are  entitled  to  the  same 
time  for  ascertaining  whether  the  check  will  be  paid,  and  for  giving  notice  of 
dishonor  (in  case  it  be  resolved  by  them  not  to  pay  the  check)  as  where  the 
check  is  drawn  upon  other  bankers.  If  it  be  received  on  Monday,  it  is  in  time 
to  return  it  with  notice  of  dishonor  on  Tuesday. 


PROCEEDINGS    OX    NON-PAYMENT,  NOTICE.  623 

is  to  be  regarded  as  a  party  to  the  paper  for  all  the  purposes 
of  receiving  and  giving  notice  to  charge  the  prior  parties,  just 
the  same  as  if  the  property  in  the  bill  or  note  had  been  trans- 
fered  for  value.  And  it  has  been  held  in  England  that 
where  a  bill  of  exchange  is  indorsed  from  one  to  another 
branch  of  the  same  bank,  each  of  the  branch  banks  is  to  be 
considered  a  distinct  holder,  and  is  entitled  to  the  usual 
notice  of  dishonor,  i 

The  holder  should  give  notice  of  dishonor  to  all  the  parties 
to  whom  he  intends  to  look  for  payment,  2  but  it  is  enough  for 
him  to  send  or  give  due  notice  to  his  indorsers  for  the  purpose 
of  charging  the  party  indorsing  the  bill  over  to  him; 3  and  it 
is  the  business  of  each  indorser  to  take  care  that  the  party 
responsible  to  him  is  duly  notified,  i  Whether  there  be  few 
or  many  indorsers,  the  duty  of  each  is  the  same :  if  the  notice 
be  transmitted  from  one  indorser  to  another  in  the  inverse 
order  of  their  indorsements,  and  one  of  them  sends  it  forward 
on  the  day  he  receives  it,  and  a  prior  indorser  lets  it  lie  over 
one  day  too  late,  the  latter  cannot  excuse  his  neglect  by  shew- 
ing that  the  holder  or  one  of  the  subsequent  indorsers  had 
used  greater  diligence  than  was  required  of  him,  so  that 
altogether  there  had  been  no  more  time  consumed  in  giving 
the  notice  than  the  law  would  have  allowed  if  each  party  had 
mailed  the  notice  on  the  next  day.  The  over  diligence  of  one 
will  not  supply  the  want  of  diligence  in  another.  5 

1  Clode  v.  Bayley,  12  Mees.  and  Welsh.,  51.  A  bill  of  exchange  was  Indorsed 
to  a  branch  of  the  National  Provincial  Bank  of  England,  at  Port  Madoc,  who 
sent  it  to  the  Pwllheli  branch  of  the  same  bank,  who  indorsed  it  to  the  head 
establishment  in  London.  Held  that  each  of  the  branch  establishments  wer« 
to  be  considered  as  independent  indorsers,  and  each  entitled  to  the  usual 
notice  of  dishonor. 

1  Dabree  v.  Eastwood,  8  Carr.  and  P.,  260;  9  Peter*,  88. 

»  Lenox  v.  Roberts.  2  Wheat.,  877. 

4  Morgan  v.  Woodworth,  8  John.  Gas.,  89;  Bank  of  Utlca  T.  Smith,  18 
John.  R.,  230;  2  Hill  R.,  461. 

•  Manchester  Bank  T.  Fellows,  8  Foster  N.  H.,  802;  Turner  T.  Leach. 
4  Barn,  and  Aid.,  461;  Brown  v.  Ferguson,  4  Leigh,  87,  60;  Simpson 
v.  Turney,  6  Humphreys,  469;  8  Porter,  268;  Rowe  T.  Tipper,  20  Eng.  Law 
and  Eq.  R.,  220.  Green,  on  the  12th  of  July,  1861,  drew  his  bill  of 
exchange  on  Knight  &  Co.,  payable  to  his  own  order  four  months  after 
date,  for  value  received.  Green  indorsed  the  bill  to  the  defendant,  and 


624  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

Where  a  bill  of  exchange  passed  through  the  hands  of  five 
persons,  all  of  whom  resided  in  London  or  the  neighborhood, 
and  the  bill  being  dishonored  when  it  fell  due,  the  holder  gave 
notice  on  the  same  day  to  the  fifth  indorser,  and  he  on  the 
next  day  to  the  fourth,  and  he  on  the  next  day  to  the  third, 
and  he  on  the  next  day  to  the  second,  and  he  on  the  same  day 
to  the  first,  the  court  were  of  opinion  that  due  diligence  had 
been  used;  i  indeed,  the  first  and  last  of  the  notices  were 
given  a  day  sooner  than  was  requisite.  There  being,  as  in  this 
case,  a  succession  of  notices  between  the  holder  and  the 
drawer  of  the  bill,  want  of  diligence  in  either  of  the  parties 
breaks  the  chain  of  notice  and  discharges  the  prior  parties; 
for  no  recovery  can  be  had  thereon  against  an  indorser  or 
drawer  who  has  not  been  duly  notified.  2 

In  respect  to  foreign  bills,  the  safest  course  is  to  send  the 
notice  of  dishonor  to  a  drawer  or  indorser  abroad  by  the  next 
regular  mail,  if  there  be  an  established  communication  by 
mail ;  3  and  if  not,  it  should  be  sent  by  the  earliest  ordinary 
conveyance.  4  And  as  the  object  of  the  law  is  to  communi- 
cate the  earliest  intelligence  of  the  dishonor,  the  holder  need 
not  send  the  notice  by  the  very  next  sailing  vessel  that  leaves 

1  Hilton  v.  Shepherd,  6  East  14;  1  Hill  263. 

"Smith  v.  Mullett,  2  Campb.  208;  9  East  347;  Turner  v.  Leach,  4  Barn,  and 
Aid.  451;  Rowe  v.  Tippen,  supra. 

3Leftly  v.  Mills,  4  Term  R.,  174;  Coleman  v,  Sager,  2  Stra.  829. 

4  Muilman  v.  D'Eguino,  2  Hen.  Bla.  565j  Williams  v.  Smith,  2  Bar.  and 
Aid.  496. 


the  defendant  then  indorsed  it  to  Abley,  and  Abley  then  indorsed  it  to 
the  plaintiff.  And  on  the  question  of  notice,  the  proof  was  that  the  bill 
was  dishonored  for  non-payment  on  Saturday  the  15th  of  November; 
that  on  Monday,  the  17th,  the  plaintiff  gave  due  notice  of  dishonor  to  Abley; 
that  Abley  gave  no  notice  to  the  defendant,  but  that  the  plaintiff  on  the  18th 
gave  notice  to  the  defendant;  and  it  was  held  that  the  notice  was  too  late. 
The  plaintiff,  when  he  relies  upon  his  own  notice,  must  shew  that  it  was  given 
in  the  usual  time.  Harrison  v.  Ruscoe,  15  Mee.  and  W.,  231. 

Where  a  party  does  not  know  the  address  of  the  drawer  of  a  bill,  and 
writes  immediately  to  another  party  to  the  bill  to  ascertain  it  and  gives  the 
notice  as  soon  as  he  receives  the  information,  this  is  evidence  of  due  diligence. 
Dixon  v.  Johnson,  29  Eng.  Law  and  Eq.  R.,  504,  decided  in  1855. 


PROCEEDINGS   ON    NON-PAYMENT,  NOTICE.  625 

the  port,  if  there  be  a  steamer  to  leave  shortly  after,  which 
carries  the  mail  and  is  certain  to  arrive  the  soonest,  i 

Where  there  is  no  dispute  about  the  facts,  or  where  the 
facts  are  all  ascertained,  what  is  reasonable  diligence  in  giving 

'Stainback  v.  The  Bank  of  Virginia.  11  Grattan  R.,  260.  The  bill  in  this 
case,  drawn  in  Petersburgh,  Virginia,  on  a  house  in  London.  was  protested  for 
non-acceptance  on  the  5th  of  April,  1843.  The  next  Cunard  steamer  left  Liv- 
erpool for  the  United  States  on  the  19th  of  that  mouth,  and  there  were  packet* 
leaving  London  or  Liverpool  on  the  7th,  10th  and  l"th  of  April;  but  the  notice 
of  dishonor  was  sent  by  the  steamer  to  the  indorser  in  Virginia. 

The  question  arising  upon  these  facts  was  whether  the  notice  of  dishonor  was 
duly  forwarded  so  as  to  charge  him.  Samuels  J.,  "  The  law  requires  notice 
of  dishonor  of  commercial  paper  to  be  transmitted  to  the  parties  thereto  for 
the  purpose  of  enabling  them  to  do  what  is  needful  to  protect  their  interests; 
to  this  end  it  may  be  important  to  have  early  notice,  and  the  law  requires  it  to 
be  given.  In  the  case  before  us  the  notice  was  sent  in  a  mode  which  would 
bring  it  to  the  hands  of  the  plaintiff  in  error  at  the  earliest  practicable  day: 
yet  it  is  alleged  that  it  should  have  been  sent  by  another  mode,  which,  although 
it  might  have  commenced  the  transmission  at  an  earlier  day,  yet  would  nut 
have  delivered  it  so  soon  as  the  mode  adopted.  If  we  could  yield  to  the  argu- 
ment of  the  plaintiff's  counsel,  we  should  sacrifice  the  object  of  the  law.  The 
notice  was  transmitted  in  the  mail  by  an  ocean  steamer  belonging  to  the  Cunard 
line,  which  line  carried  the  mail  from  Great  Britain  to  the  United  States.  It 
was  sent  by  the  first  steamer  which  started  after  the  bill  was  dishonored.  This 
brings  the  case  within  the  stringent  rule  requiring  that  the  notice  be  sent 
by  the  first  mail.  It  appears,  however  that  there  are  regular  lines  of  sailing 
packets  from  London  (the  place  of  the  drawee's  residence)  to  the  United 
States;  that  these  packets  carried  letter-bags  made  up  at  the  London  post 
office,  *nd  that  the  times  for  their  sailing  from  Great  Britain  occurred  between 
the  day  of  the  dishonor  of  this  bill  and  the  day  of  the  steamer's  leaving.  It 
further  appears  that  although  a  sailing  packet  should  leave  on  the  regular  day 
for  her  departure,  the  steamer  would  probably  arrive  first  in  the  United  States. 
It  further  appears  that  the  line  of  mail  steamers  is  used  by  a  very  large  majo- 
rity of  business  men  for  the  transmission  of  letters  from  Great  Britain  to  the 
United  States.  There  can  be  no  question  that  of  the  two  modes  of  transmis- 
sion, the  proper  one  was  adoptad.  This  one  has  in  its  favor  the  facts  that  it 
carries  the  mail,  that  it  is  the  ordinary  mode  of  transmission,  and  that  it  may 
be  expected  to  deliver  a  letter  at  an  earlier  day  than  the  other;  that  other 
having  in  its  favor  the  facts  that  it  starts  at  an  earlier  day,  and  carries  a  letter 
bag.  There  is  nothing  to  counterbalance  the  fact  that  the  other  line  will  deliver 
the  letter  at  the  earliest  day."  Judgment  affirmed  April,  1864,  in  Virgin!* 
Court  of  Appeals. 

In  an  earlier  case,  it  is  held  that  where  a  bill  drawn  in  thu  country  ot 
is  dishonored,  the  notice  must  be  transmitted  by  the  first  ship  bound  for  any 
port  in  the  United  States;  that  the  holder  is  not  at  lib  rty  to  wait  for  a  vea 
bound  for  the  port  where  the  drawer  or  indorser  resides.    Fleming  T.  McClure, 
1  Brevard,  428. 


626  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

notice  is,  as  we  have  said,  a  question  of  law;  i  this  results 
f  i'om  the  necessity  of  having  some  fixed  legal  standard,  by 
which  men  may  not  only  know  the  law,  but  be  protected  by  it. 

By  whom  should  the  notice  be  given  ? 

We  begin  by  saying  that  notice  from  a  mere  stranger  is  not 
sufficient  to  charge  the  drawer  or  indorser;  for  the  object  of 
the  notice  is  to  convert  a  conditional  into  an  absolute  contract 
or  liability,  and  the  law  will  not  permit  the  impertinent  inter- 
medling  of  a  third  person  to  have  that  effect.  2 

The  notice  required  by  law  is  something  more  than  mere 
knowledge  of  the  dishonor,  communicated  to  the  drawer  or 
indorser;  it  is  an  act  to  be  performed  by  the  holder  or  his 
agent,  or  by  some  person  who  is  a  party  to  the  bill  or  note,  or 
who  would,  on  the  same  being  returned  to  him,  and  after  pay- 
ing it,  be  entitled  to  call  for  payment  or  reimbursement.  3  It 
is  sufficient,  when  it  comes  from  the  holder,  to  charge  all  the 
parties;  because  he  has  the  right  to  look  to  them  all  for  pay- 
ment, provided  he  gives  to  the  drawer  and  indorsers  seasonable 
notice  of  his  intention  to  do  so.  And  a  notice  from  the  holder 
to  all  the  parties  enures  to  the  benefit  of  each  party  who  stands 
behind  him  on  the  paper :  thus,  if  the  holder  gives  due  notice 
to  the  first  and  second  indorser  of  a  promissory  note,  the 
second  is  entitled  to  recover  thereon  against  the  first  indorser 

1  Bank  of  TJtica  v  Bender,  21  Wend.,  643  •  Bryden  v.  Bryden,  11  John.  R., 
187;  Davis  v.  Herrick,  6  Ohio,  66;  1  Peters.  378;  Dodge  v.  Bank  of  Kentucky, 
2  Marsh.  616;  7  Serg.  and  Rawle.  323;  Whitwell  v.  Johnson,  17  Mass.,  453. 

a  Chanoine  v.  Fowler,  3  Wend.,  173;  Bachellor  v.  Priest,  12  Pick.,  406; 
Tindal  v.  Brown,  1  Term  R.,  167. 

3  Bayley  on  Bills,  ch.  7,  §  2;  Cowperthwaite  v.  Sheffield,  1  Sand.  R.,  416. 
The  court  adopts  in  this  case  the  rule  as  laid  down  by  Mr.  Justice  Story,  on 
Bills,  §  304.  "We  have  said  that,  in  general,  the  notice  must  come  from  the 
holder  of  the  bill  or  his  agent,  and  not  from  a  mere  stranger.  There  is,  how- 
ever, a  qualification  introduced  into  the  rule  by  the  modern  authorities.  It  is 
this,  that  the  notice  will  be  sufficient,  although  not  given  by  the  holder  or  his 
agent,  if  it  comes  from  some  person  who  holds  the  bill  when  it  is  dishonored, 
or  who  is  a  party  to  the  bill,  or  who  would  on  the  same  being  returned  to  him, 
and  after  paying  it,  be  entitled  to  require  reimbursement  thereof;  for,  under 
such  circumstances,  the  notice  will,  in  general,  enure  to  the  benefit  of  all  the 
other  parties  to  the  bill,  whether  they  are  antecedent  or  subsequent  parties 
thereon  to  the  party  who  gives  the  notice." 


PROCEEDINGS   ON   NON-PAYMENT,  NOTICE.  627 

on  shewing  that  such  notice  of  dishonor  was  duly  given,  i  So, 
if  the  holder  gives  notice  to  his  immediate  indorser,  and  he  to 
his  indorser,  and  the  notice  is  in  this  manner  carried  back  to 
the  drawer  of  a  bill,  the  holder  is  entitled  to  bring  an  action 
thereon  against  either  of  the  parties  that  have  been  duly 
notified.  2  But  if  either  of  the  parties  fails  to  give  due  notice 
to  his  indorser,  the  holder  cannot  have  recourse  to  the  prior 
parties  who  have  not  been  seasonably  notified  of  the  dishonor.  3 
It  follows  from  what  has  been  said  that  the  notice  need  not 
necessarily  come  from  a  party  who  has  the  title  to  or  right  of 
property  in  the  bill  or  note,  for  if  that  were  so,  each  indorser 
would  be  compelled  to  take  up  the  paper  before  he  could  give 
notice;  and  this  would  be  wholly  impracticable  if  the  indor- 
sers  resided,  as  they  frequently  do,  at  places  distant  from  each 
other.  4  But  the  holder  is  not  bound  to  give  notice  to  any  one 
but  his  immediate  indorser;  and  hence  the  rule  which  was 
formerly  asserted,  namely,  that  the  notice  must  come  from  the 
holder,  is  no  longer  recognized  as  good  law.  "  If  it  were,  the 
holder  might  secure  his  own  right  against  his  immediate  indor- 

1  Stafford  v.  Yates,  18  John.  R.,  327.  The  same  rule  applies  in  all  cases 
where  the  holder  has  given  notice;  either  iudorser  may  recover  on  shewing 
such  notice  to  have  been  duly  given. 

*  Jameson  v.  Swinton,  2  Campb.,  373.     This  action  was  brought  by  the  sec- 
ond indorsee  against  the  drawer,  the  plaintiff  having  given  notice  to  his  indor- 
ser, and  he  to  the  defendant.    Lawrence  J.    "  I  do  not  remember  to  have 
heard  the  first  point  made  before;  but  I  am  of  opinion  that  the  drawer  or  in- 
dorser is  liable  to  all  subsequent  indorsees,  if  he  had  due  notice  of  the  dishonor 
of  the  bill  from  any  person  who  is  a  party  to  it.     Such  a  notice  must  senre  all 
the  purposes  for  which  the  giving  of  notice  is  required.     The  drawer  or  indor- 
ser  is  authoritatively  informed  that  the  bill  is  dishonored,  he  is  enabled  to 
take  it  up  if  he  pleases,  and  he  may  immediately  proceed  against  the  acceptor 
or  prior  indorsers.    Decided  in  1809;  2  Taunt.,  '2\\. 

1  Smith  v.  Mullett,  2  Campb.,  208. 

*  The  earlier  cases  frequently  take  it  for  granted,  that  the  notice  should 
come  from  the  holder  himself;  and  that  consequently  the  second  indorser, 
being  notified  of  the  dishonor  of  a  note,  ought  to  take  it  up  immediately  and 
give  notice  to  his  indorser.     Morgan  v.  Woodworth,  8  John.  Cas.,  89.  decided 
in  1802.    In  Stewart  v.  Kennctt,  2  Campb.,  177,  Lord  Ellenborough  intima- 
ted the  opinion  that  the  notice  must  come  from  the  person  who  can  give  the 
drawer  or  indorser  his  immediate  remedy  upon  the  bill.     (1809.)    The  case 
of  Tindal  v.  Brown,  1  Term.  R.,  167,  favors  the  same  opinion.     See  also  ex 
parte  Barclay,  7  Ves.,  597. 


{528  BILLS   OF  EXCHANGE  AND   PROMISSORY    NOTES. 

ser  by  regular  notice;  but  the  latter,  and  every  other  party 
to  the  bill,  would  be  deprived  of  all  remedy  against  anterior 
indorsers  and  drawer,  unless  each  of  these  parties  should,  in 
succession,  take  up  the  bill  immediately  on  receiving  notice  of 
dishonor,  a  supposition  which  cannot  be  reasonably  made."  i 

It  has  been  held  in  a  recent  case  that  the  indorsees  of  bills 
of  exchange  who  have  transfered  them  to  a  bank  as  collateral 
security,  have  abundant  interest  in  the  bills  to  authorize  them 
to  give  notice  of  the  protest.  2  And  it  is  well  settled  that  a 
party  to  whom  a  note  or  bill  is  indorsed  for  collection,  that  is, 
simply  for  the  purpose  of  creating  an  agency  to  collect,  may 
give  the  notice  with  the  same  eifect  as  if  the  indorsement  had 
been  for  value.  3  And  the  rule  holds  good  where  there  is  a 
succession  of  indorsements  for  the  same  purpose^  notice  given 
from  one  to  the  other,  as  in  the  case  of  ordinary  indorsers,  is 
held  to  have  been  given  according  to  established  commercial 
usage.  4 

Possession  of  a  bill  or  note  by  a  notary  is  evidence  of  a 
right  to  protest  it;  and  when  a  notice  signed  by  a  notary 
public,  is  duly  given,  it  is  presumed  to  be  done  by  the 
authority  of  the  holder;  5  and  the  notice  will  be  sufficient  if 
his  name  be  affixed  to  it  by  a  clerk  authorized  by  him  to 
-serve  notices.  6 

An  indorser  who  has  been  discharged  by  the  laches  of  the 
holder  or  subsequent  parties,  cannot  afterwards  take  up  the 
note  or  bill  and  give  notice  so  as  to  charge  prior  parties; 
because  all  of  them  are  discharged  by  the  same  want  of  dili- 

1  Chapman  v,  Keane,  3  Ad.  and  Ellis,  193,  overruling  Tindal  v.  Brown,  in 
the  particular  referred  to.     The  sentence  quoted  is  from  the  opinion  delivered 
by  Lord  Denman;  decision  made  in  1835, 

2  Cowperthwaite  v.  Sheffield,  1  Sand.  R.,  447;  S.  C.,  3  Comst.  R.,  243. 

8  Howard  v.  Ives,  1  Hill  R.,  263;  Bank  of  the  United  States  v.  Davis,  2 
Hill  R.,  451. 

*Idem;  Mead  v.  Engs,  5  Cowen  R.,  503;  Freeman's  Bank  v.  Perkins,  6 
Shepley,  293;  Warren  v.  Oilman,  5  id.  360;  Crawford  v.  Branch  Bank,  7 
Ala.,  203;  Eagle  Bank  v.  Hathaway,  5Metcalf,  212. 

6  Warren  v.  Gilman,  17  Maine  R.,  (5  Shep.,)  360;  Bank  of  Utica  v.  Smith, 
18  John.  R.,  230. 

•  1  Sand.  R.,  416. 


PROCEEDINGS   ON    NON-PAYMENT,  NOTICE,  »'>J'J 

gence.  i  And  it  has  been  held  that  a  notice  given  by  the  first 
indorser  to  the  drawer  of  a  bill  is  not  available  as  between 
the  second  indorser  and  the  drawer,  where  the  first  indorser 
has  not  been  charged  with  notice;  on  the  ground  that  he  was 
not  obliged  to  take  up  the  bill.  2  On  the  other  hand,  rt  is  laid 
down  in  broad  terms  "  as  universally  true,  that  a  party  enti- 
tled as  holder  to  sue  upon  a  bill,  may  avail  himself  of  the 
notice  given  in  due  time  by  any  other  party  to  it,  against  any 
other  person  upon  the  bill,  who  would  be  liable  to  him,  if  he, 
the  holder,  had  himself  given  him  due  notice  of  the  dishonor ."3 
It  is,  says  Lord  Denman,  universally  considered  that  the  party 
entitled  as  holder  to  sue  upon  the  bill  may  avail  himself  of 
notice  "given  in  due  time  by  any  party  to  it.  4 

A  notice  given  by  a  party  in  possession  of  the  bill,  as 
banker,  attorney  or  agent,  is  sufficient,  though  given  in  his 
own  name;  5  but  a  notice  of  dishonor,  sent  by  mail  to  an 
indorser,  not  signed  by  any  one,  is  not  sufficient.  6 

Where  the  holder  is  not  satisfied  with  the  responsibility  of 
his  immediate  indorser,  his  only  safe  course  is  to  give  notice 
to  all  the  parties;  and  as  he  is  only  bound  to  give  notice  to 
the  party  indorsing  the  bill  or  note  to  him,  it  is  prudent  in 
each  party  who  receives  notice,  to  give  prompt  notice  to  those 
who  stand  behind  him  on  the  paper;  for  the  holder  may  have 
omitted  to  notify  them,  and  it  may  be  inconvenient  to  prove 
that  due  notice  has  been  given  by  him.  7  Of  course  the  notice 
should  be  served  or  mailed  by  a  person  who  will  be  a  compe- 
tent witness  to  prove  the  fact. 

1  Turner  v.  Leach,  4  Bam.  and  Aid.,  451. 

*  Ex  parte  Barclay,  7  Ves..  697.    It  is  questionable  whether  this  be  not 
overruled  by  subsequent  authorities ;  the  party  himself  being  duly  notified,  is 
not  injured  by  the  laches  that  might  have  been  a  good  defence  in  an  action 
brought  by  the  second  against  the  first  indorser. 

*  Story  on  Bills,  §  304. 

4  Chapman  v.  Keane,  3  Ad.  and  Ellis,  198. 

6  Idem;  Woodthorpe  v.  Lawes,  2  Mees.  and  W.,  109;  6  Shepley,  292. 

*  Walker  v.  State  Bank,  8  Missouri,  704. 
'  Bayley  on  Bills,  ch.  7,  §  2. 


630  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

To  whom  should  notice  be  given  ? 

In  order  to  charge  them,  we  have  seen  that  it  is  necessary 
to  give  notice  of  non-payment  to  the  drawer  and  indorsers  of 
notes  and  bills.  In  respect  to  the  drawer,  there  is  a  class  of 
cases,  to  be  presently  considered,  in  which  he  is  not  entitled 
to  notice,  on  the  ground  that  he  had  no  effects  in  the  hands  of 
the  drawee  and  no  right  to  expect  that  his  draft  would  be 
honored,  i  But  in  general,  the  indorser  has  nothing  to  do 
with  the  accounts  between  the  drawer  and  the  drawee,  and  is 
therefore  entitled  to  notice  of  dishonor,  without  regard  to  the 
particular  relation  existing  between  them.  2 

A  person  who  indorses  an  absolute  guaranty  of  payment 
on  the  back  of  a  negotiable  promissory  note,  is  not  entitled  to 
notice  of  dishonor.  3  And  it  is  well  settled  that  one  who 
transfers  a  bill  without  indorsement,  is  not  by  the  law  mer- 
chant entitled  to  notice;  as  where  a  draft  is  delivered  by  a 
debtor  to  his  creditor  on  account  of  the  indebtedness.  4  A 
guaranty  of  payment  is  a  contract  quite  different  from  that 
which  is  implied  by  the  act  of  indorsing  a  negotiable  note  or 
bill :  it  is  an  unconditional  undertaking  that  the  note  or  bill 
shall  be  paid.  5  And  where  a  person  transfers  a  note  of  a 
third  person  payable  to  bearer  without  indorsing  it,  to  his 
creditor;  the  same  not  being  received  in  payment  and  dis- 
charge of  his  debt,  all  that  he  can  reasonably  demand  is  that 
the  parties  liable  thereon  be  duly  charged.  6 

When  a  note  is  made  payable  to  the  order  of  two  or  more 
persons  who  are  not  partners,  and  indorsed  by  them,  the 
notice  of  dishonor  must  be  given  to  each ;  and  if  one  of  them 
die  before  the  note  falls  due,  the  holder  must  be  careful  to 

1 1  Denio  R.,  367;  2  Ala.,  368;  21  Pick.,  327. 

a  Barton  v.  Baker.  1  Serg.  and  Rawle,  334;  7  Mass.,  452. 

3  Hough  v.  Gray,  19  "Wend.,  202;  see  also  Dean  v.  Hall,  17  Wend.  R.,  214; 
and  cases  there  cited. 

4  Van  Wart  v.  Smith,  1  "Wend.,  219;  Van  Wart  v.  "Woolley,  2  B.  and  C., 
445. 

5  20  John.  R.,  365;  5  "Wend.,  307;  Brown  v.  Curtiss,  2  Comst.,  225. 

'  Jones  v  .Savage,  6  Wend.,  658;  5  John.  R.,  68;  Dayton  v.  Trull,  23  Wend., 
345.  The  guarantor  stands  in  the  light  of  a  surety,  and  may  be  discharged  by 
the  negligence  of  the  holder  Reynolds  T.  Douglass,  12  Peters,  497. 


PROCEEDINGS   ON    NON-PAYMENT,  NOTICE.  631 

charge  the  estate  of  the  deceased  indorser,  or  else  he  will  not 
be  entitled  to  recover  thereon  against  the  other,  i  In  the 
case  of  a  partnership  the  interest  is  not  only  joint,  but  each 
member  is  a  general  agent  of  the  concern;  and  hence  notice 
to  one  is  notice  to  all.  2 

If  an  indorser  be  dead,  at  the  maturity  of  a  note,  and  there 
be  executors  or  administrators  at  that  time  known  to  the 
holder,  notice  must  be  given  to  them;  for  they  represent  the 
testator  or  intestate  and  are  as  fully  entitled  to  notice  as  he 
would  be,  if  alive.  But  where  the  death  of  the  indorser  is 
not  known,  as  where  he  dies  at  sea  and  the  news  of  his  death 
does  not  reach  the  holder  until  some  time  after  the  note  has 
fallen  due,  it  is  sufficient  to  leave  the  notice  for  him  at  his 
residence  or  dwelling  house.  3  So  when  the  holder  knows  the 
indorser  to  be  dead,  but  does  not  know  that  he  left  a  will,  or 
whether  any  administrators  have  yet  been  appointed  or  not, 
the  notice  may  be  served  by  leaving  it  at  his  late  residence 
for  his  executors  or  administrators;  4  and  in  cases  where  the 
service  may  be  made  by  mail,  it  is  sufficient  to  address  the 
notice  to  the  executor  or  administrator  of  the  deceased,  or  to 
the  indorser.  5 

Where  a  note  or  bill  is  indorsed  by  a  firm,  and  one  of  the 
members  of  it  dies  before  it  falls  due,  it  is  sufficient  to  give 
notice  of  dishonor  to  the  surviving  partner;  for  the  survivor 
represents  the  firm,  and  is  legally  answerable  as  such  for  its 
debts.  6  And  though  the  partnership  has  been  dissolved  by 
mutual  consent,  notice  to  one  of  the  members,  if  given  before 

1  Willis  v.  Green,  5  Hill  R.,  282;  1  Conn.  R.,  867. 

1  Idem;  and  Bank  of  Chenango  v.  Root,  4  Cowen  R.,  126;  4  S.  and  M.,  749. 

*  Merchant's  Bank  v.  Birch,  17  John.  R.,  26;  Stewarts  v.  The  Executors  of 
Eden,  2  Caine's  Rep.,  121. 

4  Cayuga  Co.  Bank  v.  Bennett,  6  Hill  R.,  236. 

•Barnes  v.  Reynolds,  4  How.  (Miss.,)  114;  Dabney  v.  Stidger,  4  Smedes 
and  M.,  749;  Planter's  Bank  v.  White,  2  Humph..  112.  Notice  addressed  to 
the  "  legal  representative  "  of  the  deceased  indorser,  to  the  place  of  his  last 
residence,  is  good;  Pillow  v.  Hardeman,  3  Humph.,  638;  the  holder  not  know- 
ing the  name  of  the  representative. 

6  Cooke  v.  Bank  of  Tennessee,  9  Humph.,  51 ;  Dabney  v.  Stidger,  4  Smedes 
and  Marsh,  749;  6  Hill  R.,  232;  Goelet  v.  McKinstrey,  1  John.  Cas.,  405;  2 
id.  374;  Grant  v.  Shurter,  1  Wend.,  148. 


632  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

the  fact  of  dissolution  has  been  made  public,  is  notice  to  all;  i 
for  the  partnership  still  subsists  for  the  purpose  of  winding 
up  the  business  and  closing  the  concern,  2  and  each  may  be 
understood  to  act  as  the  agent  of  the  rest  until  notice  of  the 
dissolution  has  been  made  public.  3  On  the  same  principle, 
notice  to  a  general  agent,  or  to  an  agent  who  has  authority  in 
the  premises,  will  be  the  same  as  notice  to  his  principal.  4 

As  a  general  rule,  the  failure  to  give  the  drawer  or  indorser 
due  notice  of  non-payment,  discharges  him.  The  presumption 
of  law  is  that  he  is  injured  by  the  want  of  notice;  5  that  the 
drawer  is  deprived  of  the  opportunity  which  he  ought  to  have 
had  to  withdraw  immediately  his  effects  from  the  hands  of  the 
drawee;  6  and  that  the  indorser  is  prevented  from  taking 
prompt  measures  to  obtain  and  enforce  payment  of  the  note 
or  bill.  7  And  this  presumption  is  so  strong  and  uniform  as 
to  exclude  proof  that  the  drawer  has  not  been  injured,  in  all 
cases  except  those  in  which  the  evidence  is  offered  to  bring 
the  case  within  one  of  the  recognized  exceptions  to  the  gen- 
eral rule.  8 

We  are  in  the  next  place  to  consider  some  exceptions  to  the 
general  rule,  or  what  will  excuse  the  omission  to  give  due 
notice  of  dishonor. 

1  Nott  v.  Downing.  6  Lewis,  684. 

a  Murray  v.  Mumford,  6  Cowen,  441. 

3  Byles  on  Bills,  37-39,  A  dissolution  of  the  partnership  cannot  retroact 
upon  the  contract  of  indorsement;  and  under  that  a  notice  to  one  of  the 
firm  is  notice  to  all.  Is  not  notice  to  one  of  them  after  the  dissolution  good 
notice  to  all,  notwithstanding  the  holder  knows  of  the  dissolution?  It  has 
been  held  that  it  is.  Coster,  Rohinson  &  Co.  v.  Thomason,  use  &c.,  19  Ala., 
new  series,  717.  When  a  bill  indorsed  by  a  partnership  is  dishonored  after 
dissolution  of  the  firm,  notice  of  protest  to  any  one  of  the  late  partners  is  suf- 
ficient to  bind  all.  Decided  in  1851. 

Brown  v.  Turner,  15  Ala.,  New  Series  R.,  832.  "When  a  firm  having  ac- 
cepted a  bill  dissolve  partnership  before  it  becomes  due,  it  is  enough  to  de- 
mand payment  of  one  of  them,  or  of  his  agent,  where  they  are  both  absent. 
Decided  in  1849. 

*  Incorporated  companies  can  only  act  through  their  agents,  and  where  they 
are  entitled  to  notice,  it  is  well  served  upon  their  known  and  recognized  agents. 

6  Chitty  on  Bills,  435;  Whitfield  v.  Savage,  2  Bos.  and  Pull.,  280. 

6  Commercial  Bank  v.  Hughes,  17  Wend.,  94. 

7  Phillips  v.  Thompson,  2  John.  Ch.  R.,  418. 

8  Dennis  v.  Morris,  3  Esp.  R.,  158.    See  Commercial  Bank  v.  Hughes,  supra 


PBOCEEDIXGS    ON    NON-PAYMENT,   NOTICE.  633 

An  agreement  made  by  the  drawer  or  indorser,  before  dis- 
honor, waiving  notice  of  non-payment  or  waiving  the  protest 
of  a  bill  or  note,  will  render  him  liable  thereon  just  the  same 
as  if  due  notice  had  been  given,  i  And  any  conduct  on  the 
part  of  the  drawer  or  indorser,  calculated  to  and  actually  indu- 
cing the  holder  to  omit  serving  him  with  a  regular  notice,  will 
have  the  same  effect.  Thus,  where  it  was  proved  that  a  few 
days  before  the  bill  became  due  the  drawer  called  at  the 
counting  house  of  the  holder,  and  being  asked  the  place  of  his 
residence,  replied  that  he  had  no  regular  residence,  that  he 
was  living  among  his  friends,  and  would  call  and  see  if  the 
bill  was  paid  by  the  acceptor;  this  was  held  to  dispense  with 
notice,  and  throw  upon  the  drawer  the  duty  of  inquiring 
whether  the  bill  was  met  at  maturity.  2  So,  where  the  indor- 
ser of  a  note  called  upon  the  holder  just  before  it  became 
due,  and  informed  him  that  the  maker  had  absconded,  and 
said  that  being  indemnified  for  his  responsibility  he  would 
give  a  new  note  for  the  amount,  which  was  assented  to,  and 
during  the  negotiation  between  them  the  note  fell  due;  it  was 
held  that  the  pending  negotiation  superseded  the  necessity  of 
a  demand  of  payment  and  of  notice.  3  So,  where  the  indorser 
negotiates  for  time  a  few  days  before  the  note  falls  due,  and 
offers  to  give  his  own  note  for  the  amount,  and  promises  uncon- 
ditionally that  the  note  indorsed  by  him  shall  be  paid,  telling 
the  holder  to  give  himself  no  uneasiness  about  it,  the  indorser 
will  not  be  permitted  to  insist  upon  the  want  of  demand 
and  notice.  4 

Where  the  omission  to  give  notice  is  fairly  attributable  to 
the  interference  of  the  indorser;  as  where  he  writes  a  letter 
to  the  holders  just  before  the  note  falls  due,  advising  them 
that  it  will  not  be  met  at  maturity  by  the  makers,  and  that 
he  has  taken  security  from  the  first  indorser,  and  concludes 
by  requesting  indulgence;  he  is  not  allowed  to  take  advantage 

1  Codington  T.  Davis,  1  Comst.  R.,  186. 
*  Phipson  v.  Kneller,  4  Campb..  285. 

'Leffingwell  &.  Pierpoint  v.  White,  1  John.  Cas.,  99;  Lary  T.  Young,  8 
Eng.,  (13  Ark.,)  401. 

4  Leonard  T.  Gary,  10  Wend.,  504;  Bruce  T.  Lytle,  13  Barb.  R.,  163. 

38 


634  BILLS  "OF   EXCHANGE  AND   PROMISSORY  NOTES. 

of  the  omission,  i  But  a  promise  made  by  an  indorser  on  the 
day  the  note  falls  due  to  indorse  a  renewal  note,  which  does 
not  induce  the  holder  to  omit  giving  him  due  notice,  does  not 
preclude  the  indorser  from  insisting  upon  the  want  of  demand 
and  notice;  as  where  the  maker  being  absent,  the  last  indor- 
ser called  at  the  bank  by  which  the  note  was  held  on  the  day 
it  become  due,  and  observing  that  the  note  had  "  come  round,'7 
proposed  that  it  should  be  renewed  for  a  part  of  the  amount 
on  the  return  of  the  maker,  and  the  note  was  not  protested  in 
consequence  of  a  mistake  of  the  clerk  in  regard  to  the  day 
when  it  fell  due.  2  In  a  word,  the  indorser  may  waive  the 
condition  of  his  liability;  but  it  must  be  done  understand - 
ingly,  or  his  acts  must  be  such  as  fairly  to  mislead  the  holder 
by  inducing  him  to  believe  that  such  waiver  is  intended. 

A  waiver  of  notice  or  of  protest,  made  in  express  terms  by 
a  drawer  or  indorser,  is  to  be  read  like  any  other  instrument; 
and  its  terms  are  to  be  construed  so  as  to  give  effect  to  the 
intention  of  the  parties,  as  expressed  in  the  language  used. 
A  stipulation  by  the  indorser  of  a  note  to  waive  notice  of  dis- 
honor, dispenses  with  the  necessity  of  giving  him  notice,  but 
does  not  dispense  with  the  demand  itself.  The  two  acts  are 
perfectly  distinct,  and  each  is  a  condition  precedent  to  the 
holder's  right  of  recovery.  3  But  where  the  indorser  of  a  note 
requests  the  holders  not  to  protest  it,  and  waives  the  necessity 
of  protest  thereof,  it  has  been  adjudged  that  this  is  a  waiver 
of  both  demand  and  notice;  on  the  ground  that  the  term 
protest  when  used  among  men  of  business  includes  all  those 
acts  which  are  by  law  necessary  to  charge  an  indorser.  4 

A  waiver  of  demand  or  notice,  made  by  the  drawer  or 
indorser,  is  not  a  new  contract — it  is  only  a  waiver  of  one  of 
the  conditions  precedent  to  his  liability,  and  does  not  there- 

1  Spencer  v.  Harvey,  17  Wend.,  489. 

a  Cayuga  Co.  Bank  v.  Dill,  5  Hill  R.,  403;  Prideaux  v.  Collier,  2  Stark.  R., 
67.  The  discharge  of  prior  indorsers  works  a  serious  prejudice  to  the  last 
indorser;  and  it  cannot  be  supposed  that  he  intended  to  waive  a  demand 
which  was  one  of  the  steps  necessary  to  charge  them. 

3  Backus  v.  Shipherd,  11  "Wend.,  629;  6  Mass.  R.,  524. 

4  3  Denio  R.,  16;  1  Comst.  R.}  186;  Union  Bank  v.  Hyde,  6  Wheat.,  572. 


PROCEEDINGS   ON    NON-PAYMENT,   NOTICE.  635 

fore  require  any  consideration  to  support  it.  i  A  verbal  or 
written  communication  to  the  holder,  dispensing  with  the 
necessity  of  demand  or  notice,  will  be  sufficient.  2  And  it  has 
been  held  competent  for  the  holder  to  prove  by  parol  testi- 
mony an  agreement  made  at  the  time  the  note  was  signed  and 
indorsed,  that  payment  was  not  to  be  demanded  at  maturity, 
by  way  of  showing  a  waiver  of  demand  and  notice.  3  An 
agreement  made  by  the  payee  and  indorser  with  the  maker  of 
a  note,  to  pay  and  take  it  up  amounts  to  the  same  thing,  and 
enures  to  the  benefit  of  his  indorsee. 

Where  the  indorser  writes  a  waiver  of  demand  and  notice 
over  his  signature  on  the  note,  his  contract  becomes  absolute; 
he  is  bound  to  pay  the  note,  as  unconditionally  as  if  he  had 
signed  it  as  maker.  5  More  accurately  speaking,  it  puts  him 

1  Barclay  v.  Wearer,  19  Penn.  State  R.,  396,  decided  in  1852. 

*  Jones  v.  Fales.  4  Mass.  R.,  245.     It  is  competent  for  the  indorser  to  waive 
the  condition  implied  by  law  for  his  benefit ;  and  where  he  knows  the  general 
nsage  of  the  banks,  in  making  demand  and  giving  notice  at  the  place  where 
the  note  is  made,  indorsed  and  payable,  he  is  presumed  to  have  waived  a 
formal  demand  and  notice,  or  to  have  consented  to  be  bound  by  the  usage. 
Widgery  v.  Munro     6  Mass.,  449;  9  id.  159. 

Drinkwater  v.  Tibbetts,  5  Shep.,  (17  Maine)  R.,  16.  The  defendant  in  this 
case  indorsed  the  note  as  follows:  "  Holden  without  notice.  Joshua  Tibbetts.''' 
And  this  was  held  a  sufficient  waiver  of  notice,  and  the  plaintiff  was  allowed 
to  prove  by  parol  a  waiver  of  legal  demand  of  payment. 

Barton  v.  Baker,  1  Serg.  and  Rawle,  334.  The  fact  that  the  person  indor- 
sing a  promissory  note  knows  the  maker  to  be  insolvent,  does  not  dispense 
with  the  necessity  of  giving  him  notice  of  non-payment,  it  is  not  a  waiver  of 
notice.  But  if  the  indorser  takes  from  the  maker  a  general  assignment  of  his 
estate  and  effects,  notice  is  not  necessary. 

Taunton  Bank  v.  Richardson,  5  Pick.,  436.  Where  the  indorser  of  a  note 
promises  to  take  care  of  the  note  when  it  comes  due,  and  directs  the  cashier 
of  the  note  to  send  the  usual  notice  given  to  the  maker  to  him,  which  is  done 
accordingly,  it  has  been  held  that  this  is  a  waiver  of  regular  demand  and 
notice.  So  held  in  Massachusetts,  where  the  custom  substitutes  a  notice  to 
the  maker  to  call  and  pay  the  note  at  the  bank  in  place  of  the  usual  demand 
of  payment,  6  Wheat.,  572;  1  Comst.  R.,  186. 

*  Barclay  v.  Weaver,  supra.     "  The  duty  of  demand  and  notice  is  not  a 
part  of  the  contract,  but  is  merely  a  step  in  the  remedy  which  may  be  waived 
by  the  indorser." 

4  Marshall  v.  Mitchell,  35  Maine  R.,  221;  34  id.  227. 

*  Woodman  v.  Thurston,  8  Gush.,  167. 


636  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

in  the  same  situation  as  if  the  demand  had  been  made  and 
notice  of  dishonor  given  in  due  time,  i 

A  waiyer  of  notice,  made  before  dishonor,  cannot  be  proved 
under  an  allegation  of  due  notice :  in  other  words,  the  com- 
plaint must  state  the  facts  constituting  the  cause  of  action  on 
which  the  plaintiff  seeks  to  recover.  2 

Where  the  want  of  notice  cannot  possibly  operate  to  the 
injury  of  the  drawer  or  indorser,  the  omission  to  give  it  will 
not  discharge  him.  3  Nevertheless,  we  have  seen  that  the 
holder  is  not  at  liberty  to  shew,  in  a  given  case,  that  in  point 
of  fact  the  drawer  or  indorser  has  not  suffered  by  the  laches 
of  the  holder.  4  To  allow  each  case  to  turn  upon  the  ques- 
tion of  fact,  whether  or  not  the  indorser  had  been  injured  by 
the  want  of  notice,  would  abolish  the  rule,  and  change  the 
very  nature  of  negotiable  paper.  The  law,  therefore,  which 
prescribes  the  rule,  pronounces  also  upon  the  exceptions  to 

1  Day  v.  Ridgeway,  17  Penn.  State  R.,,  303. 

"Burgh  v.  Legge,  5  Mees.  &  Wels.  418.  This  case  decides  that  an  agree- 
ment made  by  an  indorser  of  a  note  with  the  holder,  before  dishonor  and 
notice,  dispensing  with  the  notice,  must  be  alleged  specially ;  that  it  cannot 
be  proved  under  an  allegation  of  due  notice.  The  facts  were  these,  the  indor- 
ser called  on  the  holder  on  the  day  one  of  the  bills  became  payable,  and  on 
the  day  before  the  other  became  due,  and  told  him  the  bill  in  question  would 
not  be  paid,  and  that  it  was  not  worth  while  to  trouble  him  with  a  two-penny 
post  letter  to  give  him  notice,  as  it  was  not  worth  the  money,  and  he  would 
bring  the  holder  some  money  on  Monday  following,  in  part  payment  of  the 
two  bills. 

Murray  v.  King,  5  Barn.  &  Aid.  165,  was  an  action  on  a  bond  conditioned 
for  the  payment  of  a  bill  of  exchange ,  in  case  ft  should  not  be  paid  by  the 
acceptor  at  maturity;  and  it  was  held  that  in  an  action  on  the  bond,  it  was 
not  a  good  plea  that  the  bill  had  not  been  presented  for  payment,  and  that  no 
notice  of  non-payment  had  been  given  to  the  drawer. 

Bruce  v.  Lytle,  13  Barb.  R.  163.  This  was  an  action  against  the  indorser 
of  a  promissory  note,  who  had  taken  an  assignment  from  the  makers  a  short 
time  before  the  note  fell  due ;  but  the  decision  turned  on  the  express  promise 
made  by  the  defendant  the  day  before  the  third  day  of  grace,  to  come  up  and 
pay  the  note.  The  assigned  property  proving  insufficient,  the  cause  was 
decided  on  the  principle,  that  where  the  necessary  steps  to  fix  an  indorser  are 
prevented  by  some  act  of  the  latter  which  puts  the  holder  off  his  guard:  the 
holder  is  excused.  See  the  authorities  there  cited. 

3  Commercial  Bank  v.  Hughes,  17  Wend.,  94. 

*  Dennis  v.  Morrice,  3  Esp.  R.}  158. 


PROCEEDINGS  ON   NON-PAYMENT,   NOTICE.  637 

it,  and  specifies  the  classes  of  cases  in  which  notice  need  not 
be  given. 

If  the  indorser  has  taken  full  and  ample  security  against 
the  liability  incurred  by  him,  he  is  not  entitled  to  notice; 
because  he  cannot  be  prejudiced  by  the  want  of  notice,  i    So, 
where  he  has  taken  from  the  maker  an  assignment  of  all  his 
property,  real  and  personal,  he  is  not  entitled  to  notice,  for 
the  same  reason.  2    It  is  not  enough  to  show  that  the  indorser 
has  taken  security  from  the  maker,  such  as  a  mortgage  or  a 
partial  assignment,  to  indemnify  him  against  his  liability :  3  it 
must  appear  that  he  has  taken  an  adequate  security,  or  an 
assignment  of  the  whole  property  belonging  to  the  parties  to 
whom  he  has  a  right  of  recourse.  4     The  object  of  notice  is  to 
put  the  indorser  on  his  guard  and  enable  him  to  secure  his 
indemnity  from  the  maker  or  prior  indorser;  and  where  that 
has  been  fully  accomplished,  so  that  the  indorser  has  obtained 
every  thing  which  notice  was  intended  to  enable  him  to  obtain, 
he  is  liable  without  notice.  5    If  as  first  indorser  of  a  promis- 
sory note,  he  has  taken  a  general  assignment  of  all  the  prop- 
erty of  the  makers  for  the  express  purpose  of  meeting  his 
responsibilities,  the  rule  requiring   notice  does   not  apply; 
because  the  reason  of  the  rule  has  ceased  to  operate.  6 

In  the  language  of  Chief  Justice  Nelson, 7  "the  mere  pre- 

1  Corney  v.  Dacosta,  1  Esp.  R,,  302. 

*  Mechanics  Bank  of  N.  Y.  v.  Griswold,  7  "Wend.,  165;  Bond  v.  Fairham, 
5  Mass.  R.,  170;  Brown  v,  Moffey  15  East,  222;  Barton  v.  Baker,  1  Serg.  and 
Rawle,  334. 

1  Marshall  v.  Mitchell,  34  Maine  R.,  227;  Holman  v.  Wliiting,  19  Ala.,  703; 
Bruce  v.  Lytle,  13  Barb.  R.,  168. 
4  Seacord  v.  Miller,  3  Kernan  R.,  65,  decided  in  Court  of  Appeals  in  1856. 

*  Kramer  v.  Sandford,  4  Watts  and  Serg.,  328;  Lewis  v.  Kramer,  3  Md., 
265. 

*  7  Wend.,  165. 

7  Spencer  v.  Harvey,  17  "Wend.,  489.  The  note  in  this  case  was  made  by 
John  J.  Leonard  and  Russell  Austin,  for  $1700,  payable  to  the  order  of  Silas 
Austin,  one  year  after  date,  and  indorsed  by  tin-  payer  to  Charles  R.  Hanw, 
and  by  him  to  Charles  Butler,  and  by  him  to  tin-  plaintiffs;  and  it  was  shewn 
that  the  makers  and  the  first  indorser  had  confessed  a  judgment  to  Harvey 
to  indemnify  him  against  the  payment  of  the  note,  on  which  execution  had 
been  issued  and  levied  on  the  farm  of  the  first  indorser,  said  to  be  worth 
-some  $6.500;  but  it  appeared  that  a  bill  in  equity  had  been  filed  by  a  third 


638  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

caution,  by  an  indorser,  of  taking  security  from  his  principal, 
has  never  been  adjudged  to  operate  as  a  dispensation  of  a  reg- 
ular demand  and  notice ;  it  is  no  doubt  a  common  occurrence, 
yet  such  effect  has  never  been  imputed  to  it.  There  must  be 
something  more,  such  as  the  taking  into  his  possession  the 
funds  or  property  of  the  principal,  sufficient  for  the  purpose 
of  meeting  the  payment  of  the  note;  or  he  must  have  an 
assignment  of  all  the  property,  real  and  personal,  of  the 
makers,  for  that  purpose.  The  notice  is  dispensed  with  when 
funds  are  received,  upon  the  ground  that  the  object  for  which 
it  is  required  to  be  given,  namely,  to  enable  the  indorser  to 
obtain  indemnity  from  Ms  principal,  has  already  been  attained. 
Partial  or  doubtful  security  falls  short  of  this,  and  leaves  the 
reason  of  the  rule  requiring  notice  in  full  force."  1 

When  a  bill  is  accepted  for  the  accommodation  of  the 
drawer,  it  is  obvious  that  the  latter  cannot  be  injured  by  the 
want  of  notice  of  non-payment,  or  that  he  cannot  suffer  any 
legal  damage  in  consequence  of  not  receiving  notice.  2  On 
the  same  ground,  when  a  note  is  made  for  the  accommodation 
of  an  indorser,  who  is  ultimately  holden  to  pay  it,  it  is  clear 
that  he  can  lose  nothing  from  the  failure  to  receive  the  usual 
notice  of  dishonor.  3  Being  the  principal  debtor,  he  has  no 
recourse  to  any  other  party  to  the  instrument;  and  hence 
there  is  no  more  reason  for  giving  him,  than  there  is  for 

1  Spencer  v.  Harvey,  supra,  and  Seacord  v.  Miller,  supra.    In  this  latter 
case  it  was  shewn  that  the  indorser  had  taken  from  the  maker  a  chattel  mort- 
gage, conditioned  that  if  the  mortgagor  paid  the  note,  the  transfer  was  to  be 
void;  but  it  was  not  shewn  that  the  security  was  sufficient  to  indemnify  him, 
and  he  was  held  entitled  to  notice  of  dishonor. 

2  Sharp  v.  Bailey,  9  Barn,  and  Cress.,  44.     In  this  case,  it  was  held  that 
the  circumstance  of  the  drawer's  having  drawn  the  bill  payable  at  his  own 
house,  was  evidence  of  its  being  an  accommodation  acceptance,  in  which  case 
notice  of  dishonor  was  unnecessary.    Evans  v.  Norris,  1  Ala.  R.,  n.  5,  511. 

3  French's  Executrix  v.  The  Bank  of  Columbia,  2  Peters  Cond.  R.,  64;  7 
Wend.,  168. 


person  claiming  an  interest  in  the  farm,  and  also  by  the  first  indorser  and  one 
of  the  makers  against  Harvey,  for  relief  from  the  judgment,  and  it  was  held 
that  Harvey  was  discharged  for  want  of  notice  of  dishonor. 


PROCEEDINGS   ON   NON-PAYMENT,   NOTICE.  639 

giving  the  maker  of  a  note  or  the  acceptor  of  a  bill,  notice  of 
non-payment.  But  the  accommodation  drawer  or  indorser  is 
entitled  to  strict  notice,  notwithstanding  the  contract  implied 
by  law  on  the  part  of  the  person  for  whose  accommodation 
the  draft  was  drawn  or  the  indorsement  made,  to  indemnify 
him  against  his  liability,  i  As  to  all  the  other  parties  to  the 
instrument,  his  rights  and  duties  are  the  same  as  in  the  case 
of  business  paper.  •_•  The  party  for  whose  accommodation  he 
draws  the  bill  or  indorses  the  note  may  be  insolvent,  without 
depriving  him  of  the  means  of  recovering  the  amount  due 
thereon :  on  paying  the  bill  or  note  he  will  become  the  holder 
of  it,  and  have  his  recourse  to  the  prior  parties,  to  those  who 
are  mediately  as  well  as  to  those  who  are  ultimately  bound  to 
pay.  For  this  reason  he  is  entitled  to  notice,  just  the  same 
as  if  he  had  become  a  party  to  the  paper  in  the  usual  course 
of  business.  3 

1  Shirley  v.  Fellows,  9  Porter,  300;  Holland  v.  Turner,  10  Conn.  R.,  308. 

*  Church  v.  Barlow,  9  Pick.,  647;  Terry  v.  Parker,  6  Ad.  and  El.,  502, 
608;  Oxford  Bank  v.  Davis,  4  Gush.,  188. 

8  Cory  and  others  v.  Scott,  3  Barn,  and  Aid.,  619.  Where  a  bill  was  drawn 
for  the  accommodation  of  an  indorsee,  and  neither  such  indorsee  nor  the 
drawer  had  any  effects  in  the  hands  of  the  acceptor:  Held  that  a  subsequent 
indorsee  in  order  to  entitle  him  to  recover  against  the  drawer,  is  bound  to 
give  notice  of  non-payment.  Norton  v.  Pickering,  8  Barn,  and  Cress.,  610; 
Holland  v.  Turner,  supra;  Church  v.  Barlow,  supra,  and  Shirley  v.  Fellows, 
9  Port.,  300. 

In  De  Berdt  v.  Atkinson,  2  Hen.  Bla.,  236,  which  has  been  overruled,  it 
was  held  that  where  a  person  indorsed  a  note  knowing  the  maker  to  be  insol- 
vent, and  that  the  money  to  be  obtained  on  the  note  was  to  be  raised  on  his 
credit,  he  is  not  entitled  to  notice.  In  Brown  v.  Maffey,  15  East,  216,  one  of 
the  indorsers  of  a  bill  for  the  accommodation  of  the  last  indorser,  was  held 
entitled  to  notice;  but  it  appeared  that  he  did  not  know  that  the  drawer  had 
no  effects  in  the  hands  of  the  drawee  at  the  time  he  indorsed  the  paper. 

In  the  Farmers'  Bank  v.  Vanmeter,  4  Rand.,  653,  it  was  held  that  one  who 
indorses  a  bill  for  the  accommodation  of  the  drawer  without  any  expectation 
that  it  will  be  honored,  is  not  entitled  to  notice;  on  the  ground  that  the  tran- 
saction is  fraudulent  and  designed  to  create  a  false  credit.  Contra,  Buck  v. 
Cotton,  2  Conn.,  126;  Crossen  v.  Hutchinson,  9  Mass.,  205;  10  id.  62;  Far- 
num  v.  Fowle,  12  id.  89;  Granite  Bank  v.  Ayers,  16  Pick.,  892;  Hightower 
v.  Ivy,  2  Porter,  308;  Jackson  v.  Richards,  2  Caine's  Rep..  343;  Homes  v. 
Bowes,  16  East,  112;  Groton  v.  Dallheim,  6  Greenl.  R.,  466;  Story  on  Bills, 
§346. 


640        ,      BILLS   OF  EXCHANGE  AND  PROMISSORY   NOTES. 

There  is  another  well  established  exception  to  the  general 
rule,  that  notice  of  the  dishonor  of  a  bill  must  be  given  to 
the  drawer,  namely,  where  he  has  no  funds  or  effects  in  the 
hands  of  the  drawee,  i  But  to  this  exception  there  are  some 
important  modifications :  If  the  drawer  has  made  or  is  mak- 
ing a  consignment  to  the  drawee,  and  draws  before  the  con- 
signment comes  to  hand ;  2  or  if  the  goods  are  in  transitu,  but 
the  bill  of  lading  is  omitted  to  be  sent  to  the  consignee,  or 
the  goods  are  lost;  3  or  if  the  drawer  has  any  funds  or  prop- 
erty in  the  hands  of  the  drawee,  or  there  is  a  fluctuating  balance 
between  them  in  the  course  of  their  transactions;  4  or  if  there 
is  a  running  account  between  the  drawer  and  the  drawee,  and 
the  latter  has  been  in  the  habit  of  accepting  the  bills  of  the 
drawer  without  regard  to  the  state  of  their  accounts;  5  or  if 
the  drawer  has  a  reasonable  expectation  that  the  bill  will  be 
paid,  he  is  entitled  to  notice  of  dishonor.  6  In  all  such  cases 

1  Bickerdike  v.  Bollman,  1  Term  R.,  405,  is  the  leading  case  on  this  point. 

8  Per  Lord  Ellenborough,  C.  J.,  in  Legge  v.  Thorpe,  12  East,  175. 

8  Bucker  v.  Killer,  16  East,  43;  8  Campb.,  217. 

4  Brown  v.  Maffey,  15  East,  216,  221. 

6 12  East,  175. 

6  Claridge  v.  Dalton,  4  Maule  and  Sel.,  226.  The  drawer  in  this  case  had 
no  funds  in  the  hands  of  the  drawee,  and  no  effects  except  that  he  had  sup- 
plied him  with  goods  upon  a  credit  which  did  not  expire  until  long  after  the 
bill  became  due ;  and  the  bill  which  was  payable  two  months  after  date,  was 
not  paid  on  presentment  to  the  drawee.  Lord  Ellenborough,  C.  J.:  "I 
accede  to  the  proposition  that  where  there  are  any  funds  in  the  hands  of  the 
drawee,  so  that  the  drawer  has  a  right  to  expect,  or  even  where  there  are  not 
any  funds,  if  the  bill  be  drawn  under  such  circumstances  as  may  induce  the 
drawer  to  entertain  a  reasonable  expectation  that  the  bill  will  be  accepted 
and  paid,  the  person  so  drawing  it  will  be  entitled  to  notice." 

Le  Blanc,  J.  :  "  Every  new  case  makes  one  regret  that  the  rule  in  Bicker- 
dike  v.  Bollman  for  dispensing  with  notice  was  ever  introduced;  but  while 
that  rule  remains  we  must  act  on  it.  I  perfectly  agree  that  it  is  not  necessary 
that  the  drawer  should  have  effects  or  money  in  the  hands  of  the  drawee, 
either  at  the  time  when  the  bill  is  drawn,  or  when  it  becomes  due.  For  if  the 
bill  be  drawn  in  the  fair  and  reasonable  expectation  that  in  the  ordinary  course 
of  mercantile  tranactions  it  will  be  accepted  or  paid  when  due,  the  case  does 
not  range  itself  under  that  class  of  cases  of  which  Bickerdike  v.  Bollman  is 
the  first." 

Bailey  J.,  considered  the  rule  referred  to  established  on  good  foundation, 
but  said  it  extends  only  *o  cases  where  the  party  has  no  effects,  or  is  not 
likely  to  have  effects,  or  has  no  expectation  that  he  will  have  any.  In  all 


PROCEEDINGS   OX   NON-PAYMENT,   NOTICE.  641 

the  drawer  is  considered  as  justified  in  drawing,  as  so  far 
having  a  right  to  draw  that  the  transaction  cannot  be  denomi- 
nated a  fraud.  And  where  the  drawing  is  a  fair  commercial 
transaction,  in  which  the  drawer  has  a  reasonable  expectation 
that  his  bill  will  be  honored,  he  is  entitled  to  the  same  notice 
as  a  drawer  with  funds,  or  authority  to  draw  without  funds,  i 

Previous  dealings  between  the  drawer  and  the  drawee  are 
not  sufficient  to  authorize  the  former  to  entertain  a  reasonable 
expectation  that  his  bill  will  be  accepted  and  paid.  2  His 
expectation  must  be  based  upon  an  established  relation  of 
business,  which  gives  him  a  right  to  anticipate  that  his  bill 
will  be  paid.  It  is  not  enough  that  he  has  supplied  the 
drawee  with  property  on  a  credit,  if  it  appear  that  the  credit 
would  not  expire  until  after  the  bill  became  due.  3  It  is  not 
enough  that  he  has  formerly  had  funds  in  the  hands  of  the 
drawee,  if  it  appear  that  he  had  none  at  the  time,  and  none 
in  expectancy,  and  made  no  arrangement  to  meet  the  draft.  4 
But  where  the  drawer  acts  upon  a  fair  presumption,  he  is 
entitled  to  notice  notwithstanding  it  turns  out  that  he  had  in 
fact  no  funds  on  which  to  draw;  as  where  he  draws  upon 
consignments  of  goods  made  from  time  to  time,  and  the  want 
of  funds  to  meet  the  last  bill  proceeds  from  a  fall  in  the  price 
of  them.  5 

The  English  decisions  narrow  and  limit  the  exception  to 
cases  where  the  drawer  had  no  effects  in  the  hands  of  the 
acceptor  or  drawee  at  any  time  during  the  currency  of  the 

'Dickens  v.  Beal,  10  Peters,  572;  French  v.  The  Bank  of  Columbia,  4 
Cranch.,  168. 

1  Dolfus  v.  Frosch,  1  Denio,  367. 
'  Claridge  v.  Dalton,  supra. 

*  Valk  v.  Simmons,  4  Mason  C.  C.  U.  S.,  113. 

*  Robinson  v.  Ames,  20  John.  R.,  146. 


other  cases  the  drawer  is  entitled  to  notice,  and  this  is  required  hi  order  that 
he  may  withdraw  forthwith  out  of  the  hands  of  the  drawee  such  effects  as  he 
may  happen  to  have,  or  may  stop  those  which  he  is  in  the  course  of  putting 
into  his  hands.  And'  it  was  held  by  the  unanimous  decision  of  the  court  that 
the  defendant,  the  drawer,  in  this  case  was  not  entitled  to  notice. 


642  BILLS  OF  EXCHANGE  AND  PROMISSORY  NOTES. 

bill,  and  would  have  no  remedy  against  the  acceptor  or  any 
other  person  on  being  compelled  himself  to  pay  the  bill,  i  If 
he  have  effects  in  the  hands  of  the  drawee  at  any  time  before 
the  bill  matures,  he  is  entitled  to  notice,  though  they  be  not 
sufficient  to  meet  the  bill.  2  If  he  have  funds  in  the  hands 
of  the  drawee  at  the  time  of  drawing,  he  is  entitled  to  notice, 
though  the  balance  may  afterwards  vary  and  be  turned  into 
the  opposite  scale,  provided  he  has  acted  fairly  under  all  the 
circumstances.  3 

In  this  country,  the  exception  has  not  passed  under  review 
in  so  great  a  variety  of  cases;  but  it  is  usually  stated  in  sub- 
stantially the  same  terms.  If  the  drawer  of  a  bill  has  no 
funds  or  assets  in  the  hands  of  the  drawees,  or  expectation  of 
funds,  or  any  arrangement  or  agreement  with  them  to  accept 
the  bill,  he  cannot  ordinarily  suffer  any  injury  for  the  want 
of  notice,  and  he  is  not  entitled  to  it.  4  Mr.  Justice  Story 
states  it  in  these  words :  "  if  the  drawer  has  no  right  whatso- 
ever to  draw  the  bill,  or  no  reasonable  ground  to  expect  the 
bill  to  be  accepted,  he  is  not  deemed  entitled  to  notice  of  the 
dishonor  thereof,  for  it  was  his  own  fault  to  draw  the  same; 
and,  correctly  speaking,  he  cannot  be  said  to  have  suffered 
any  loss  by  the  want  of  notice.  Thus,  for  example,  ordina- 
rily, if  the  drawer  draws  the  bill,  without  having  funds  in 
the  hands  of  the  drawee,  or  expectation  of  funds,  or  any 

1  Orr  v.  Magennis,  7  East,  869.  It  is  not  necessary  that  the  drawer  should 
have  a  remedy  on  the  bill,  to  entitle  him  to  notice  of  dishonor ;  nor  is  it  essen- 
tial that  he  should  have  a  right  of  action  against  the  drawee  in  consequence 
of  his  refusing  to  accept  or  pay  the  bill ;  it  is  enough  if  he  draws  with  a  rea- 
sonable expectation  that  the  bill  will  be  paid.  Blackhen  v.  Doren,  2  Campb. 
503.  Bagnall  v.  Andrews,  7  Bing.,  217.  The  drawer  had  been  sending  goods 
to  the  drawee  for  sale,  and  the  bill  in  this  case  was  drawn  and  accepted 
without  either  party's  knowing  the  state  of  the  account  between  them ;  but  it 
turned  out  that  the  drawer  was  at  the  time  indebted  to  the  defendant  the 
drawee  and  acceptor  5  and  it  was  held  that  the  bill  could  not  be  considered 
accommodation  paper. 

3  Thackray  v.  Blackett,  3  Campb.,  164. 

8  Orr  v.  Magennis,  supra;  but  of  course  this  must  depend  upon  circum- 
stances, and  upon  the  question  whether  he  has  acted  upon  a  reasonable 
expectation  that  his  bill  would  be  paid;  Valk  v.  Simmons,  supra. 

4  Oliver  v.  the  Bank  of  Tennessee,  decided  in  I860;  11  Humph.,  (Tenn.,)  74 


PROCEEDINGS   ON   NON-PAYMENT,  NOTICE.  643 

arrangement  or  agreement  on  the  part  of  the  drawee  to  accept 
the  bill,  he  will  not  be  entitled  to  notice,  and  not  be  dischar- 
ged by  the  want  thereof."  i 

1  Story  on  Bills,  5  311.    Mr.  Chitty  sums  up  the  authorities  a* follows:  "If, 
at  any  time  between  the  drawing  of  the  bill  and  its  presentment  and  dishonor, 
the  drawee  had  some  effects  or  property  of  the  drawer  in  his  hands,  though 
insufficient  to  pay  the  amount,  he  will  nevertheless,  in  general,  be  entitled  to 
notice  of  the  dishonor,  and  the  laches  of  the  bolder  will  discharge  him  from 
liability;  for  this  case  differs  from  that  where  there  are  no  effect*  whatever  of 
the  drawer  in  the  hands  of  the  drawee  at  the  time,  because  the  drawer  must 
then  know  that  he  is  drawing  upon  accommodation,  and  without  any  reason' 
able  expectation  that  the  bill  will  be  honored;  but  if  he  have  some  effects  at 
the  time,  it  would  be  dangerous  and  inconvenient,  merely  on  account  of  the 
shifting  of  a  balance,  to  hold  notice  not  to  be  necessary;  it  w«mld  be  intro- 
ducing a  number  of  collateral  issuesjupon  every  case  upon  a  bill  of  exchange, 
to  examine  how  the  accounts  stood  between  the  drawer  and  the  drawee,  from 
the  time  the  bill  was  drawn  down  to  the  time  when  it  was  dishonored.    For  the 
same    reason,   if  the  drawer  of  a  bill  of  exchange,  when   it  is  presented 
for  acceptance,  has  effects  in  the  bands  of  the  drawees,  though  he  is  indebted 
to  them  in  a  much  larger  amount,  and  they  without  his  privity  have  appropri- 
ated the  effects  in  their  hands  to  the  satisfaction  of  the  debt,  he  is  entitled  to 
notice  of  the  dishonor.    Nor  is  actual  value  in  the  hands  of  the  drawee  at  the 
time  of  drawing,  essentially  necessary  to  entitle  the  drawer  to  notice  of  dis- 
honor of  the  "bill;  for  circumstances  may  exist  which  would  give  a  drawer 
good  ground  to  consider  he  had  a  right  to  draw  a  bill  upon  his  correspondent ; 
as,  where  he  had  consigned  effects  to  him,  to  answer  the  bill,  though  they  may 
not  have  come  to  him  at  the  time  the  bill  was  presented  for  acceptance;  to 
which  may  be  added  the  case  of  bills  drawn  in  respect  of  other  fair  mercantile 
agreements.     So,  it  is  no  excuse  for  not  giving  notice  to  the  drawer  that  he 
had  in  fact  no  funds  in  the  hands  of  the  drawee,  if  he  had  made  provision 
to  have  such  funds  there,  and  might  reasonably  expect  they  were  there;  as, 
when  a  bill  was  drawn  in  respect  to  a  cargo  shipped  by  the  drawer  to  this 
kingdom,  and  in  the  hands  of  a  broker,  who  was  to  pay  the  proceeds  to  the 
drawee  to  enable  him  to  take  up  the  bill,  in  which  case  notice  was  held  requi- 
site.    And,  therefore,  where  the  drawer  had  sold  and  shipped  goods  to  the 
drawee,  and  drew  a  bill  before  they  had  arrived,  and  the  drawee  not  having 
received  the  bill  of  lading,  refused  to  accept  the  goods  because  they  were 
damaged,  and  who  refused  to  accept  the  bill,  it  was  decided  that  the  drawer 
was  discharged  for  want  of  notice.     But,  if  the  vendor  of  goods  sold  upon 
credit,  draws  upon  the  purchaser  a  bill,  which  would  be  due  long  before  the 
expiration  of  the  stipulated  credit,  he  is  not  entitled  to  notice  of  dishonor; 
because  he  had  no  reasonable  expectation  that  the  drawee  would  honor  the 
bill,  but  on  the  contrary,  a  pretty  clear  assurance,  that  it  would  be  dishonored. 
And  in  one  case,  it  seems  to  have  been  suggested,  that  the  want  of  notice  is 
no  defence,  where  the  defendant  had  not  at  the  time  the  bill  became  due,  suffi- 
cient effects,  although  he  had  such  when  the  bill  was  drawn;  as  where  the 
party,  having  £712  at  hia-  banker's,  accepted  a  bill  for  £300,  payable  there, 


644  BILLS  OF  EXCHANGE  AND   PROMISSORY    NOTES. 

Where  the  drawer  would  have  a  remedy  in  respect  of  the 
bill  against  some  other  party,  he  is,  as  we  have  said,  entitled 
to  notice,  although  he  had  no  funds  in  the  hands  of  the 
drawee;  as,  where  he  drew  the  draft  for  the  accommodation 
of  another  person,  and  an  action  thereon  was  brought  against 
the  drawer  by  a  subsequent  indorsee.  He  has  a  right  to  notice 
in  fhis  case,  because  he  has  a  remedy  over  against  the  person 
for  whose  accommodation  he  drew  the  bill,  i  So,  the  drawer 

'Norton  v.  Pickering,  8  Barn,  and  Cress.,  610;  action  by  the  indorsee 
against  the  drawer^  The  bill  was  drawn  by  A,  payable  to  his  own  order  two 
months  after  date,  upon  B,  for  the  accommodation  of  G,  who  indorsed  it  for 
value  to  D.  But  the  bill  had  been  accepted,  though  without  any  funds  or 
effects  in  the  hands  of  the  drawee.  Lord  Tenterden,  C.  J.  :  "I  think  the 
case  of  Cory  v.  Scott,  (3  B.  and  A.,  619,)  was  properly  decided,  and  that  it 
must  govern  the  present  case.  It  may  be  questionable  whether  it  might  not 
have  been  more  conducive  to  the  interests  of  commerce  to  have  decided  that 
the  holder  of  a  bill  is  not  at  liberty  to  give  evidence  of  any  circumstance  to 
excuse  the  want  of  notice.  Here  the  defendant  does  not  seek  to  avail  himself 
of  any  circumstance  dehors  the  bill.  He  being  the  drawer  of  the  bill,  by  the 
law  of  merchants,  was  entitled  to  notice  of  dishonor.  The  plaintiff  does  not 
attempt  to  get  rid  of  the  law  merchant,  for  he  says  the  acceptor  had  no  effects 
of  the  drawer  in  his  hands,  I  think  the  defendant  was  entitled  to  notice  of 
dishonor,  and  that  the  non-suit  was  right." 

The  rule  is  the  same  in  this  country;  Shirley  v.  Fellows,  9  Porter,  300; 
Evans  v.  Norris,  1  Ala.,  511;  Reid  v.  Morrison,  2  "Watts  and  Serg.,  401; 
Sherrod  v.  Rhedes,  5  Ala.,  683, 


but  when  due,  he  had  only  £41 ;  in  which  case  notice  to  him  was  considered 
unnecessary,  but  the  decision  proceeded  on  the  ground  that  an  acceptor  is 
not  entitled  to  notice,  and  therefore,  cannot  be  relied  upon  as  altering  the 
general  rule.  Where  the  drawer  of  a  bill  of  exchange  had  no  effects  in  the 
hands  of  the  acceptor,  from  the  time  of  the  drawing  till  it  became  due,  but 
the  acceptor  had  received  from  the  drawer,  prior  to  this  bill  on  which  the 
action  was  brought,  acceptances  of  the  drawer,  upon  which  he  had  raised 
money,  some  of  which  acceptances  had  been  returned  dishonored,  and  others 
were  outstanding,  it  was  held  that  the  drawer  was  entitled  to  notice  of  dis- 
honor of  the  bill.  And  it  should  seem,  that  although  the  drawer  or  other 
party  may  not  have  advanced  money  or  goods  to  the  drawee,  yet  if  he  has 
deposited  short  bills,  or  policies,  or  even  title  deeds,  in  his  hands,  or  has 
accepted  cross  bills,  and  had  reasonable  ground  to  expect  that  the  drawee 
would  accept  or  pay  in  respect  thereof,  he  is  entitled  to  notice  of  the  dis- 
honor." Chitty  on  Bills,  444.  The  authorities  cited  are  these,  Orr  v.  Magen- 
nis,  7  East,  359;  3  Smith,  328;  Blackhan  v.  Doren,  2  Campb,,  503;  Ham- 


PROCEEDINGS   ON    NON-PAYMENT,    NOTICE.  645 

of  a  dishonored  bill  is  entitled  to  notice,  although  he  has  no 
funds  in  the  hands  of  the  drawee  and  has  had  no  business 
transactions  with  him,  if  he  draws  at  the  suggestion  of  a  third 
person  who  is  indebted  to  him,  and  informs  him  that  the 
drawee  is  owing  him,  the  third  person,  and  that  the  draft  will 
be  paid;  for  here  the  drawer  has  reasonable  ground  to  expect 
that  the  bill  will  be  honored,  i 

The  drawer's  want  of  funds  in  the  han^s  of  the  drawee, 
from  the  date  of  the  bill  until  it  becomes  payable,  is  prima 
facie,  a  sufficient  excuse  for  not  giving  him  due  notice  of  dis- 
honor; and  if  he  does  not  prove  that  he  has  sustained  damage 
from  the  want  of  notice,  he  is  answerable,  though  he  received 
no  notice  of  the  non-payment.  2  As  in  other  cases,  so  here, 

1  Lafltte  v.  Slater,  6  Bing.,  623. 

1  Fitzgerald  v.  Williams,  6  Bing.,  new  cases,  68.  This  was  an  action  against 
the  drawer  of  a  bill  of  exchange;  and  the  declaration  alleged  that  the 
defendant  made  his  bill  payable  to  his  own  order  two  months  after  date, 
directed  to  T.  W.  Ware,  and  indorsed  the  bill  to  the  plaintiff;  that  the  drawee 
did  not  pay  the  bill  when  presented  to  him  at  maturity ;  and  further  averred 
that  the  defendant,  the  drawer,  had  no  funds  in  the  hands  of  the  drawee  at 
the  time  the  bill  was  drawn,  nor  at  any  time  afterwards  before  it  became  due; 
that  the  defendant  had  no  reasonable  ground  to  expect  that  he  should  have 
effects  in  the  hands  of  the  drawee,  or  that  the  drawee  would  be  provided 
with  funds  with  which  to  pay  the  bill;  that  there  was  no  consideration  for  the 
drawee  to  accept  or  pay  the  bill ;  and  that  the  defendant  had  not  sustained 
any  damage  for  the  want  of  notice.  The  defendant's  pleas  denied  the  due 
presentment  of  the  bill,  and  alleged  want  of  notice  of  dishonor  and  damages 
in  consequence.  On  trial  a  verdict  was  found  for  the  plaintiff,  after  which  an 
application  was  made  for  a  new  trial.  Tindal,  C.  J.:  "The  plaintiff  having 
averred  as  an  excuse  for  not  giving  notice  of  the  dishonor  of  the  bill,  that  the 
defendant  had  no  funds  in  the  acceptor's  hands,  assigned  a  sufficient  excuse 
if  he  had  stopped  short  there ;  for  if  the  defendant  had  no  funds  in  the  hands 
of  the  acceptor  he  was  not  damnified;  if  he  was,  after  the  issue  he  has  taken 
upon  the  whole  allegation,  the  proof  would  have  come  more  properly  from 


mond  v.  Dufrene,  3  Campb.,  145;  Thackray  v.  Blackett,  3  Campb.,  164; 
Legge  v.  Thorpe,  11  East,  175;  1  Campb.,  310;  Walwyn  v.  St.  Quinton,  1 
Bos.  and  P.,  654;  2  Esp.,  615;  ex  parte  Wilson,  11  Ves.,  411;  Robins  v.  Gib- 
son, 3  Campb.,  334;  12  East,  175;  Kucker  v.  Ililler,  16  East,  43;  3  Campb., 
217,  334;  Claridge  v.  Dalton,  4  Maule  and  Sel.,  226;  Smith  v.  Thatcher,  4 
Barn,  and  Aid.,  200;  Spooner  v.  Gardner,  Ry.  and  Mood.,  84;  ex  parte. 
Heath,  2  Ves.  and  Bea..  240;  2  Rose,  141. 


646  BILLS  OF  EXCHANGE  AND   PROMISSORY  NOTES. 

the  rules  of  pleading  are  the  test  of  what  the  law  is;  and  it  has 
been  held,  in  an  action  against  the  drawer,  not  necessary  that 
the  declaration,  alleging  the  want  of  effects  as  an  excuse  for 
the  omission  to  give  him  notice,  should  deny  that  the  drawer 
had  any  reasonable  expectation  when  he  drew,  or  during  the 
currency  of  the  bill,  that  he  ^would  have  assets  at  the  time 
of  its  maturity  in  the  hands  of  the  drawee,  and  that  there  is  no 
distinction  in  thi£  respect  between  a  bill  of  exchange  and  a 
banker's  cheek,  i 

So  in  this  state,  the  party  suing  the  drawer  of  a  draft  or 
check,  dishonored  for  the  want  of  funds,  must  allege  all  the 
facts  constituting  his  cause  of  action;  and  every  fact  which 
the  plaintiff  must  prove  to  enable  him  to  maintain  his  suit, 
and  which  the  defendant  has  a  right  to  controvert  in  his 
answer,  must  be  distinctly  averred;  and  every  such  averment 
must  be  understood  as  meaning  what  it  says,  and  consequently 
is  only  to  be  sustained  by  evidence  which  corresponds  with  its 
meaning.  If  the  plaintiff  relies  upon  facts  dispensing  with 
presentment  or  notice,  such  as  absence  of  effects  in  the  drawee's 
hands,  or  a  countermand  of  payment  by  the  drawer,  he  must 
allege  them  specially  in  his  complaint.  2 

The  indorser's  right  to  notice  is  not  at  all  affected  by  the 
drawer's  want  of  funds  or  effects  in  the  hands  of  the  drawee;  3 

1  Thomas  v.  Fenton.  5  Dowling  and  Lowndes  Pr.  R.,  28.  Per  Curiam: 
"  In  an  action  against  the  drawer  of  a  bill  of  exchange,  a  want  of  notice  of 
dishonor  is  excused  by  an  allegation  that  there  were  no  effects  in  the  hands  of 
the  drawee  at  the  maturity  of  the  bill;  that  it  was  an  accommodation  accep- 
tance, and  that  the  drawer  has  sustained  no  damage  by  the  want  of  notice." 
But  this  was  said  with  reference  to  a  declaration  alleging  the  want  of  funds 
from  the  time  the  draft  was  drawn  till  it  became  due. 

9  Garvey  v.  Fowler,  4  Sand.  R.,  665. 

8  Wilks  v.  Jacks,  Peake,  202 ;  French  v.  The  Bank  of  Columbia,  4  Cranch, 
153. 

him."  Maule,  J.:  "  The  plea  puts  in  issue  what  is  immaterial;  and  as  the 
defendant  did  not  prove  that  he  had  sustained  any  damage  from  the  want  of 
notice,  there  can  be  no  reason  for  disturbing  the  verdict." 

S.  C.,  8  Scott  R.,  271.  "  If  the  defendant  had  no  funds  in  the  hands  of 
the  acceptor,  he  was  not  damnified.  At  all  events,  the  burthen  of  proving 
that  he  was,  rested  upon  him."  Coltman,  J.,  said  the  want  of  funds  was 
prima  facie  a  sufficient  excuse  for  not  giving  notice  of  dishonor. 


PROCEEDINGS    ON    NON-PAYMENT,    NOTICE.  647 

unless  the  act  of  drawing  be  fraudulent  and  the  indorser 
implicated  in  the  fraud,  i  And  it  has  been  held  that  one 
who,  without  consideration,  but  without  fraud,  indorses  a  bill 
in  which  both  the  holder  and  acceptor  are  fictitious  persons, 
is  entitled  to  notice.  "The  indorser  undertakes  to  pay,  if 
those  who  ought  to  pay  do  not;  therefore  he  is  entitled  to 
notice,  that  he  may  have  his  remedy  against  them."  2 

The  law  on  this  subject  is  founded  on  a  reason  of  public 
expediency.  There  is  nothing  more  important  than  that,  in 
questions  of  a  general  mercantile  nature,  there  should  be  a 
uniformity  of  decision,  and  although  the  justice  and  equity 
of  the  rule  requiring  notice,  may  not,  in  some  cases,  be  per- 
ceived, where  the  payee  has  purchased  a  bill,  and  it  is  drawn 
in  good  faith,  and  no  conceivable  loss  has  happened  by  the 
want  of  notice;  yet  as  there  maybe  cases  where,  though  there 
were  no  funds  in  the  hands  of  the  drawee,  the  drawer  may 
be  injured  by  the  want  of  notice,  it  is  better  that  the  rule  on 
the  subject  should  be  general  and  uniform  throughout  the 
mercantile  world.  3 

Ignorance  of  the  party's  residence  will  excuse  delay  in 
giving  him  notice,  when  the  time  is  consumed  in  the  use  of 
diligence  to  acquire  the  necessary  information.  Lord  Ellen- 
borough  :  "  It  would  be  very  hard,  when  the  holder  of  a  bill 
does  not  know  where  the  indorser  is  to  be  found,  if  he  lost 
his  remedy  by  not  communicating  immediate  notice  of  dis- 
honor of  the  bill;  and,  I  think,  the  law  lays  down  no  such 
rigid  rule.  The  holder  must  not  allow  himself  to  remain  in 
a  state  of  passive  and  contented  ignorance;  but  if  he  uses 
reasonable  diligence  to  discover  the  residence  of  the  indorser, 
I  conceive  that  notice  given  as  soon  as  this  is  discovered,  is 
due  notice  of  the  dishonor  of  the  bill,  within  the  usage  and 
custom  of  merchants."  4  The  principle  here  laid  down  may 

1  Farmer's  Bank  v.  Van  Meter,  4  Rand.,  558. 

*  Leach  v.  Hewitt.  4  Taunt.,  730. 

*  Per  Ch.  J.  Spencer  in  Robinson  v.  Ames,  20  John.  R.,  150;  see  also  the 
opinion  of  Ch.  J.  Marshall  hi  French  v.  The  Bank  of  Columbia,  supra. 

4  Bateman  v.  Joseph,  2  Campb.,  463;  S.  C.  12  East,  433.  The  question  of 
diligence  was  in  this  case  left  to  the  jury,  which  is  not  now  done  where  there 
is  no  dispute  about  the  facts. 


648 

be  illustrated  by  an  adjudged  case :  The  traveler  of  A,  a 
tradesman,  received  in  the  course  of  business,  a  promissory 
note,  which  he  delivered  to  his  master  without  indorsing  it, 
and  the  note  having  been  returned  to  A  dishonored,  the  latter 
not  knowing  the  address  of  the  next  preceding  indorser,  wrote 
to  his  traveler,  who  was  then  absent  from  home,  to  inquire 
respecting  it;  and  it  was  held  that  A  was  not  guilty  of  laches, 
although  several  days  elapsed  before  he  received  an  answer 
and  gave  notice  to  the  next  party,  it  appearing  that  he  had 
used  due  diligence  in  ascertaining  the  address  of  the  indorser 
and  in  giving  him  notice  after  he  had  ascertained  it.  i 

We  have  already  seen  that  the  exercise  of  due  diligence  is 
equivalent  to  actual  notice,  2  and  that  the  holder  or  indorser 
who  acts  upon  credible  information — 'information  on  which  he 
has  a  right  to  rely,  in  giving  notice  of  dishonor,  retains  his 
right  of  recourse,  notwithstanding  he  may  have  been  misled 
in  regard  to  the  residence  of  the  party  to  be  charged.  3  In 
other  words,  the  liability  of  the  drawer  or  indorser  is  fixed 
by  the  exercise  of  such  diligence  as  the  law  requires  in  this 
respect.  And  where  the  holder  acts  in  good  faith,  giving 
notice  to  an  indorser  through  the  post  office,  addressed  to  him 
at  the  place  where  he  resides,  according  to  the  best  information 
that  can  be  obtained;  it  has  been  adjudged  that  the  holder  is 
not  bound  to  give  a  new  notice  on  discovering  that  he  has 
been  misled  in  respect  to  the  indorser's  place  of  residence.  In 
delivering  this  opinion,  the  court  say :  "  We  have  already  said 
that  the  liability  of  the  indorser  was  fixed  by  the  notice  sent 
to  Nottingham.  The  plaintiffs  had  acquired  a  right  of  action 
against  him  by  this  notice,  and  might  have  brought  their  suit 
the  next  day.  Could  that  right  be  divested  by  the  information 

1  Baldwin  and  others  v.  Richardson,  1  Barn,  and  Cress.,  245.  "Where  a 
delay  occurs,  in  ascertaining  the  residence  of  a  party  to  a  bill  of  exchange,  as 
where  it  becomes  necessary  to  write  to  another  party  to  obtain  the  address  of 
the  drawer,  it  is  sufficient  if  no  time  be  lost  in  forwarding  it  after  the  informa- 
tion is  received;  Dixon  and  others  v.  Johnson,  29  Eng.  Law  and  Eq.  R.,  504, 
decided  in  1855. 

3  2  Hill  R.,  578;  3  Id.,  520. 

8  Aspinwall  v.  Meyer,  2  Sand.  R.,  178;  Carroll  v.  Upton,  2  Id.,  171,  and 
cases  there  cited;  3  Comst.,  272;  Harris  v.  Robinson,  4 Howard,  U.  S.R.,345. 


PROCEEDINGS   ON   NON-PAYMENT,  NOTICE.  649 

which  was  subsequently  given  to  them?  We  think  not,  and 
that  all  of  the  cases  in  relation  to  this  subject  imply  the  con- 
trary. The  books  are  full  of  cases  where  mistakes  of  this 
kind  have  been  committed,  and  suits  afterwards  brought  when 
the  residence  of  the  party  was  discovered.  Yet  it  does  not 
seem  to  have  been  supposed  in  any  of  them  that  a  second 
notice  was  necessary,  nor  are  we  aware  that  any  such  point 
has  ever  been  raised.  Yet  if  a  notice  thus  given,. after  dili- 
gent inquiry,  is  not  equivalent  to  actual  notice,  knowledge 
subsequently  obtained  would  be  a  defence  to  the  action,  even 
if  the  holder  had  brought  suit  before  he  learned  what  was  the 
nearest  or  usual  post  office  of  the  defendant."  i 

Delay  in  giving  notice  may  also  be  excused,  by  the  circum- 
stance of  the  day  on  which  the  holder  should  regularly  have 
given  the  notice  being  a  public  festival,  on  which  he  is  strictly 
forbidden  by  his  religion  to  attend  to  any  secular  affairs.  2 
"The  law  merchant  respects  the  religion  of  different  people. 
For  this  reason  we  are  not  obliged  to  give  notice  of  the 
dishonor  of  a  bill  on  our  Sunday;"  and  the  Jew  is  excused 
from  giving  notice  on  a  day,  during  which  his  religion  does 
not  permit  him  to  attend  to  any  sort  of  business.  3 

Delay  may  also  be  excused,  if  a  state  of  war  interrupts  the 
communication  and  prevents  the  transmission  of  notice;  4  if 
the  holder  or  his  agent  suddenly  fall  sick  or  dead,  inducing  a 
delay;  5  or  if  the  mails  be  interrupted  and  stayed  by  a  supe- 
rior force,  or  by  an  accident  which  is  not  attributable  to  the 
fault  of  the  holder.  6 

As  a  general  rule,  the  indorser  of  a  note  not  negotiable  is 
not  entitled  to  the  usual  privilege  of  an  indorser  of  negotiable 

1  Lambert,  et  al.  v.  Ghiselin,  9  Howard,  TL  S.,  552,  decided  in  1850. 
'Lindow  v.  Unsworth,  2  Campb.,  602;  Chitty  on  Bills,  454. 

*  This  is  different  from  saying  that  a  holder  must  present  a  note  made  by  a 
Jew,  and  falling  due  on  a  Saturday,  or  on  a  Jewish  festival,  on  the  day  pre- 
vious, at  hi«  peril.     Story  on  Bills,  §  340. 

4Hopkirk  v.  Page,  2  Brock.,  20;  Griswold  v.  Waddington,  16,  John.  R., 
438. 

5  See  former  chapter,  Of  proceedings  on  non-acceptance. 

*  22  Conn.  E..  213  in  connexion  with  3  Wend.,  488. 

39 


650  BILLS    OF  EXCHANGE  AND  PROMISSORY  NOTES. 

paper;  lie  stands  in  the  relation  of  principal  and  not  surety 
to  his  indorsee,  and  has  no  right  to  insist  upon  a  previous 
demand  of  the  maker,  and  notice  of  non-payment,  i  As  he 
cannot  be  charged  upon  the  usual  contract  implied  in  the  case 
of  negotiable  paper,  it  is  said  an  absolute  guaranty  may  be 
written  over  his  indorsement,  upon  which  a  recovery  may  be 
had  against  him.  2  But  where  a  person  writes  his  name  on 
the  back  of  a  promissory  note,  and  may  be  charged  thereon  as 
an  indorser,  he  agrees  that  he  will  pay  the  note  to  the  holder 
on  receiving  due  notice  that  the  maker,  on  demand  made  at 
the  proper  time,  has  neglected  to  pay  it;  and  the  case  is  not 
open  to  any  intendment.  3  If  a  third  person  writes  his  name 
on  the  back  of  a  negotiable  note,  before  the  same  has  been 
indorsed  by  the  payee,  the  presumption  of  law  is  that  he 
intends  to  assume  the  liability  of  a  second  indorser.  But 
where  he  indorses  a  note  payable  to  a  particular  person  or 
bearer,  before  the  same  has  been  delivered  to  the  payee,  he  is 
chargeable  thereon  as  first  indorser,  on  the  usual  conditions 
precedent,  of  demand  and  notice.  4 

When  the  fact  appears  that  there  has  been  laches  on  the 
part  of  the  holder,  a  subsequent  promise  by  the  indorser  to 
pay  the  bill,  will  not  render  him  liable,  unless  it  also  appears 
that  the  promise  was  made  with  full  knowledge  of  the  fact 
that  he  had  been  discharged  by  the  laches  of  the  holder, 
But  on  proof  of  a  promise  by  the  indorser,  with  knowledge 
that  he  was  not  liable  on  the  bill,  the  holder  may  recover : 
not,  however,  on  the  ground  that  the  indorser  is  bound  by  the 
promise  as  matter  of  contract,  for  it  wants  consideration ;  but 
on  the  ground  that  a  promise  amounts  to  a  waiver  of  the 
objection  that  the  proper  steps  have  not  been  taken  to  charge 

1  Seymour  v.  Van  Slyck,  8  Wend.  403;  Plimley  v.  Westly,  2  Bing.  N.  C. 
249;  2  Scott,  423;  1  Hodges,  324,  S.  C.  But  the  authorities  on  the  subject 
are  not  uniform,  Parker  v.  Riddle,  11  Ohio,  102. 

2 8  Wend.,  422;  12  John.  R.  159  ;  17  Id.  326;  or  the  indorser  maybe  held 
liable  as  a  maker,  10  Barb.  R.,  402. 

3  Seabury  v.  Hungerford,  2  Hill  R.,  80;  Labron  v.  Woram,  1  Hill  R.,  91; 
see  Moore  v.  Cross,  23  Barb.,  534;  Cottrell  v.  Conklin,  4  Duer,45. 

4  Dean  v.  Hall,  17  Wend.,  214. 


PROCEEDINGS   ON    NON-PAYMENT,  NOTICE.  651 

the  indorser :  i  and  the  same  rule  applies  in  respect  to  the 
drawer.  By  this  it  is  not  meant  that  it  must  appear  that  the 
drawer  or  indorser  knew  the  law  of  the  case  when  he  made 
the  promise :  it  is  enough  if  he  be  shewn  to  have  made  the 
promise  with  knowledge  of  the  facts;  for  he  cannot  defend 
himself  upon  the  ground  of  his  ignorance  of  the  law  when  he 
made  the  promise  2 

A  promise  to  pay  made  under  a  misapprehension  of 
feet,  is  no  waiver  of  the  consequences  of  laches;  3  nor  is  a 
promise  made  in  ignorance  of  a  material  fact  a  waiver;  as 
where  the  drawer  or  indorser  promises  to  pay  without  know- 
ledge that  no  notice  has  been  sent.  4  In  other  words,  where 
the  drawer  or  indorser  has  been  discharged  by  the  laches  of 
the  holder,  and  that  fact  appears,  there  must  be,  in  order  to 
render  him  liable,  clear  proof  that  the  promise  was  made 
with  a  full  knowledge  of  all  the  facts  and  circumstances.  5 

The  distinction  drawn  by  Mr.  Justice  Cowen  between  a 
waiver  of  admitted  laches  and  presumptive  evidence  of  due 
notice,  appears  to  be  well  sustained.  6  At  all  events,  it  is 
clear  that  much  stronger  proof  is  required  to  charge  the 
indorser,  where  it  appears  that  the  holder  has  been  guilty  of 
laches,  than  is  necessary  where  there  is  no  evidence  of  notice 

1  Per  Bronson,  J.,  in  Tebbetts  v.  Dowd,  23  Wend,  379.  On  the  trial,  a  wit- 
ness for  the  plaintiff  testified  that  a  few  days  after  the  check  became  due  he 
met  Tebbetts  the  indorser,  and  told  him  that  the  check  had  lain  over,  and 
that  he  ought  to  take  it  up:  that  Tebbetts  answered,  that  he  knew  that  the 
check  had  been  dishonored,  and  had  lain  over,  and  said  that  he  would  arrange 
it  in  a  few  days ;  that  lie  had  received  part  of  the  money  for  which  the  check 
was  given,  and  that  he  must  and  would  see  the  check  taken  up,  and  promised 
to  take  up  and  pay  it.  On  this  evidence  a  motion  for  a  non-suit  was  made 
and  denied,  after  which  the  jury  found  a  verdict  for  the  plaintiff  in  the  Supe- 
rior court  of  New-York  city,  and  the  case  came  up  on  appeal,  and  the  judg- 
ment below  was  affirmed. 

"Stevens  v.  Lynch,  2  Campb.,  333;  S.  C.  12  East,  38;  Reynolds  v. 
Douglass,  12  Peter's  R.,  497;  Ladd  v.  Kenncy,  2  N.  Ilamp.,  340;  Boyd  v. 
Cleveland,  4  Pick.  525;  and  the  long  array  of  authorities  cited  by  Mr.  Justice 
Cowen  in  Tebbetts  v.  Dowd,  supra. 

'Goodall  v.  Dalley,  1  Term  R..  712;  Blessard  v.  Hurst,  5  Burr,  2672. 

4  Grain  v.  Colwell,  8  John.  R.,  384 . 

•  Spurlock  v.  Union  Bank,  4  Humph.  (Tenn.)  R.;  336. 

8  23  Wend.;  383. 


652  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

or  want  of  notice  except  that  which  is  furnished  by  the  drawer 
or  indorser's  acknowledgment  or  promise  to  pay.  i  If  it  be 
shewn  that  the  holder  has  been  guilty  of  laches,  it  must  also 
appear  that  the  promise  was  made  with  full  knowledge 
of  them,  or  it  will  not  bind  the  party  making  it.  2  But  if  no 
laches  are  shewn,  a  promise  to  pay  is  presumptive  evidence  of 
due  notice.  3 

A  conditional  promise  to  pay  is  not  of  itself  sufficient  evi- 
dence of  notice  or  waiver  of  notice.  The  cases  go  to  this 
point  only;  that  if,  after  the  dishonor  of  a  bill,  the  drawer 
distinctly  promises  to  pay,  that  is  evidence  from  which  it  may 
be  infered  he  has  received  notice  of  the  dishonor;  because 
men  are  not  prone  to  make  admissions  against  themselves; 
and,  therefore,  when  the  drawer  promises  to  pay,  it  is  to  be 
presumed  he  does  so  because  he  knows  the  acceptor  has 
refused.  4  The  promise  is  not  direct  evidence  of  the  fact; 

1  Miller  v.  Hackley,  5  John.  R.,  376. 

"Duryee  v.  Dennison,  Id.,  248  ;  Thornton  v.  Wynn,  12  Wheat.,  183. 

3  Lundie  v.  Robertson ,  7  East,  231.  An  indorsee  three  months  after  the 
bill  became  due,  demanded  payment  of  the  indorser,  who  first  promised  to 
pay  it  if  he  would  call  again  with  the  account,  and  afterwards  said  that  he 
had  not  had  regular  notice,  but  as  the  debt  was  justly  due  he  would  pay  it. 
Held  that  the  first  conversation  being  an  absolute  promise  to  pay  the  bill,  was 
prima  facie,  an  admission  that  the  bill  had  been  presented  to  the  acceptor  for 
payment  in  due  time,  and  had  been  dishonored,  and  that  due  notice  had  been 
given  of  it  to  the  indorser,  and  superseded  the  necessity  of  other  proof  to 
satisfy  these  averments  in  the  declaration.  Decided  in  1806. 

Dorsey  v.  Watson,  14  Missouri,  59.  When  the  drawer  of  a  bill  promises  to 
pay  it  after  it  has  been  dishonored,  the  legal  presumption  is  that  he  has  been 
duly  notified;  and  the  promise  made  a  long  time  after,  dispenses  with  the 
necessity  of  any  proof  that  he  has  received  notice  of  protest  for  non-payment. 
Decided  in  1851. 

*  Jones  v.  O'Brien,  26  Eng.  Law  and  Eq.  R.,  283.  The  action  here  was  by 
the  indorsee  against  the  drawer  of  a  bill  of  Exchange ;  and  there  being  proof 
that  the  defendant  acknowledged  his  liability,  and  promised  to  see  it  arranged, 
to  settle  it ;  it  was  left  to  the  jury  to  find  whether  as  a  fact  there  had  been 
due  notice  of  dishonor  given  to  the  defendant ;  and  the  jury  were  instructed 
that  evidence  of  a  promise  to  pay  was  sufficient  evidence  of  notice.  And 
although  the  defendant  was  called  as  a  witness,  and  testified  that  to  the  best 
of  his  belief  he  had  no  knowledge  of  the  dishonor  till  a  fortnight  afterwards, 
the  finding  of  the  jury  against  him  was  held  conclusive.  1854. 

De  Wolfe  v.  Murray,  2  Sand.  R.,  166.     Metcalffe  v.  Richardson,   73  Eng 
Com.  Law  R.,  1010.     On  the  day  after  the  bill  became  due,  the  holder's  clerk 


PROCEEDINGS    ON   NON-PAYMENT,  NOTICE.  653 

but,  in  the  language  of  Mr.  Justice  Bayley,  where  a  party  to 
a  bill  or  note,  knowing  it  to  be  due,  and  knowing  that  he  was 
entitled  to  have  it  presented  when  due  to  the  acceptor  or 
maker,  and  to  receive  notice  of  its  dishonor,  promises  to  pay 
it,  this  is  presumptive  evidence  of  the  presentment  and  notice, 
and  he  is  bound  by  the  promise  so  made,  i 

Part  payment,  a  separate  agreement  to  pay  the  bill  or  note, 
and  an  unqualified  acknowledgment  of  liability,  made  by  the 
drawer  or  indorser,  are  equivalent  to  a  direct  promise  of  pay- 
ment, and  are  evidence  from  which  the  jury  may  infer  dis- 
honor and  notice.  2 

Where  the  promise  is  qualified  or  conditional,  though  it  is 
not  conclusive  evidence  of  notice,  it  is  according  to  the  English 
decisions,  evidence  from  which  the  jury  may  infer  notice.  3 
And  where  it  appears  that  the  paper  has  not  been  duly  pre- 
sented or  that  notice  has  not  been  duly  given,  and  it  becomes 
necessary  for  the  holder  to  shew  that  the  promise  to  pay  was 
made  with  the  knowledge  of  the  laches,  the  weight  of  autho- 

1  Taylor  v.  Jones,  2  Campb.,  105. 

'Bank  of  U.  S.  v.  Lyman,  20  Vermont,  668;  Bibb  v.  Peyton,  11  Smedes 
&  Marshall,  275;  Williams  v.  Matthews,  3  Cowen,  252;  Keeler  v.  Barline,  12 
Wend.  110. 

'  Hicks  v.  the  Duke  of  Beaufort,  4  Bing.  N.  C.  229.  A  conditional  promise 
to  pay — as  where  the  drawer  said,  "  if  the  acceptor  does  not  pay  I  must,  but 
exhaust  all  your  influence  with  the  acceptor  first,"  is  not  conclusive  evidence 
of  notice  or  waiver  of  notice;  and  it  was  held  that  it  was  correctly  left  to 
the  jury  to  say  from  the  evidence  whether  the  deft,  had  been  duly  notified. 
1838.  S.  C.  5  Scott,  598;  Jones  v.  O'Brien,  supra. 

Dixon  and  another  v.  Elliot,  5  Carr  and  P.,  437.  An  offer  on  the  part  of 
an  indorser  to  compromise  by  paying  one-half  of  a  bill  of  exchange,  or  secu- 
ring the  payment  of  it,  is  sufficient  to  dispense  with  proof  of  notice  of  dis- 
honor; there  being  no  evidence  on  the  subject  of  notice. 

Booth  v.  Jacobs,  3  Nev.  &  Man.,  351.  A  letter  from  the  drawer  written  six 
days  after  he  should  have  received  notice,  alluding  in  ambiguous  terms  to  the 
bill,  was  received  in  evidence  in  this  case  and  left  to  the  jury  to  determine 
from  it  and  the  circumstances  whether  or  not  due  notice  had  been  given. 

Bell  v.  Frankis,  4  Man  &  Gr.  446. 


called  on  the  drawer,  and  told  him  the  bill  had  been  presented  and  the 
acceptor  could  not  pay  it,  to  which  the  drawer  answered  that  he  would  see 
the  holder  about  it;  held  sufficient  to  be  submitted  to  the  jury  to  infer  the 
fact  of  due  i  otice.  1852 


654  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

rity  is  that  this  knowledge  may  be  infered,  as  a  fact,  from  the 
promise  under  the  attending  circumstances,  without  requiring 
clear  and  affirmative  proof  of  knowledge,  i 

Where  an  indorser  has  not  been  duly  notified  of  the  dis- 
honor, a  qualified  or  conditional  promise  made  by  him  to  pay 
the  note  which  is  not  accepted  by  the  holder,  is  no  waiver  of 
the  want  of  notice.  2  That  is  to  say,  admitted  laches  can  only 
be  waived  by  an  unequivocal  and  direct  promise  to  pay,  made 
with  full  knowledge  of  the  facts  and  circumstances,  or  by 
conduct  and  language  which  are  equivalent  to  a  direct 
promise.  3  On  the  other  hand,  where  it  does  not  appear  that 
the  drawer  or  indorser  has  been  discharged  by  the  laches  of 

1  Tibbetts  v.  Dowd,  23  Wend.,  379,  and  the  authorities  there  cited. 

Bank  of  TJ.  S.  v.  Lyman,  20  Vermont  R.,  666.  Where,  after  a  promissory 
note  had  been  duly  protested  for  non-payment  the  indorser  requested  that  it 
might  be  kept  charged  in  a  separate  account,  and  when  the  account  was  sub- 
sequently rendered  to  him,  made  no  objection  to  it,  except  to  claim  an 
additional  item  of  credit,  and  said  nothing  as  to  want  of  notice  of  non-pay- 
ment, it  was  held  that  this  was  an  acknowledgment  of  liability  to  pay  the 
note,  and  thereby  an  admission  of  notice.  There  was  no  question  of  present- 
ment and  dishonor. 

Buchanan  v.  Marshall,  22  Id.,  561.  The  defendant's  agreement,  at  the 
time  of  indorsing  the  note,  to  waive  notice,  presupposes,  that  he  did  not 
intend  to  waive  demand  upon  the  maker ;  hence  it  was  held  necessary  to  prove 
or  excuse  demand  upon  the  maker. 

Ridgway  &  Budd  v.  Day,  13  Penn.  State  R.,  208.  The  indorser  wrote  to 
the  holder  of  a  note  that  it  would  not  be  met,  and  that  he  would  hold  himself 
bound  if  the  time  of  payment  was  extended  for  thirty  days,  which  was  done ; 
and  the  court  held  that  this  was  equivalent  to  a  guaranty  of  payment  at  the 
end  of  thirty  days,  citing  Foster  v.  Jurdison,  16  East,  104. 

"Whether  the  conversations  of  the  indorser  amount  to  a  waiver  of  notice  or 
to  an  admission  of  notice,  is  a  question  of  fact.  Carmichael  v.  the  Bank  of 
Penn.,  4  How.  Miss.,  567.  Leonard  v.  Gary,  10  Wend.,  504;  11  John  R.,  180. 

*  Agan  v.  McManus,  11  John.  R.,  180.  The  defendant  in  this  case  told  the 
plaintiff  he  would  take  the  note  in  suit,  and  give  his  own  payable  in  a  year, 
but  plaintiff  demanded  an  indorser,  which  was  not  given.  Grain  v.  Colwell, 
8  John.  R.,  384,  is  to  the  same  point;  the  indorser  promised  to  turn  out  notes, 
but  the  offer  was  not  accepted.  Sice  v.  Cunningham,  1  Cowen,  397,  is  like 
Agan  v.  McManus,  supra;  see  also  Carter  v.  Burley,  9  N.  Hamp.,  558;  Crea- 
mer v.  Perry,  17  Pick.,  332;  Barkalow  v.  Johnson,  1  Harr.,  397;  Robbins  v. 
Pinckard,  5  Smedes  and  Marsh.,  51.  As  to  a  promise  to  pay  made  by  two  of 
three  executors  of  an  indorser,  see  Cayuga  Co.  Bank  v.  Bennett,  5  Hill  R., 
236;  it  does  not  bind  the  estate. 
3  Thornton  v.  Wynn,  12  Wheat.  R.,  183;  Wmn  v.  Levy,  2  How.  Miss.,  902. 


PROCEEDINGS   ON   NON-PAYMENT,  NOTICE. 


655 


the  holder,  a  qualified  promise,  taken  in  connexion  with  other 
facts  and  circumstances,  has  been  held  in  several  cases  pre- 
sumptive evidence  of  demand  and  notice.  1  As  an  admis- 
sion, it  is  evidence  for  the  jury  like  any  other  conversation; 
if  the  liability  of  the  drawer  or  indorser  be  conceded  by  him, 
the  concession  is  quite  as  good  evidence  of  demand  and  notice 
as  a  promise  to  pay;  for,  as  we  have  said,  the  promise  to  pay 
is  deemed  an  admission  of  liability — an  admission  that  the 
bill  or  note  has  been  presented  in  time,  and  that  due  notice 
of  non-payment  has  been  given.  2  And  there  is  no  reason  why 
the  same  admission  may  not  be  made  by  a  negotiation  for  time, 
or  by  any  other  act  or  language  that  acknowledges  the  obli- 
gation to  pay  the  note  or  bill.  3 

The  notice  may  be  recalled  or  its  effect  destroyed  by  the  holder. 
The  indorser  of  a  bill  of  exchange,  on  receiving  notice  of 
protest,  goes  to  the  holder  of  the  bill  to  take  it  up  and  is 
informed  that  it  has  been  paid  and  credited  to  him  by  the 
bank  in  which  it  was  deposited  for  collection;  while  in  truth  the 
acceptor  was  insolvent  when  the  bill  matured  and  it  was  not 
paid,  but  the  drawer  remained  good  until  some  time  afterwards; 
and  in  an  action  brought  by  the  holder  against  the  indorser, 
after  the  drawer  became  insolvent,  it  was  held  that  the  plain- 
tiff could  not  be  permitted  to  shew  that  the  information  given 
by  him  to  the  indorser  that  the  bill  had  been  paid,  was 
untrue — that  the  indorser  having  acted  upon  that  information 
the  plaintiff  was  estopped  from  asserting  a  different  state  of 
facts.  4  The  circumstance  that  the  plaintiff  acted  in  good 
faith,  supposing  that  the  bill  had  been  paid,  does  not  alter  the 
rule ;  5  he  has  placed  himself  in  such  a  situation  that  it  would 
be  fraudulent  in  him  to  shew  that  what  he  stated,  and  the 
defendant  acted  upon  to  his  prejudice,  was  not  true. 

1  Hicks  v.  Beaufort,  and  Dixon  v.  Elliott,  and  Booth  v.  Jacobs,  supra;  Bank 
of  TJ.  S.  v.  Lyman,  20  Vt.  R.,  666;  Carmichael  v.  The  Bank  of  Penn.,  4 
How.  Miss.,  567;  Jones  v.  O'Brien,  supra. 

*  Lundie  v.  Robertson.  7  East,  231 ;  Croxon  v.  Worthen,  6  M.  and  W.,  5. 

*  Gibbon  v.  Coggon,  2  Campb.,  188;  and  cases  cited  above. 

4  Kingsley  v.  Vernon,  4  Sand.  R.,  361;  see  Pickard  v.  Sears,  6  Ad.  and  El.. 
469. 

*  Petrie  v.  Feeter,  21  Wend.,  172, 


CHAPTER   XI. 

PLEADING  AND  EVIDENCE 


I.  PLEADING. 


It  is  a  general  rule  in  pleading,  that  the  plaintiff  must  state 
in  his  complaint  facts  sufficient  to  establish  a  cause  of  action, 
or  to  shew  that  he  is  entitled  to  the  judgment  or  relief 
demanded  by  him.  i  According  to  the  Code,  his  complaint 
must  contain  a  plain  and  concise  statement  of  the  facts  con- 
stituting his  cause  of  action  without  unnecessary  repetition.  2 
On  the  same  principle,  the  answer  of  the  defendant  must  con- 
tain either  a  general  denial  of  the  facts  stated  in  the  com- 
plaint, or  a  specific  denial  of  some  material  allegation  therein, 
or  a  statement  of  new  facts  shewing  that  the  plaintiff  is  not 
entitled  to  maintain  his  action,  o  In  the  language  of  the  code, 
the  answer  must  contain  :  "1.  A  general  or  specific  denial  of 
each  material  allegation  of  the  complaint  controverted  by  the 
defendant,  or  of  any  knowledge  or  information  thereof  suffi- 
cient to  form  a  belief:  2.  A  statement  of  any  new  matter  con- 
stituting a  defence  or  counter-claim,  in  ordinary  and  concise 
language  without  repetition."  4 

1  Gould's  Pleading,  chap.  4,  §  7.  "  The  declaration,  being  the  statement  of 
those  facts  on  which  the  plaintiff  founds  his  right  of  recovery,  must  of  course 
allege  all  that  is  essential  to  his  right  of  action.  For  he  can  recover  only 
secundum  allegata  et  probafa  ;  and  can  legally  prove  no  material  fact,  which 
the  declaration  does  not  allege."  "  It  is  essential  that  the  declaration  con- 
tain a  statement  of  all  the  facts  necessary  in  point  of  law  to  sustain  the 
action."  Chitty  on  PI.,  213,  244. 

a  Code  of  Procedure,  §  142. 

3  In  assumpsit,  the  plea  of  the  general  issue  was  that  the  defendant  did  not 
undertake  and  promise  in  manner  and  form  as  alleged  in  the  declaration; 
but  the  defendant  might  also  plead  infancy,  the  statute  of  limitations  or  any 
other  appropriate  plea,  shewing  that  the  plaintiff  was  not  entitled  to  recover. 
Wheeler  v.  Curtiss,  11  Wend,,  654;  Hughes  v.  Wheeler,  8  Cowen,  77;  Cald- 
well  v.  Cassidy,  id.  271. 

4  Code,  §  149.     Section  one  hundred  and  fifty  specific*  what  is  to  be  con- 
sidered a  counter-claim,  and  the  mode  of  stating  ik 


PLEADINGS.  657 

The  plaintiff  then  replies  to  such  new  matter  constituting  a 
counter-claim,  denying  generally  or  specifically  each  allega- 
tion controverted  by  him  in  the  same  manner,  and  alleging  in 
concise  language  any  new  matter,  not  inconsistent  with  the 
complaint,  constituting  a  defence  to  the  new  matter  in  the 
answer;  or  he  may  demur  to  the  answer  containing  such  new 
matter,  i  At  this  point  the  pleadings  terminate;  but  the 
allegation  of  new  matter  in  the  answer,  not  relating  to  a 
counter-claim,  or  of  new  matter  in  the  reply,  is  deemed  in 
law  controverted  by  the  adverse  party  as  upon  a  direct  denial 
or  avoidance,  as  the  case  may  require.  2  With  this  exception, 
the  material  allegations  of  the  complaint  not  denied  by  the 
answer,  and  the  material  allegations  of  new  matter  in  the 
answer  constituting  a  counter-claim,  not  denied  by  the  reply, 
in  the  manner  prescribed,  are  for  the  purposes  of  the  action 
taken  as  true.  3 

When  the  plaintiff  verifies  his  complaint,  the  defendant 
must  verify  his  answer;  and  when  the  defendant  verifies  his 
answer,  the  plaintiff  must  verify  his  reply.  4  The  effect  of 
this  provision  is  to  abolish  utterly  the  technicalities  and 
fictions  which '  were  allowed  under  the  old  forms  and  rules 
of  pleading. 

When  the  complaint  shews  on  its  face  affirmatively  that  the 
plaintiff  is  not  entitled  to  maintain  the  action,  or  fails  to  state 
facts  sufficient  to  constitute  a  cause  of  action,  the  defendant 
may  demur;  and  he  may  demur  to  one  or  more  of  several 
causes  of  action  stated  in  the  complaint,  and  answer  the 
residue.  5  The  plaintiff  may  also  demur  to  an  answer  con- 
taining new  matter,  where  upon  its  face  it  does  not  constitute 
a  counter-claim  or  defence;  and  he  may  demur  to  one  or  more 
of  several  counter-claims,  and  reply  as  to  the  residue.  6 

In  a  word  the  old  forms  of  pleading  are  abolished,  and  the 

Code,  §  153  as  amended  in  1857. 

Idem,  §  168. 

Idem. 

Code,  §  156,  157. 

Sections  143,  144. 

Section  153 5  7  Barb.,  80}  6  How.  Pr,.  256. 


658  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES- 

parties  are  required  to  plead  respectively  the  facts  which 
constitute  the  plaintiff's  cause  of  action,  or  the  defendant's 
ground  of  defence  in  the  manner  prescribed  by  the  code;  and 
the  rules  by  which  the  sufficiency  of  the  pleadings  is  to  be 
determined  are  those  established  by  the  code. 

With  this  brief  statement,  we  proceed  to  consider  as  con- 
cisely as  possible  the  rules  of  pleading  applicable  to  bills  of 
exchange,  checks  and  promissory  notes.  In  the  first  place, 
then,  the  action  must  be  brought  in  the  name  of  the  lawful 
holder  and  owner  of  the  paper,  and  the  complaint  must  con- 
tain a  statement  of  all  the  facts  necessary  to  be  proved  on  the 
trial,  in  order  to  entitle  the  plaintiff  to  recover  thereon  against 
the  defendant,  i  An  executor  or  administrator,  a  trustee  of 
an  express  trust,  or  a  person  expressly  authorized  by  statute, 
may  sue,  without  joining  with  him  the  person  for  whose  bene- 
fit the  action  is  prosecuted;  a  but  as  a  general  rule,  every 
action  must  be  prosecuted  in  the  name  of  the  real  party 
in  interest,  3 

The  phrase  "  a  trustee  of  an  express  trust,"  includes  a  per- 
son with  whom  or  in  whose  name  a  contract  is  made  for  the 
benefit  of  another.  Mercantile  agents  and  factors,  who,  accord- 
ing to  the  usage  and  custom  of  merchants,  do  business  in  their 
own  names  for  other  parties,  are  trustees  in  fact,  and  are  enti- 
tled to  sue  on  contracts  made  by  them  with  third  persons.  4 
Hence  a  factor,  taking  a  note  payable  to  himself,  on  a  sale  of 
his  principal's  goods,  is  prima  facie  entitled  to  recover  thereon.  5 

The  complaint  must  shew  title  in  the  plaintiff.  6  If  the 
action  be  brought  in  the  name  of  an  indorsee  against  the 
makers  of  a  promissory  note,  the  complaint  must  shew  by 
some  suitable  averment  that  the  note  has  been  indorsed  or 

1  Gould's  PI.  Ch.  4,  §7-9, 

2  Code,  §113, 

3  §111. 

*Grinnell  v.  Schmidt,  2  Sand.  R>,  706, 

"Edwards  on  Bailm,,  282. 

6  The  provision  of  the  code  requiring  every  action  to  be  brought  in  the  name 
of  the  real  party  in  interest,  would  be  a  dead  letter  in  many  cases  if  the 
plaintiff  could  recover  without  first  establishing  his  title 5  Parker  v.  Totten,  10 
How.  Pr.  R.,  233, 


PLEADINGS.  659 

transferee!  to  the  plaintiff,  or  that  he  is  the  holder  and  owner 
of  the  note,  i  The  language  of  the  code  declaring  that,  "  in 
an  action  or  defence,  founded  upon  an  instrument  for  the  pay- 
ment of  money  only,  it  shall  be  sufficient  for  a  party  to  give 
a  copy  of  the  instrument,  and  to  state  that  there  is  due  him 
thereon  from  the  adverse  party  a  specified  sum,  which  he 
claims,"  does  not  apply  where  the  plaintiff  suing  upon  it  is 
not  named  in  or  is  not  a  party  to  the  instrument;  2  nor  does 
it  apply  where  an  action  is  brought  against  the  indorser  of  a 
promissory  note,  who  is  not  liable  upon  the  instrument  alone.  3 
In  an  action  brought  by  the  payee  against  the  maker,  it  is 
sufficient  to  allege  the  making  of  the  note,  to  give  a  copy  of 
it,  and  claim  the  amount  due  thereon  from  the  defendant  to 
the  plaintiff;  for  in  respect  to  the  maker  the  note  is  an  instru- 
ment for  the  payment  of  money  only.  4  So,  in  an  action  by 
the  payee  against  the  acceptor  of  a  bill  of  exchange,  it  is 
sufficient  for  the  plaintiff  to  give  a  copy  of  the  bill  and  of  the 
acceptance  in  the  complaint,  and  allege  that  the  plaintiff,  who 
is  the  payee  of  the  bill,  is  the  holder  and  owner  of  it;  that 
no  part  of  it  has  been  paid,  but  that  the  whole  amount  of  it 
is  justly  due  to  the  plaintiff  from  the  defendant :  5  "  the  instru- 

1  Lord  and  others  v.  Cheesebrough  and'others,  4  Sand.  R.,  696.  Action  by 
the  indorsees  of  a  note  made  by  the  defendants,  payable  to  their  own  order, 
and  indorsed  by  them.  The  complaint  stated  only  the  making  and  indorsing 
the  note,  gave  a  copy  of  it,  and  claimed  the  amount  due  thereon.  Sandford, 
J. :  "  We  think,  on  full  consideration  of  the  subject,  that  the  complaint  is 
defective.  It  should  shew  in  some  way  the  connection  between  the  plaintiffs 
and  the  note,  i.  e.,  that  it  was  indorsed  or  transfered  to  them,  or  that  they 
are  the  holders  or  owners  of  the  note.  As  it  now  stands  there  is  no  such 
allegation.  The  indorsement  as  copied,  if  that  be  deemed  a  part  of  the 
instrument,  is  in  blank,  and  there  is  no  averment  that  the  note  was  delivered 
to  the  plaintiffs.  The  inference  is  rather,  that  the  defendants,  when  they  made 
and  indorsed  the  note,  delivered  it  to  Hammerling,  Mayett  &  Co.,  from  whom 
the  consideration  proceeded.''  The  plaintiff1  must  connect  himself  with  the 
note — must  prove  title. 

•  Code  §  162 ;  4  Sand.  R .,  692. 

3  Alden  v.  Bloomingdale  impleaded  with  Schmidt,  1  Duer  R.,  601. 

4  Chappell  v.  Bissell,  10  How.  Pr.  R.,  274. 

•Andrews  v.  The  Astor  Bank,  2  Duer  R.,  629.  The  complaint  must  she\r 
that  the  bill  has  become  due,  and  should  claim  interest  from  a  day  specified, 
besides  cost. 


660  BILLS   OF  EXCHANGE  AND   PROMISSORY  NOTES. 

ment  is  unquestionably  one  for  the  payment  of  money,  and  for 
the  payment  of  money  only.  The  acceptor  is  the  party  pri- 
marily liable  and  his  contract  is  absolute  and  unconditional." 
Before  the  adoption  of  the  code  in  this  state  it  was  not 
necessary  that  actions  upon  negotiable  paper  should  be  brought 
in  the  name  of  the  real  parties  in  interest;  but  it  was  always 
necessary  for  the  plaintiff  to  allege  facts  sufficient  to  shew 
title  in  himself,  or  a  legal  right  to  demand  payment  of  the 
note  or  bill,  i  In  other  words,  the  action  might  formerly  be 
brought  in  the  name  of  a  person  who  did  not  own  the  paper,  2 
but  it  was  nevertheless  incumbent  upon  him  to  establish  his 
title  or  to  shew  a  legal  right  to  recover  thereon.  3  For  exam- 
ple, where  a  check  or  note  was  made  payable  to  bearer,  it 
was  enough  for  the  plaintiff  to  allege  that  the  defendant  gave 
it  to  him,  or  to  aver  the  making  of  the  instrument  according 
to  its  legal  effect,  and  himself  to  be  the  lawful  bearer  thereof.  4 
So,  where  a  promissory  note,  payable  to  order,  was  indorsed 
in  blank  by  the  payee,  it  was  competent  for  the  holder  to  allege 
the  making,  and  aver  an  indorsement  of  the  note  directly  to 
himself;  5  for  the  note  being  indorsed  in  blank,  the  owner  had 
a  right  to  fill  it  up  with  what  name  he  pleased,  and  the  per- 
son whose  name  was  so  inserted  was  deemed  the  legal  owner, 
and  though  not  so  in  fact,  he  was  allowed  to  sue  as  trustee  for 
the  person  having  the  real  interest.  6 

1  Butler  v.  Wright,  20  John  R.,  367 ;  See  also  forms  of  declaration  given  by 
Chitty  on  Bills,  551-556;  Waggener  v.  Colvin,  11  Wend.,  27. 

'Mauran  v.  Lamb,  7  Cowen  R.,  174.  It  was  sometimes  said  that  the 
holder  might  recover  without  shewing  title,  as  in  Dean  v.  Hewit,  5  Wend., 
261,  but  such  expressions  were  used  in  reference  to  cases  where  the  paper 
had  been  regularly  indorsed  in  blank  by  the  payee. 

8 11  Wend.,  27;  10  Wend.,  315;  1  Denio,  367. 

4Conroy  v.  Warren,  3  John.  Gas.  359. 

•  Lovell  v.  Evertson,  11  John  R.,  52. 

6  Cooper  v.  Kerr,  cited  by  Kent,  J.,  in  Conroy  v.  Warren,  supra,  and  in 
Lovell  v.  Evertson,  11  John.  R.,  52.  Gage  v.  Kendall,  15  Wend.,  640.  The 
question  here  was,  whether  the  fact  that  the  holder  and  owner  of  a  negotiable 
note  had  prosecuted  it  in  the  name  of  a  stranger,  without  his  knowledge  or 
consent,  was  a  bar  to  a  recovery  in  the  name  of  such  nominal  plaintiff;  and  it 
was  decided  that  the  defendant,  who  was  sued  as  the  maker  of  a  note  payable 
to  bearer,  could  not  be  permitted  to  prove  that  the  plaintiff  had  no  title  or 
interest  in  the  note  declared  on,  but  had  transfered  the  same  to  another  per- 
son ;  nor  that  the  suit  was  commenced  without  the  knowledge  or  consent  of 


PLEADINGS. 


661 


Take  a  single  illustration  of  the  law  in  this  state,  as  it 
stood  before  the  code :  the  plaintiff  declares  on  the  common 
money  counts,  and  attaches  to  the  declaration  a  copy  of  a  note 
made  by  the  defendants  payable  to  the  Bank  of  Western  New- 
York,  or  bearer;  the  defendants  plead  the  general  issue,  and 
that  the  note  is  still  the  property  of  the  bank,  traversing  the 
supposed  averment  of  the  plaintiff  that  he  was  or  is  the  law- 
ful bearer  and  owner  of  the  note.     To  this  plea  the  plaintiff 
replies,  denying  that  the  note  was  the  property  of  the  bank, 
or  that  the  bank  was  the  lawful  holder  and  bearer  of  the 
note,  at   the  commencement  of  the  suit.     On   the   trial   it 
appears  that  the  beneficial  interest  in  the  note  was  in  the 
bank;  the  plaintiff  has  a  verdict,  and  on  a  motion  for  a  new 
trial  the  opinion  is  pronounced  by  Nelson,  C.  J.     "  The  plea- 
dings are  quite  untechnical,  and  have  been  drawn  without 
comprehending  fully  previous  decisions.     They  present  two 
issues  :     1.  As  to  the  beneficial  property  in  the  note;  and  2. 
As  to  the  legal  title  to  it.     The  first  is  immaterial,  and  the 
second   was  properly  found  for  the  plaintiff.     The   note  is 
payable  to  bearer,  and  of  course  is  transferable  by  delivery; 
and  a  person  thus  holding  it,  has  the  legal  interest  and  may 
maintain  the  suit.     It  is  true,  the  replication  sets  up  that  the 
plaintiff  is  the  lawful  owner  and  bearer;  whereas  the  property 
of  the  note  is  in  the  bank :  but  as  between  the  plaintiff  and 
the  defendants,  the  plaintiff  is,  in  judgment  of  law,  the  owner, 
as  they  are  precluded  from  disputing  it.     Unless  the  posses- 
sion is  mala  fide,  and  may  work  some  prejudice  to  them,  they 
have  no  concern  with  that  inquiry."  i 

'Guernsey  v.  Burns  and  Graves,  25  Wend.,  411.  The  pleadings  in  this 
case  were  framed  under  the  statute,  authorising  the  plaintiff  to  declare  on  the 
money  counts,  and  give  a  copy  of  the  note,  and  prove  the  same  under  the 
money  counts ;  and  authorizing  the  defendant  to  give  notice  of  any  matters 
which  if  pleaded  would  be  a  bar  to  the  action.  2  R.  S.,  445,  446,  3d  ed. 

the  plaintiff.  "  A  recovery  in  this  case  in  the  name  of  the  present  plaintiff 
might  be  pleaded,  with  proper  averments,  in  bar  of  a  new  suit  in  favor  of  any 
other  person.  The  defendant  is  not  deprived,  in  such  a  suit,  of  any  defence 
which  he  may  have  as  against  the  real  owner.  There  is,  in  principle,  no 
objection  to  a  suit  on  a  promissory  note  in  the  name  of  a  nominal  plaintiff; 
nor  is  there  any  authority  against  it." 


662  BILLS   OF    EXCHANGE  AND  PROMISSORY  NOTES. 

The  rule  is  the  same  in  England,  i  The  plaintiff  in  an 
action  upon  a  bill,  check,  or  note,  must  shew  in  his  declara- 
tion his  right  to  sue  thereon,  in  the  same  manner  as  every 
other  plaintiff  must  shew  a  sufficient  title  to  enable  him  to 
maintain  his  suit.  2  If  he  sues  as  the  indorsee  or  bearer  of  a 
bill,  he  must  shew  that  it  was  drawn  in  a  transferable  form, 
and  that  the  transfer  to  him  was  made  in  the  manner  permit- 
ted by  its  terms;  in  short,  he  must  allege  all  that  is  necessary 
to  shew  the  legal  title  vested  in  himself.  3 

The  Code  of  Procedure  goes  one  step  farther,  and  declares 
that  all  actions,  those  upon  negotiable  paper  as  well  as  otfiers, 
must  be  brought  in  the  name  of  the  real  party  in  interest;  which 
renders  it  necessary  that  the  complaint  contain  not  only  an 
averment  shewing  title  in  the  plaintiff,  but  also  the  additional 

1  Chitty  on  Bills,  571. 

8  Bishop  v.  Hayward,  4  Term  R.,  471. 

*  Gwinnet  v.  Phillips,  3  Term  R.,  645;  Gibson  v.  Minet,  1  Hen.  Bla.,  605. 

Chitty  on  Bills,  571.  "In  general,  the  plaintiff's  title  should  be  stated 
according  to  the  facts,  and  if  he  claims  as  a  remote  indorsee,  every  indorse- 
ment is  usually  set  forth ;  but  where  the  first  indorsement  is  in  blank,  and  the 
plaintiff  is  apprehensive  that  he  shall  not  be  able  to  prove  all  the  subsequent 
indorsements,  it  is  proper  to  state  the  plaintiff  to  be  the  immediate  indorsee 
of  some  prior  indorser.  In  such  case,  however,  it  is  said  that  in  order  to 
render  the  evidence  correspondent  to  the  declaration,  all  the  subsequent 
names  must  be  stricken  out  of  the  bill  before  or  at  the  time  of  the  trial ;  which 
may  be  done  notwithstanding  there  has  been  a  subsequent  indorsement  in 
full ;  though  by  so  doing  the  plaintiff  loses  the  benefit  of  the  intermediate 
title.  In  this  case,  in  order  to  avoid  unnecessary  expense,  the  indorsements 
may  be  described  concisely  thus  :  "  And  the  said  A  then  indorsed  the  said 
bill  of  exchange  to  the  said  B;  and  the  said  B  then  indorsed  the  said  bill  of 
exchange  to  the  said  C.,  8cc."  And  in  an  action  against  a  remote  indorser, 
though  there  be  several  indorsements  between  that  of  the  payee  and  the 
defendant,  the  plaintiff  may  declare  as  on  an  immediate  indorsement  by  the 
payee  to  the  defendant,  and  by  him  to  the  plaintiff,  and  need  not  notice  the 
intermediate  indorsements.  But  if  a  declaration  state  that  A  drew  his  bill  on 
the  defendant,  who  accepted  the  same;  that  A  then  indorsed  the  bill  to  B, 
who  delivered  it  to  the  plaintiff,  the  declaration  will  be  bad." 

In  an  action  brought  by  one  of  several  indorsers,  the  plaintiff  who  is  in 
possession  of  the  bill  may  recover  thereon  against  prior  parties  without 
striking  out  subsequent  indorsements.  6  Cowen,  449;  1  Sand.,  37;  1  Denio, 
867.  And  in  an  action  against  an  indorser,  it  is  not  necessary  to  prove  any 
indorsements  on  the  bill  or  note  prior  to  that  of  the  defendant.  2  Campb., 


PLEADINGS.  663 

fact  that  he  is  the  owner  of  the  bill  or  note.  How  is  this  addi- 
tional fact  to  be  averred  ?  Undoubtedly  it  may  be  averred  by 
stating  the  making  of  the  note  payable  to  a  particular  person 
or  order,  the  indorsement  of  it  by  the  payee  to  his  indorsee, 
and  by  the  latter  to  his  indorsee,  and  so  on  until  the  title  to 
the  note  vests  in  the  holder  by  due  course  of  transfer  by  in- 
dorsement, i  But  suppose  the  action  is  brought  against  the 
first  indorser,  whose  indorsement  is  in  blank,  and  there  are 
several  subsequent  indorsers  whose  signatures  it  is  not  conve- 
nient to  prove,  but  whom  the  holder  does  not  wish  to  release 
by  striking  out  their  indorsements :  what  form  of  allegation 
should  be  used  in  the  complaint  ?  Formerly,  the  plaintiff  in 
this  case  was  allowed  to  state  that  the  payee  indorsed  the  note 
directly  to  him,  and  it  was  then  only  necessary  to  produce  the 
note  on  the  trial  and  prove  the  defendant's  signature.  2  But 
now,  when  the  pleadings  are  to  be  verified,  it  is  essential  that 
the  statement  should  be  literally  true;  and  hence  the  aver- 
ment should  be  made  according  to  the  fact,  without  stating 
any  indorsement  not  necessary  to  convey  the  title  to  the 
plaintiff.  3 

As  against  the  maker,  it  is  sufficient  to  allege  that  the 
payee  to  whose  order  the  note  was  made  payable  transfered 
it  by  an  indorsement  in  blank,  and  that  it  was  afterwards 

1  Idem;  Lord  and  others  v.  Chesebrough  and  others.,  4  Sand.  R.,  696;  tho 
making,  accepting  and  indorsing  of  negotiable  paper  is  always  presumed  to 
be  for  a  good  consideration ;  and  where  the  plaintiff  alleges  an  indorsement 
of  the  note  or  bill  to  himself,  the  complaint  shews  that  he  is  the  owner  and 
holder  of  the  paper;  for  this  averment  is  equivalent  to  a  direct  allegation  that 
the  plaintiff  is  the  owner  of  the  paper.  Appleby  v.  Elkins,  2  Sand.  R.,  673. 

8  Peacock  v.  Rhodes,  Dougl.,  611-633;  Williams  v.  Matthews,  3  Cowen, 
252;  Chaters  v.  Bell  and  others,  4  Esp.  N.  P.  C.,  120.  But  where  the  plain- 
tiff alleges  title,  derived  through  a  succession  of  indorsements,  he  must  prove 
it  in  the  manner  stated.  Williamson  v.  Johnson,  1  Barn.  &.  Cress,  146,  or  by 
an  admission  of  the  defendant,  Bosanquet  v.  Anderson,  6  Esp.  R.,  48. 

3  Bayley  on  Bills,  Ch.,  9,  §  1.  In  the  recent  case  of  James  v.  Chalmers,  5 
Sand,  R.,  52,  2  Selden  R.,  209,  the  allegation  was  that  the  payees  indorsed 
the  note  to  the  plaintiff,  and  the  proof  was  that  it  was  transfered  by  them  to 
Beardsley,  and  by  Beardsley  to  Parks,  and  by  Parks  to  the  plaintiff;  but  it 
does  not  appear  that  the  complaint  was  verified,  nor  that  any  objection  was 
made  to  the  proof  on  the  ground  that  it  did  not  support  the  allegations  of  the 
complaint. 


664  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

transferee!  to  the  plaintiff,  who  is  the  owner  and  holder  of 
the  note,  i  As  against  a  remote  indorser,  it  is  enough  to 
allege  the  making  of  the  note  or  bill  in  a  negotiable  form,  that 
it  was  regularly  indorsed  to  the  defendant,  that  he  transfered 
it  by  an  indorsement  in  blank,  and  that  it  was  subsequently 
transfered  to  the  plaintiff:  and  it  is  not  incumbent  upon  the 
plaintiff  to  prove  on  the  trial  either  the  handwriting  of  the 
drawer  or  any  of  the  indorsements  antecedent  to  that  of  the 
defendant,  for  each  indorsement  admits  the  genuineness  of  the 
paper  and  all  prior  indorsements.  2  But  it  must  of  course 
appear  on  the  face  of  the  complaint  that  the  paper  was  nego- 
tiable in  the  hands  of  the  defendant. 

In  the  case  of  a  negotiable  note,  the  plaintiff  should  allege 
a  transfer  from  the  payee,  by  indorsement;  for  a  delivery  by 
the  latter  with  intent  to  pass  the  title,  without  indorsement, 
leaves  the  note  open  to  every  equitable  defence  which  the 
maker  had  against  the  payee  at  the  time  of  the  transfer.  3  A 
mere  assignment  of  such  a  -note  carries  to  the  assignee  no 
greater  interest  in  it  than  the  payee  of  a  non-negotiable  note 
conveys  when  he  transfers  it  by  delivery.  If  the  payee  could 
not  recover  on  it  at  the  time  of  the  transfer,  neither  can  his 
assignee. 

An  averment  in  a  complaint  on  a  negotiable  instrument,  that 
it  was  indorsed  to  the  plaintiff,  is  sufficient  to  shew  that  he 
is  the  owner  and  holder  of  the  paper;  4  the  allegation  imports 
a  delivery  and  vesting  of  the  title  in  the  plaintiff.  On  the 
other  hand,  where  the  plaintiff  brings  an  action  on  a  draft 
payable  in  merchandise,  he  should  allege  a  transfer  to  him- 
self, by  the  payee,  for  value;  he  must  shew  a  legal  title  to  the 
draft.  5 

When  a  note  is  made  payable  to  the  order  of  a  particular 
person,  and  he  transfers  the  same  for  value,  without  indorse- 

1  James  v.  Chalmers,  supra. 

'Critchlow  v.  Parry,  2  Campb.,182;  Lambert  v.  Pack,l  Salk.,127;  1  Lord 
Eaym.,  443. 

"Hedges  v.  Sealy,  9  Barb.  R.,  214 j  See  also  Parker  v.  Totten,  10  How.  Pr. 
E-,  233. 

4  The  Bank  of  Lowville  v.  Edwards,  11  How.  Pr.  R.,  216. 

6Landan  v.  Levy,  1  Abbott's  Pr.  R.,  376. 


PLEADINGS.  665 

ment,  the  purchaser  or  assignee  may  recover  on  it,  under  the 
present  practice,  in  his  own  name,  and  is  not  compelled  to 
allege  or  prove  a  transfer  by  indorsement,  i  Under  the  former 
practice,  he  brought  his  action  on  the  note  in  the  name  of  the 
payee. 

At  common  law  the  payee  of  a  promissory  note  or  bill  of 
exchange  may  sue  the  maker  or  acceptor  upon  the  instrument 
itself  or  upon  the  consideration  for  which  it  was  given;  and 
the  practice  was  formerly  to  declare  on  the  money  counts  and 
give  the  note  or  bill  in  evidence  under  them.  2  The  indorsee 
of  a  bill  might  recover  thereon,  in  the  same  manner  against 
the  acceptor,  3  against  his  immediate  4  or  against  a  remote 

'Billings  v.  Jane,  11  Barb.  R.,  620,  and  the  cases  there  cited. 

The  law  of  France  is  different.  Trimbey  v.  Vignier,  1  Bing.  N.  C.  151. 
The  action  hi  this  case  was  brought  on  a  promissory  note  made  in  France  in 
this  form: 

"  A  la  fin  Decembre  prochain  je  payerai  a  1'ordre  de  M.  Burillon  le  somme 
de  six  cents  dix  francs  valeur  en  marchandize. 

Paris  le  10  Juillet,  1829. 

B.  P.  610  francs.  E.  Vignier. 

Rue  St.  Denis  193. 

Indorsed: 

Payez  a  M.  Durant  valeur  en  compte. 

Paris,  le  Juillet,  1829.  P.  Burillon. 

Je  garantis  a  M.  Durant  le  protetet  la  denonciationdu  present  billet,  comme 
s'il  avait  etc  fait,  le  dispensant  de  ces  formalites.  Paris,  le  deux  Janvier, 
1830.  P.  Burillon, 

P.  Durant. 

On  the  trial  of  the  action  the  question  presented  was,  whether  the  plaintiff 
could  recover  against  the  defendant  the  maker  of  the  note,  tracing  his  title 
through  a  blank  indorsement;  and  it  was  held  that  he  could  not.  The  code 
of  commerce  requires  something  more  than  this.  Art.  139  says:  "  The 
indorsement  is  dated;  it  expresses  the  value  given  for  it,  and  states  the  name 
of  him  to  whose  order  it  is  passed."  And  Art.  138  adds-.  "  If  the  indorse- 
ment is  not  conformable  to  the  preceding  article,  it  does  not  operate  as  a 
transfer,  it  is  only  a  procuration."  Decided  hi  1834. 

The  interpretation  of  the  contract  is  to  be  made  according  to  the  law  of 
the  place  where  it  is  made. 

*  Pierce  v.  Crafta,  12  John.  R.,  90,  and  cases  there  cited.    As  to  notes  in 
writing  for  the  payment  of  money,  the  statute  says  :  "  They  shall  be  due  and 
payable  as  therein  expressed."    4  Pick.,  421 ;  see  Battle  v.  Coit,  19  Barb.,  68. 

*  Purdy  v.  Vermilya,  4  Selden  R.,  346;  Tatlock  v.  Harris,  3  D.  and  E.,  174. 
4  Wright  v.  Butler,  6  Wend.,  284;  Butler  v.  Wright,  20  John.  R.,  367.     In 

both  of  these  cases  Jthe  action  was  sustained  by  the  indorsee  against  his 

40 


666  BILLS    OF    EXCHANGE  AND  PROMISSORY   NOTES. 

indorser;  i  and  the  holder  of  a  note  payable  to  bearer,  or  of  a 
note  payable  to  order  and  endorsed  by  the  payee  to  him  or  in 
blank,  might  sustain  a  count  for  money  had  and  received  by 
proving  the  note;  but  where  the  plaintiff  could  not  recover 
on  the  note  as  bearer  or  holder,  for  want  of  title  or  authority 
to  sue  in  his  own  name,  he  could  not  ordinarily  recover  on 
the  common  counts.  2 

The  last  indorser  takes  up  a  promissory  note,  and  declares 
on  the  money  counts  against  one  of  the  prior  indorsers,  and 
the  question  is  whether  the  action  can  be  sustained  :  Shaw, 
Chief  Justice  :  "  To  maintain  assumpsit  there  must  be  a  privity 
between  the  parties,  but  it  may  be  a  privity  in  fact  or  in  law. 
As  between  each  party  to  a  bill  of  exchange,  or  negotiable 
promissory  note,  and  every  other  party,  there  is  a  sufficient 
privity  in  law;  and  as  such  negotiable  contract  is  presumed  to 
be  a  cash  transaction,  and  as  a  money  consideration  is  pre- 
sumed to  pass  at  the  making  and  at  each  indorsement  of  the 
instrument,  each  party  liable  to  pay  is  held  responsible,  as  for 
so  much  money  had  and  received  to  the  use  of  the  party  who 
is,  for  the  time,  the  holder,  and  entitled  to  recover."  3 

But  the  form  of  the  action  did  not  at  all  affect  the  rights  of 
the  parties,  nor  lessen  the  proof  required  to  establish  the 
plaintiff's  right  of  recovery.  Thus,  where  an  action  of 

1  Ellsworth  v.  Brewer,  11  Pick.,  316;  see  2  Seld.,  19;  16  Wend.,  660. 

8  Olcott  v.  Rathbone,  5  Wend.,  490;  see  Butler  v.  Wright,  supra;  2  Wend., 
369. 

3  State  Bank  v.  Kurd,  12  Mass.  R.,  172;  Eagle  Bank  v.  Smith,  5  Conn.  R., 
71;  Penn  v.  Flack,  3  Gill,  and  Johns.,  369;  Tenny  v.  Sanborn,  5  N.  Hamp., 
R.,  557;  Dana  v.  Underwood,  19  Pick.,  99;  Rockefeller  v.  Robison,  17  Wend. 
R.,  206;  Purdy  v.  Vermilya,  4  Selden,  346.  According  to  the  English  deci- 
sions there  is  no  privity  between  the  indorsee  and  the  maker  of  a  note  or  the 
acceptor  of  a  bill,  but  there  is  between  the  payee  and  the  maker  or  acceptor; 
1  East,  98,  434;  Whitwell  v.  Bennett,  3  B.  and  P.,  559;  Houle  v.  Baxter,  3 
East,  177. 


immediate  indorser  for  a  part  payment  by  the  former;  but  the  note  was  in  the 
hands  of  a  subsequent  indorsee,  and  the  title  to  the  note  was  not  in  the  plain- 
tiff; and  the  court  intimated  the  opinion  that  the  action  could  not  have  been 
sustained  if  the  plaintiff  had  been  at  the  time  the  owner  and  holder  of  the 
note.  6  Wend.,  290. 


PLEADINGS.  667 

assumpsit  was  brought  by  the  holder,  against  the  drawers  of 
a  check  payable  to  bearer,  it  was  held  incumbent  on  the 
plaintiffs  to  prove  that  the  same  had  been  duly  presented  for 
payment,  and  notice  of  dishonor  given  to  the  drawer.  1 

The  same  rule  prevails  under  the  present  practice.  The 
payee  of  a  check  dishonored  on  presentment,  must  aver  in  an 
action  against  the  drawer,  due  presentment  to  the  bank  or 
drawee  and  notice  of  dishonor  to  the  drawer;  or  must  allege 
facts  dispensing  with  the  usual  presentment  and  notice,  such 
as  the  want  of  funds  in  the  bank  on  which  the  check  was 
drawn.  And  these  allegations  must  now  be  made  according 
to  the  actual  transaction;  the  plaintiff  cannot  aver  demand 
and  notice,  and  under  the  allegation  prove  circumstances  dis- 
pensing with  demand  and  notice,  as  he  might  do  under  the 
former  rules  of  pleading.  2 

The  law  merchant  prescribes  the  conditions  on  which  the 
plaintiff  is  entitled  to  recover;  and  though  it  is  a  general 
principle  that  the  plaintiff  must  aver  in  his  declaration  or 
complaint  the  facts  constituting  his  cause  of  action,  it  is  to  be 
observed  that  the  rules  of  pleading  do  not  operate  upon 
the  law  of  the  contract.  3  They  are  in  the  main  good  wit- 
nesses of  the  law,  but  they  were  not  formerly  in  all  cases  the 
test  of  what  the  law  required  to  be  proved  on  the  trial. 

The  theory  in  relation  to  a  promissory  note  is  that  the 
drawer  has  received  a  sum  of  money  from  the  payee,  and 
promises  in  consideration  thereof,  to  repay  it  to  him  or  to  a 
person  whom  he  may  designate,  at  a  future  day.  The  indorse- 
ment by  the  payee  assigns  the  money  or  debt  to  the  indorsee, 
and  he  may  recover  on  it  in  his  own  name.  And  it  has  been 

1  Cruger  v.  Armstrong,  3  John.  Cas.,  5.  This  case  decides  it  to  be  the  duty 
of  the  bearer  to  use  diligence  to  obtain  the  money  on  the  check;  and  Barker 
v.  Anderson,  21  Wend.,  372,  decides  it  to  be  necessary  to  shew  presentment 
and  notice  of  non-payment ;  Murray  v.  Judah,  6  Cowen,  484. 

*  Shultz  v.  Depuy,  3  Abbott  Pr.  R.,  252;  4  Sand.  R.,  668. 

*  Andrews  v.  Herriat,  4  Cowen  R.,  508,  and  note.    The  distinction  between 
the  Ux  loci  and  lezfori  is  a  good  illustration  of  the  statement  in  the  text. 
And  it  is  plain  that  under  the  Code  it  must  be  frequently  necessary  for  the 
parties  to  prove  on  the  trial  facts  not  put  in  issue  by  the  formal  allegations 
and  denials  contained  in  the  pleadings. 


BILLS   OF  EXCHANGE  AND  PROMISSORY  NOTES. 

held  in  this  State,  under  the  old  forms  of  pleading,  that  the 
indorsee  of  a  negotiable  note  may  recover  thereon  against  the 
maker,  1  or  against  a  remote  indorser,  2  in  an  action  of  debt; 
proving  of  course  demand  and  notice  in  the  suit  against  the 
indorser. 

The  code,  dispensing  with  the  general  forms  and  technicali- 
ties and  fictions  heretofore  used  in  pleading,  prescribes  a  new 
system,  and  renders  it  incumbent  upon  the  parties  to  state  the 
facts  constituting  the  cause  of  action  or  defence.  In  place  of 
the  general  averments  formerly  made  by  the  plaintiff,  which 
often  concealed  instead  of  declaring  the  true  cause  of  action, 
he  is  now  required  to  state  specifically  the  facts  upon  which 
he  means  to  rely;  and  the  complaint  being  verified,  the  defend- 
ant is  bound  to  put  in  issue  the  very  facts  upon  which  his 
defence  is  founded.  3 

By  what  standard,  then,  are  the  parties  to  be  governed  in 
pleading  1  The  code,  abolishing  the  old  forms,  declares  that 
the  rules  by  which  the  sufficiency  of  the  pleadings  is  to  be 
determined,  are  those  prescribed  by  itself;  and  then  lays  down 
the  general  rule  that  the  parties  must  state  distinctly  and  in 
concise  language  the  facts  constituting  the  cause  of  action  and 
the  defence,  without  specifying  affirmatively  what  are  the 
requisites  of  good  pleading;  thus  tacitly  refering  the  pleader 
to  the  law  by  which  the  rights  of  the  parties  are  to  be  deter- 
mined, in  order  to  ascertain  what  facts  are  essential  to  create 
or  defeat  the  cause  of  action.  4  In  the  first  place  he  must 

1  Willmarth  v.  Crawford,  10  "Wend.,  341. 

8  Onondago  Co.  Bank  v.  Bates,  3  Hill  R.,  63.  The  ordinary  and  legal 
acceptation  of  the  term  debt  imports  a  sum  of  money  arising  upon  a  contract 
express  or  implied,  2  Hill,  223 ;  and  a  negotiable  note  or  bill  is  just  as  much  a 
debt  due  from  the  maker  or  acceptor  to  the  indorsee  thereof,  as  it  is  to  the 
payee  before  transfer ;  and  where  the  indorser  has  been  properly  charged  by 
demand  and  notice,  he  is  to  all  intents  and  purposes  indebted  thereon  to  the 
holder.  The  form  of  the  instrument  renders  the  debt  transferable.  Ketchell 
v.  Burns,  24  Wend.,  456. 

8  Gavey  v.  Fowler,  4  Sand.  R.,  665;  Stone  v.  De  Puga,  id.  681.  For  the 
reason  stated  in  the  text  the  defendant  is  not  permitted  to  setup  two  defences 
which  are  inconsistent  with  each  other,  one  of  which  from  its  nature  must  be 
within  his  own  knowledge,  Arnold  v.  Dimon,  4  Sand.,  680. 
,  *  Lord  v.  Chesebrough,  4  Sand.  R.,  696;  Lucas  v.  N,  T.  Central  R.  R.  Co., 
21  Barb.  R.,  245;  Brown  v.  Harman,  id.  508;  Budd  v.  Bingham,  18  Barb. 


PLEADINGS.  669 

determine  what  the  law  pronounces  a  good  cause  of  action  in 
the  case  presented :  this  done,  he  is  to  insert  in  his  complaint 
a  plain  statement  according  to  the  actual  transaction,  avering 
all  that  is  necessary  to  entitle  the  plaintiff  to  the  recovery  or 
relief  demanded  by  him.  i  In  like  manner  the  answer  must 
either  deny  the  allegations  of  the  complaint  generally,  or 
deny  some  material  allegations  therein;  and  must,  in  regard 
to  new  matter,  be  governed  by  the  same  rule  as  the  complaint.  2 
The  parties  are  not  required  to  use  either  technical  or  sci- 
entific language;  and  where  the  essential  facts  are  stated,  the 
allegations  on  either  side  are  to  be  liberally  construed,  with  a 
view  to  the  administration  of  substantial  justice  between  the 
parties.  3  Declaring  in  a  special  character,  as  the  receiver  of 

1  Howard  v.  Tiffany  and  al.,  3  Sand.  R.,  695. 

•  Wiggins  v.  Gans,  3  Sand.  R.,  738;  Wood  v.  Whiting,  21  Barb.  R.,  190; 
Elton  v.  Markham,  20  Barb.,  343.    As  to  counter-claims,  see  Ives  v.  Miller, 
19  id.  196.    Briggs  v.  Vanderbilt,  id.   222;  Baker  v.  Bailey,  16  id.  54;  14 
Barb.,  633. 

*  Code,  §  159;  Eno  v.  Woodworth,  4  Comst.  R..  249;  Decker  v.  Mathews, 
2  Kernan  R,,  313,  636;  Thatcher  v.  Morris,  1  Kernan  R.,  437,  may  be  taken 
as  an  illustration  of  the  rules  of  pleading.     The  plaintiffs  declared  against  the 
defendants  as  the  contractors  and  managers  of  certain  lotteries  authorized  by 
the  laws  of  Maryland,  alleging  that  they  were  authorized  to  sell  tickets  in 
such  lotteries  to  be  drawn  at  Baltimore ;  that  they  sold  tickets  to  divers  per- 
sons, and  that  there  was  a  drawing  of  the  lotteries  at  Baltimore,  and  that 
certain  tickets  specified  drew  prizes  amounting  to  $200.60;  that  afterwards 
the  plaintiff  for  a  good  consideration  purchased  the  tickets  which  drew  the 
prizes,  &c.    On  demurrer,  held  that  the  complaint  did  not  state  a  cause  of 
action  enforceable  in  the  courts  of  this  state.     It  did  not  state  where  the 
plaintiff  purchased  the  ticket.     "  The  instrument  purchased  was  a  part  of  the 
machinery  for  carrying  on  a  business  which  our  law  pronounces  a  common  and 
public  nuisance.    If  a  party  institutes  a  suit  in  the  courts  of  this  state,  upon 
a  contract  express  or  implied,  originating  in  such  a  source,  he  is  bound  to 
shew  on  the  face  of  the  complaint,  that  his  title  was  acquired  in  a  jurisdiction 
(that  is  to  say,  hi  a  state)  where  gambling  was  authorized  by  law." 

As  a  general  rule,  courts  give  effect  to  contracts  according  to  the  law  of  the 
place  where  they  are  made,  or  where  they  are  to  be  performed,  in  case  they 
are  to  be  performed  in  another  state.  In  Bowen  v.  Newell,  3  Kernan  R.,290, 


R.,  494,  29;  Richards  v.  Edick.  17  Barb.,  260;  id.  431;  Hall  v.  Southmayd, 
15  Barb.,  32;  id.  550,  365;  4  Comat.,  253;  13  Barb..  209;  12  id.  9,  433,  520, 
673;  11  id.  569. 


670  BILLS    OF  EXCHANGE  AND  PROMISSORY   NOTES. 

a  banking  institution,  or  as  the  administrator  of  a  deceased 
wife,  the  plaintiff  must  set  forth  the  facts  and  proceedings 
which  vest  him  with  the  cause  of  action,  i  If  the  suit  is 
brought  by  the  personal  representative,  for  damages  under  the 
statute,  against  the  defendant  for  causing  the  death  of  the  de- 
ceased by  his  wrongful  act,  neglect  or  default,  the  complaint 
must  state  all  the  facts  which  are  requisite  to  bring  the  case 
within  the  statute.  2  And  where  the  plaintiff  sues  on  a  pro- 
missory note,  as  receiver,  he  must  make  the  proper  averments 
to  shew  himself  entitled  to  recover  thereon;  but  if  he  omits 
an  essential  averment  which  is  supplied  by  the  answer  and 
reply,  he  will  be  entitled  to  recover  on  the  pleadings.  3 

Where  a  pleading  is  good  in  substance,  but  too  general  in 
its  terms,  the  remedy  is  by  a  motion  to  compel  the  party 
pleading  to  make  it  more  certain.  Thus,  if  the  answer  to  a 
complaint  on  a  promissory  note  alleges  that  it  was  given  by 
mistake  for  a  greater  sum  than  was  due  from  the  defendant  to 
the  payee,  and  the  plaintiif  replies  denying  the  allegations  in 
that  respect,  he  is  precluded  from  objecting  on  the  trial  to 
evidence  in  support  of  the  allegation.  4 

In  an  action  by  the  payee  against  the  maker  of  a  note,  it  is 
sufficient  to  aver  in  the  complaint  that  the  defendant  by  his 

1  21  Barb.,  245;  3  Kernan  R.,  83. 

2  Lucas  v.  N.  Y.  Central  R.  R.  Co.,  21  Barb.,  245.     Among  other  things,  it 
seeins  the  complaint  must  shew  that  there  are  next  of  kin,  for  whose  benefit 
the  action  is  brought.     See  also  Brown  v.  Harmon,  id.  508. 

3  White  v.  Joy,  3  Kernan  R.,  83.     The  complaint  in  this  case  was  defective 
in  not  stating  to  whom  the  note  was  payable,  and  though  it  averred  a  trans- 
fer to  the  plaintiff,  and  that  he  was  the  owner  and  holder  thereof;  Denio,  J., 
in  delivering  the  opinion  of  the  Court  of  Appeals  said,  "  if  the  complaint  had 
been  demurred  to,  we  should  have  been  obliged  to  give  judgment  for  the  de- 
fendant."   But  it  was  held  under  the  Code,  as  amended  in  1849,  that  the 
answer  and  reply  cured  the  defect  in  the  complaint. 

4 17  Barb.,  530;  Seeley  v.  Engell,  3  Kernan  R.,  542. 


it  was  held  that  a  check  drawn  in  New-York  on  the  5th  of  Oct.,  1849,  on  the 
Thompson  Bank  of  Connecticut,  payable  on  the  12th  instant,  was  to  be  gov- 
erned by  the  laws  of  that  state  in  respect  to  the  allowance  of  days  of  grace, 
notwithstanding  the  laws  of  Connecticut  are  different  from  those  of  New-York 
in  that  particular.  4  Selden  R.,  190;  2  Duer,  584. 


PLEADINGS. 

promissory  note  in  writing  promised  to  pay  the  plaintiff  or 
bearer  the  sum  named  therein,  and  has  not  paid  the  same,  but 
is  justly  indebted  to  the  plaintiff  therefor,  i  There  must  be  a 
delivery  of  the  note,  to  give  it  validity  in  the  hands  of  the 
payee;  but  this  form  of  allegation  implies  a  delivery.  2  It  is, 
however,  to  be  observed  that  the  form  used  in  England  for 
several  years  past,  alleges  that  the  defendant  "  made  his 
promissory  note  in  writing  and  delivered  the  same  to  the 
plaintiff."  3  And  it  is  perfectly  well  settled  that  a  promissory 
note  has  no  legal  inception  until  it  is  delivered  to  some  person, 
as  evidence  of  a  subsisting  debt.  4 

The  complaint  should  shew  on  its  face  that  the  note  is  due, 
so  that  it  may  appear  that  an  action  has  accrued  thereon. 
But  this  fact  need  not  be  alleged  in  express  terms;  5  it  is 
enough  if  it  appear  by  a  reasonable  implication  or  intendment. 
Indeed,  it  has  been  held  that  the  complaint  need  not  shew 
that  the  note  in  suit  had  become  due  at  the  commencement  of 
the  action,  and  that  a  demurrer  to  the  complaint  for  that  cause 
will  not  lie,  although  the  fact  proved  on  the  trial  will  be 
sufficient  to  defeat  the  action.  6  This  decision  is  placed  upon 
the  analogy  between  the  present  and  the  former  practice,  under 
which  it  was  not  necessary  that  the  declaration  should  state 
the  time  when  the  suit  was  commenced.  But  here  again,  the 
form  just  mentioned  describes  the  note  as  payable  days 

1  Peets  v.  Bratt,  6  Barb.  R.,  662. 

9  Churchill  v.  Gardner,  7  Term  R.,  696;  Chamberlain  v.  Hopps,  8  Verm. 
R,  94. 

8  Chitty  on  Bills,  552.  The  rules  of  pleading  under  the  code  are  closely 
analogous  to  those  prescribed  by  rule  of  court,  adopted  in  England  in  1831 ; 
Garvey  v.  Fowler,  4  Sand.  R..  667. 

4  Marvin  v.  M'Cullum,  20  John.  R.,  288.  "Merely  writing  and  signing  a 
note,  and  retaining  it  in  the  hands  of  the  drawer,  forms  no  contract."  Powell 
v.  Waters,  8  Cowen,  669;  7  id.  336;  Bank  of  Rutland  v.  Buck,  5  Wend.,  66. 

*  6  Barb.,  662.    An  allegation  that  the  defendant  by  his  note  in  writing 
promised  to  pay  the  plaintiff  a  given  sum,  without  stating  any  time  of  pay- 
ment, shews  that  the  note  is  due  immediately,  8  John.,  189;  Gaylord  v.  Van 
Loan,  15  Wend.,  310. 

•  Maynard  v.  Talcott,  11  Barb.  R.,  569;  Pugh  v.  Robinson,  1  TermR.,  116, 
Owen  v.  Waters,  2  Mees.  and  W.,  91;  Lester  v.  Jenkins,  8  Barn,  and  Cress.; 
239. 


672  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

or  months  after  date,  and  then  adds, "  which  has  now  elapsed  •" 
thus  assuming  it  to  be  incumbent  upon  the  plaintiff  to  state  a 
cause  of  action  that  has  accrued.  But  that  averment  in  the 
declaration  has  been  held  sufficient  since  the  passage  of  the 
act  which  makes  the  issuing  of  the  writ  the  commencement  of 
the  action;  i  and  as  our  code  makes  the  service  of  the  sum- 
mons the  commencement  of  the  action,  there  is  some  authority 
for  saying  that  the  complaint  need  not  shew  explicitly  that 
the  note  became  due  before  the  action  was  commenced.  2 

When  the  complaint  shews  on  its  face  that  the  action  is 
prematurely  commenced,  it  is  clear  that  the  defendant  may 
take  advantage  of  it  by  the  demurrer;  3  and  it  is  conceded 
that  though  he  does  not  demur,  he  may  prove  the  fact  on  the 
trial,  and  that  it  will  be  a  good  defence,  notwithstanding  it 
doos  not  appear  on  the  face  of  the  complaint.  4 

We  have  already  stated  that  in  an  action  against  the  maker 
of  a  promissory  note  or  the  acceptor  of  a  bill  of  exchange, 
payable  at  a  particular  time  and  place,  it  is  not  necessary  for 
the  plaintiff  to  aver  in  his  complaint  a  demand  and  refusal  at 
the  time  and  place  of  payment  named  in  the  instrument;  and 

1  Owen  v.  Waters,  2  Mees.  and  "Wels.,  91;  action  on  a  bill  of  exchange  by 
the  drawer  against  the  acceptor.  The  declaration  alleged  that  the  bill  was 
made  on  the  29th  of  March,  payable  four  months  after  date,  "  which  period 
has  now  elapsed."  Held  that  the  declaration  was  sufficient,  and  that  it  was 
not  necessary  to  aver  that  four  months  had  elapsed  "  before  the  commence- 
ment of  the  suit."  The  rule  of  court  adopting  the  forms  of  declaration  on 
bills  and  notes  was  made  in  1831 ;  and  under  that  rule  the  plaintiff  had  a 
right  to  treat  the  declaration  as  the  commencement  of  the  action ;  but  the 
Uniformity  of  Process  Act,  2  Wm.  4,  ch.  39,  adopted  afterwards,  made  the 
issuing  of  the  writ  the  commencement  of  the  action,  and  the  case  of  Owen  v. 
"Waters  was  decided  subsequent  to  the  latter  statute. 

2  Byles  on  Bills,  338,  takes  it  for  granted  that  the  plaintiff  must  state  a 
cause  of  action  existing  at  the  commencement  of  the  suit.     And  nothing 
could  be  more  explicit  than  the  language  of  the  code,  that  the  plaintiff  must 
state  facts  constituting  a  cause  of  action,  which  he  does  not  do,  unless  he  shews 
that  the  note  is  due  and  payable.     Besides,  the  code  is  a  statute  law,  with 
which  it  is  generally  supposed  the  court  cannot  take  so  much  liberty  as  with 
their  own  rules  of  pleading. 

3  3  John.  R.,  42;  Lowry  v.  Lawrence,  1  Caines,  69;  Waring  v.  Tates,  10 
John.  R.,  119. 

*  11  Barb.  R.,  569. 


PLEADINGS.  673 

that  it  lies  with  the  defendant  in  such  cases  to  allege  and 
prove,  as  a  matter  of  defence,  that  he  was  ready  at  the  time 
and  place  appointed;  pleading  as  he  would  in  the  case  of  a 
tender,  in  bar  of  damages  and  costs,  i 

Substantially  the  same  rules  of  pleading  apply  in  an  action 
against  the  acceptor  of  a  bill,  as  in  an  action  against  the 
maker  of  a  promissory  note;  for  each  of  them  is  the  party 
primarily  liable  on  the  instrument,  which  is  in  both  cases  an 
instrument  for  the  payment  of  money  only.  2 

There  need  be  no  difference  between  a  complaint  in  favor 
of  the  payee  of  a  note  or  bill,  and  a  complaint  in  favor  of  the 
indorsee,  except  that  in  the  latter  case  there  should  be  an 
allegation  showing  a  transfer  or  indorsement  of  the  paper  to 
the  plaintiff. 

On  a  note  payable  to  a  particular  person  or  bearer,  it  ap- 
pears to  be  sufficient  for  the  plaintiff  to  allege  the  making  and 
delivery  of  the  note  to  the  payee,  and  that  the  plaintiff  is  now 
the  lawful  holder  and  owner  of  the  note,  stating  as  usual  the 
amount  due  upon  it.  3  The  allegation  that  the  plaintiff  is  the 
lawful  holder  and  owner  of  the  note,  implies  that  it  has  been 
transfered  to  him  ;  but  it  would  be  more  technically  cor- 
rect to  aver  the  making  and  delivery  of  the  note  to  the 
payee,  and  that  it  has  been  indorsed  or  transfered  to  the 
plaintiff.  But  in  either  case,  the  note  being  negotiable  by 
delivery  merely,  the  production  of  it  by  the  plaintiff  in  court 
is  prima  facie  evidence  that  he  is  the  owner  of  it.  4 

When  an  indorsee  brings  an  action  against  the  maker  or 
acceptor  of  a  note  or  draft  payable  to  a  particular  person  or 
order,  it  is  manifest  that  the  complaint  should  shew  that  the 
payee  indorsed  the  paper,  and  that  it  was  transfered  to  the 
plaintiff;  the  indorsement  here  is  essential  to  convey  the 
instrument  as  negotiable  paper. 

1 17  John.  R.,  249:  8  Cowen  R.,  271;  see  authorities  before  cited. 

4  Chappell  v.  Bissell,  10  How.  Pr.  R.,  274;  Andrews  v.  The  Astor  Bankr2 
Duer  R.,  629;  Woodbury  v.  Sackinder,  2  Abbott's  Pr.  R.,  402. 

8  Seeley  v.  Engell.  17  Barb.  R.,  530.  The  decision jwas  reversed  on  appeal, 
on  a  question  of  evidence.  3  Kernan  R.,  642. 

4  Smith  v.  Schanck,  18  Barb.  R.,  344-,  2  Selden  R,,  209. 


674  BILLS   OF  EXCHANGE  AND   PROMISSORY  NOTES. 

In  a  complaint  against  an  indorser,  or  against  the  drawer 
of  a  bill,  draft  or  check,  the  plaintiff  must  aver,  as  in  other 
cases,  the  facts  shewing  his  title  and  right  to  sue,  and  the  facts 
necessary  to  convert  the  defendant's  conditional  undertaking 
into  an  absolute  liability,  i  What  these  facts  are  has  been 
considered  at  length- in  former  chapters.  Against  an  indorser, 
it  is  necessary  to  allege  the  making  of  the  note  or  bill,  describ- 
ing it  according  to  its  legal  effect  or  giving  a  copy  thereof;  that 
the  defendant  indorsed  the  same  to  the  plaintiff,  or  to  a  prior 
party  through  whom  he  derives  title;  that  the  same  was  duly 
presented  to  the  maker  or  acceptor  for  payment  wThen  the  same 
became  due,  and  dishonored ;  and  that  the  defendant  was  duly 
notified  of  the  dishonor.  2  Demand  and  notice,  being  conditions 
precedent,  may  be  alleged  in  the  manner  specified  by  the  code.  3 

1  Among  the  forms  adopted  by  the  English  rule  of  Court,  cited  above,  is  the 
following  count  on  a  promissory  note,  in  assumpsit,  by  the  indorsee  against 
an  indorser. 

"  Whereas  one  C.  D.  on  at  London,  (or  in  the  county 

of  )  made  his  promissory  note  in  writing,  and  thereby  promised  to 

pay  X.  Y.  or  order  £ ,  •  days  (of  weeks,  or  months,)  after  the  date 

thereof,  (01  as  the  case  may  be,)  which  period  has  now  elapsed,  and  then  and 
there  delivered  the  said  note  to  the  said  X.  Y.,  and  the  said  X.  Y.  then  and 
there  indorsed  the  same  to  the  defendant,  and  the  defendant  then  and  there 
indorsed  the  same  to  the  plaintiff,  (or,  and  the  defendant  then  and  there 
indorsed  the  same  to  Q.  R.,  and  the  said  Q.  R.  then  and  there  indorsed  the 
same  to  the  plaintiff.)  And  the  said  C.  D.  did  not  pay  the  amount  thereof, 
although  the  same  was  there  presented  to  him  on  the  day  when  it  became  due, 
of  all  which  the  defendant  then  and  there  had  due  notice." 

Count  against  the  drawer  for  non-acceptance. 

"  Whereas  the  defendant,  on  at  London,  (or  in  the  county 

of  )  made  his  bill  of  exchange  in  writing,  and  directed  the  same  to 

J.  K.,  and  thereby  required  the  said  J.  K.  to  pay  to  the  plaintiff  £ , 

days  (or  weeks,  or  months.)  after  the  sight  (or  date)  thereof,  and  then 

and  there  delivered  the  same  to  the  said  plaintiff,  and  the  same  was  then  and 
there  presented  to  the  said  J.  K.  for  acceptance,  and  the  said  J.  K.  then  and 
there  refused  to  accept  the  same,  of  all  which  the  defendant  then  and  there 
had  due  notice."  Chitty  on  Bills,  552. 

a  Van  Santvoord's  PL,  228,  2d  ed.  The  words  of  the  Code  are:  "  In  plead- 
ing the  performance  of  conditions  precedent  in  a  contract,  it  shall  not  be 
necessary  to  state  the  facts,  shewing  such  performance ;  but  it  may  be  stated 
generally,  that  the  party  duly  performed  all  the  conditions  on  his  part;  and 
if  such  allegation  be  controverted,  the  party  pleading  shall  be  bound  to 
establish  on  the  trial,  the  facts  shewing  such  performance."  §  162. 

3  Gay  v.  Paine,  5  How.  Pr.  R..  107.     On  an  "  instrument  for  the  payment 


PLEADINGS.  673 

Formerly  the  plaintiff  was  allowed  to  shew  facts  excusing 
demand  and  notice  under  an  averment  that  the  demand  was 
made  and  the  notice  given;  but  it  has  been  held  under  the 
code  that  the  plaintiff  must  plead  specially  the  facts  dispen- 
sing with  the  demand  or  notice,  i  And  the  decision  is  well 
sustained  by  both  reason  and  authority;-'  for  there  is  no 
propriety  in  allowing  the  plaintiff  to  allege  that  a  due  demand 
has  been  made,  or  a  due  notice  given,  when  he  intends  to 
prove  on  the  trial  that  neither  was  necessary,  and  make  that 
the  ground  of  his  action.  But  where  the  plaintiff  intends  to 
rely  upon  a  subsequent  promise  to  pay,  as  presumptive  evi- 
dence of  demand  and  notice,  he  should  undoubtedly  aver  the 
facts  which  he  expects  to  prove.  3  Thus,  if  the  plaintiff  in 
an  action  against  the  drawer  of  a  check,  seeks  to  recover  on 
the  ground  that  the  defendant  drew  on  a  bank  where  he  had 
no  funds,  he  should  aver  the  fact,  and  thereby  take  from  the 
drawer  the  right  to  insist  upon  the  want  of  demand  and 
notice.  4  And,  if  he  intends  to  recover  against  the  drawer  of 
a  bill  because  he  has  countermanded  the  payment  thereof,  he 
should  aver  that  fact,  thus  shewing  that  the  drawer  could  not 
be  injured  by  the  want  of  notice.  So  where  he  relies  upon  a 
waiver  of  laches,  his  complaint  should  be  framed  so  as  to 
state  his  real  cause  of  action.  On  the  other  hand,  where  he 
intends  to  shew  demand  and  notice,  whether  by  direct  or 
indirect  evidence;  or  where  he  expects  to  prove  that  the 
notice  was  given  with  reasonable  diligence,  though  too  late  in 

1  Williams  v.  Matthews,  3  Cowcn,  252;  Kenon  v.  McRea,  7  Porter  175j 
Taunton  Bankv.  Richardson,  6  Pick.,  436. 

8  Garvey  v.  Fowler,  4  Sand.  R.,  665;  Burgh  v.  Legge,  5  Mees.  &  Wels., 
418;  Byleson  Bills,  337. 

1  Hicks  v.  Duke  of  Beaufort,  4  Bing.  N.  C.,  229 ;  5  Scott,  593 ;  7  East,  231. 

4  4  SandR.,  665. 

of  money  only,"  it  is  enough  to  give  a  copy  of  it,  and  state  the  amount  due  to 
the  plaintiff  thereon;  but  an  action  against  an  indorser  is  founded  on  the 
instrument  and  certain  extrinsic  facts  are  necessary  to  be  averred  and  proved. 
Alden  v.  Bloomingdale,  1  Duer  R.,  601;  Bank  of  Geneva  v.  Gulick,  8  How. 
Pr.  R.,  61 ;  6  Id.,  420;  5  Id.,  107.  Contra,  Roberts  v.  Morrison,  11  Leg.  Ob. 
60. 


676  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

the  usual  course,  it  is  proper  to  make  the  usual  averment 
of  due  presentment  and  notice,  i 

It  results  from  what  has  been  said,  that  in  all  actions  upon 
negotiable  paper,  the  answer  must  traverse  some  matter  of 
fact,  such  as  the  drawing,  or  making,  or  indorsing,  or  accept- 

1  4  Bing.  N.  C.,  229;  Carter  v.  Flower,  16  M.  and  W.,  749.  The  following 
cases  decided  in  England,  under  the  new  rules  of  pleading,  may  serve  to 
illustrate  the  subject  in  hand  : 

Hine  v.  Alleley,  4  Barn,  and  Adol.,  624,  decided  in  1833.  Action  by  in- 
dorsees against  the  drawers  of  a  bill  of  exchange,  drawn  upon  Mr.  Peter 
Perry,  No.  6  Budge  Row,  Watling  street,  and  accepted  by  the  drawee;  and 
under  an  averment  that  the  bill,  when  due,  was  presented  and  shewn  to  Peter 
Perry  for  payment,  it  was  held  the  plaintiff  might  prove  that  he  went  to  No. 
6,  Budge  Row,  to  present  it,  but  found  the  house  shut  up  and  no  one  there. 

Hunt  v.  Massey,  5  id.  902,  decided  in  1834;  action  by  the  drawer  against 
the  acceptor  of  a  bill,  dated  Feb.  1,  1832,  payable  five  months  after  date. 
The  defendant  having  proved  that  he  was  under  age  when  he  accepted  the 
bill,  the  plaintiff  introduced  in  evidence  a  letter  in  the  defendant's  hand- 
writing purporting  by  its  date  to  have  been  written  after  he  came  of  age,  and 
addressed  to  a  third  person,  in  these  words  :  "  I  request  you  to  pay  H.  (the 
plaintiff,)  1011  at  your  earliest  convenience  after  the  date  of  this  letter,  from 
money  left  me  by  my  late  grandfather,  for  which  I  have  given  my  bill;"  and 
it  was  proved  that  this  letter  was  given  to  plaintiff's  clerk.  Held,  that  the 
letter  must  be  taken  to  have  been  written  at  the  time  of  its  date,  and  that 
having  been  written  after  the  defendant  came  of  age,  and  before  the  bill 
became  due,  it  would  support  a  count  on  a  promise  to  pay  according  to  the 
tenor  and  effect  of  the  bill. 

Bancks  v.  Camp,  9  Bing.  R.,  604,  decided  in  1833.  The  averment  was  that 
the  defendant,  on  &c.,  made  his  promissory  note  in  writing  and  delivered  the 
same  to  the  plaintiff,  and  thereby  promised  to  pay  the  plaintiff  14  days  after 
the  date  thereof  10Z  on  account  of  Capt.  W.  H.  D.,  which  period  had  now 
elapsed ;  and  the  defendant  in  consideration  of  the  premises  then  and  there 
promised  to  pay  the  amount  to  the  plaintiff,  according  to  the  tenor  and  effect 
thereof.  Held  sufficient  on  special  demurrer. 

Schield  v.  Kilpin,  8  Mees.  and  Wels.,  673,  decided  in  1841.  To  an  action 
by  indorsee  against  acceptor  of  a  bill  of  exchange,  the  defendant  pleaded  that 
after  the  indorsement  to  the  plaintiff  and  before  the  commencement  of  the 
suit,  to  wit,  on  &c.,  the  plaintiff,  for  a  good  and  valuable  consideration, 
indorsed  the  bill  to  J.  W.,  who  from  thence  and  at  and  after  the  commence- 
ment of  this  suit,  was  and  still  is  and  remains  the  indorsee  and  holder  thereof, 
and  the  defendant  from  the  time  of  such  indorsement  to  the  said  J.  W.,  con- 
tinually hitherto  hath  been  and  still  is  liable  to  pay  the  amount  of  the  bill  to 
the  said  J.  W.  Replication,  de  injuria.  Held,  on  special  demurrer,  that  the 
plea  was  in  denial,  not  in  excuse,  of  the  breach  alleged  in  the  declaration 
namely,  the  non-payment  of  the  bill  according  to  the  tenor  and  effect  of  the 
acceptance,  and  therefore  that  the  replication  was  improper. 


PLEADINGS.  677 

ing,  or  presenting,  or  notice  of  dishonor;  and  that  new  mat- 
ters in  confession  and  avoidance  must  be  pleaded  specially,  i 

Negotiable  notes,  bills  of  exchange  and  checks  are  pre- 
sumed to  have  been  made,  indorsed  or  accepted  for  valid  con- 
sideration; and  hence  the  holder  suing  on  either  of  them,  is 
not  bound  to  allege  or  prove  a  consideration  for  the  making, 
indorsement  or  acceptance  of  the  instrument.  2  But  where  a 
promissory  note  is  not  negotiable,  as  where  it  is  payable  in 
specific  articles  and  therefore  not  within  the  statute,  a  con- 
sideration must  be  alleged  and  proved  on  the  trial :  if  it 
purport  to  have  been  given  "  for  value  received,"  it  is  enough 
to  aver  generally  that  it  was  so  given,  and  these  words  will 
be  prima  facie  evidence,  on  the  trial,  of  a  consideration.  3 
And  if  the  plaintiff  aver  particularly  the  consideration  for 
which  the  note  was  given,  he  will  be  under  the  necessity  of 
proving  the  averment  as  made.  So  if  the  plaintiff  sues  as  the 
assignee  of  such  a  note,  he  must  aver  a  transfer  for  value, 
and  state  the  amount  due  thereon.  4 

We  have  seen  in  a  former  chapter  that,  as  between  the 
original  parties  to  negotiable  paper,  the  consideration  may  be 
inquired  into  and  impeached,  as  effectually  as  though  the 
contract  were  not  negotiable;  but  that  the  want  or  failure  of 
consideration  is  no  defence  to  an  action  brought  by  one  who 
has  taken  the  same  before  due,  in  good  faith,  and  for  value.  5 
It  follows  that  the  defendant  who  intends  to  attack  the  con- 

I  Byles  on  Bills,  339. 

I 1  Denio,  116;  9  Wend.,  273;  13  id.  557;  9  John.  R.,  217;  Van  Santvoord'n 
PI.,  219-221. 

1  Jerome  v.  Whitney,  7  John.  R.,  321;  but  it  will  not  do  to  describe  the 
note  as  given  "  for  value  received,"  unless  it  contains  those  words,  Saxton  v. 
Johnson,  10  John.  R.,  418. 

4Leev.  Swift,  1  Denio,  565;  see  also  the  Code  requiring  every  cause  of 
action  to  be  brought  in  the  name  of  the  real  party  hi  interest.  21  Barb.  R., 
241. 

Under  the  old  practice,  a  note  for  the  payment  of  money  not  negotiable, 
and  a  note  for  the  payment  of  a  sum  certain,  in  land  or  lumber,  was  permitted 
to  be  given  in  evidence  under  the  money  counts,  on  proving  the  maker's  de- 
fault. 4  Wend.,  575;  2  John.  R.,  235;  7  Wend.,  311;  6  Cowen,  151. 

*  See  chapter  on  "  Consideration." 


678  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

sideration  for  which  the  paper  was  given,  indorsed  or  accepted, 
in  an  action  brought  thereon  by  a  third  person,  must  not  only 
allege  the  facts  impeaching  the  consideration,  but  must  also 
shew  that  the  plaintiff  took  the  note  or  bill  with  notice,  or 
after  the  same  became  due,  or  that  he  did  not  part  with  value 
for  the  same,  i  But  where  the  statute  declares  a  note  or  bill 
void,  it  is  a  sufficient  answer  to  allege  the  facts  bringing  it 
within  the  terms  of  the  statute.  2 

The  defendant  must  set  forth  in  his  answer,  facts  and  cir- 
cumstances which  amount  to  a  good  defence  in  law :  if  the 
action  be  brought  by  the  indorsee  against  him  as  the  maker  of 
a  note,  given  by  him  for  the  accommodation  of  the  payee,  he 
must  state  not  only  that  it  was  so  given,  but  also  facts  shew- 
ing his  right  to  interpose  a  defence;  as  that  it  was  made  and 
delivered  for  a  special  purpose  and  transfered  to  the  plaintiff 
with  knowledge  of  the  premises  and  in  violation  of  the  con- 
ditions upon  which  it  was  made.  3  Tor,  where  a  note  is  made 
for  the  accommodation  of  the  payee  without  any  stipulation 
as  to  the  manner  in  which  it  is  to  be  used,  he  is  authorized  to 
use  it  as  he  sees  fit.  4 

In  the  case  of  accommodation  paper,  there  is  between  the 
original  parties  a  total  want  of  consideration.  But  there  is 
another  class  of  cases  in  which  the  consideration  fails,  either 
totally  or  partially;  as  where  a  promissory  note  is  given  by 
the  maker  for  the  purchase  money  of  lands  conveyed  to  him 
by  a  deed  with  warranty,  and  the  title  to  the  premises  fails; 5 
or  where  a  note  is  given  to  the  master,  upon  his  promise  to 
manumit  a  slave,  which  he  utterly  omits  to  do; 6  or  where  a 

>3  Barb.,  149;  12  John  R., 343;  5Wend.  600;  24Id.  97;  11  John  R., 128; 
1  Denio,  583;  20  John.  R.,  637;  6  Hill  R.,  93;  1  Sand.  R.,  53;  2  Id.,  115; 
23  Wend.,  311;  2  Hill,  301. 

8  Vallette  v.  Parker,  6  Wend.,  615;  Rockwell  v.  Charles,  2  Hill,  499. 

*  Beers  v.  Culver,  1  Hill  R.,  589;  Miller  v.  Gambie,  4  Barb.  R.,  146. 

4  Seneca  Co.  Bank  v.  Neass,  5  Denio,  329;  S.  C.  3  Corns.,  442. 

5 11  John.  R.,  51;  4  Wend.,  483;  In  Lattin  v.  Vail  and  others,  it  was  held 
no  defence  to  an  action  on  a  promissory  note  that  it  was  given  as  part  con- 
sideration of  land  sold  by  the  payee  under  a  covenant  that  it  was  free  from 
incumbrances,  and  that  the  land  is  subject  to  a  mortgage,  executed  by  him, 
for  a  sum  exceeding  the  amount  of  the  note.  17  Wend.,  188. 

"19  John  R.,  53. 


EVIDENCE.  679 

note  is  given  upon  a  sale  of  personal  property  under  a  war- 
ranty of  its  soundness,  or  such  false  representations  as  will 
entitle  the  vendee  to  recover  damages  thereon  against  the 
vendor,  i  In  these  and  like  cases,  the  maker  of  the  note, 
when  the  action  is  brought  by  the  payee,  may  interpose  his 
defence  with  the  same  effect  as  if  the  action  were  brought  for 
the  consideration  of  the  note;  but  he  must  plead  his  defence.  2 
When  the  action  is  brought  by  an  indorsee  or  other  third 
person  not  named  in  the  note,  it  is  presumed  until  the  con- 
trary is  shewn,  that  he  took  it  in  the  usual  course  of  negoti- 
ating commercial  paper;  and  as  a  general  rule  the  maker 
cannot  shew  any  equities  existing  between  himself  and  the 
payee,  until  he  has  first  impeached  the  plaintiff's  title  by 
shewing  that  he  either  took  the  note  when  it  was  over  due, 
that  he  paid  no  consideration  for  it,  or  that  he  took  it  with 
notice  of  the  facts  which  are  set  up  as  a  defence.  3  For  this 
reason  it  is  clear  that  the  defendant  must  set  forth  in  his 
answer  a  good  defence  against  the  payee,  and  such  further 
facts  as  will  entitle  him  to  interpose  the  defence  against  the 
plaintiff  in  the  action.  4 

II.  EVIDENCE: 

As  a  general  rule  the  pleadings  shew  what  the  plaintiff 
must  prove  to  maintain  his  action,  and  what  the  defendant 
must  prove  to  establish  his  defence.  When  a  single  fact  is 
put  in  issue,  such  as  the  making  of  the  note,  or  the  acceptance 
of  the  bill  in  suit,  one  party  holds  the  affirmative  and 
the  other  the  negative;  and  the  entire  evidence  is  direct- 
ed to  the  proof  or  disproof  of  that  fact.  But  when  the 

1  Payne  v.  Cutler,  13  Wend.,  605. 

'  Idem. 

•Nelson  v.  Cowing,  6  Hill  R.,  336. 

*  The  presumptions  are  all  in  favor  of  the  holder  of  negotiable  paper:  prima 
facie  the  party  in  possession  is  a  bona  fide  holder  for  value,  and  the  owner  of 
the  paper;  and  this  presumption  is  so  strong,  that  though  the  pleadings  put 
the  title  in  issue,  it  will  not  be  overcome  by  proof  that  the  plaintiff  acquired 
the  note  after  due.  James  v.  Chalmers,  2  Selden,  209;  Catlin  v.  Hansen,  1 
Duer,  Superior  Ct.  Rep.,  309,  and  cases  there  cited. 


680  BILLS   OF  EXCHANGE   AND    PROMISSORY  NOTES. 

answer  contains  a  general  denial  of  the  allegations  in  the 
complaint,  the  plaintiff  must  prove  the  bill  or  note  and  the 
facts  which  he  has  alleged,  shewing  his  right  to  recover; 
and  the  defendant  is  at  liberty  to  disprove  any  material  aver- 
ment contained  in  the  complaint. 

An  immaterial  averment  need  not  be  proved.  Thus,  in  an 
action  against  the  drawer  or  indorser  of  a  bill  for  non-pay- 
ment, the  plaintiff  need  not  prove  an  allegation  that  the  bill 
was  accepted,  unless  that  be  necessnry  to  shew  the  dishonor  of 
the  bill,  i  And  where  the  action  is  brought  against  an  accep- 
tor, the  plaintiff  need  not  prove,  though  he  has  alleged,  a 
presentment  at  the  time  and  place  specified  in  the  acceptance.  2 

In  an  action  by  the  payee,  against  the  maker  of  a  negotia- 
ble note,  or  the  acceptor  of  a  bill  of  exchange,  it  is  ordinarily 
enough  to  produce  the  instrument  and  prove  the  signature  of 
the  defendant,  and  the  amount  due  thereon.  If  the  action  be 
against  several  acceptors  of  a  bill  or  makers  of  a  note,  the 
handwriting  of  each  must  be  proved;  unless  the  defendants 
are  sued  as  partners  on  a  note  signed  or  on  a  bill  accepted  in 
the  name  of  the  firm,  in  which  case  it  must  be  shewn  that  the 
defendants  were  partners,  and  that  the  note  or  acceptance  was 
so  made  or  given  by  one  of  the  firm.  3  But  where  the  action  is 

1  Tanner  v.  Bean,  4  Barn,  and  Cress,,  312.    The  bill  in  this  case,  which  was 
an  action  by  an  indorsee  against  his  indorser,  must  have  been  payable  a  cer- 
tain time  after  date ;  for  it  was  urged  on  the  argument  that  the  plaintiff  was 
bound  to  prove  the  acceptance,  as  alleged,  although  the  allegation  was  unne- 
cessary.   Abbott,  C.  J.:  "  The  holder  of  a  bill  is  not  bound  to  present  it  for 
acceptance  before  it  becomes  due.  and  we  are  of  opinion  that  the  allegation  of 
acceptance  is  not  in  the  nature  of  a  description  of  the  instrument.     The  accep- 
tance  or  non-acceptance  does   not  vary  the  responsibility  of  the  indorser 
appearing  on  the  declaration;  it  is  at  all  events  his  duty  to  pay  the  bill  when 
due,  if  the  prior  parties  do  not.    The  averment  of  acceptance  was,  therefore, 
immaterial,  and  the  plaintiff  was  not  bound  to  prove  it." 

2  Freeman  v.  Kennell,  cited  by  Chitty  on  Bills,  625. 

3  Porter  v.  Cummings  and  others,  7  Wend.,  172.    The  note  sued  on  in  this 
case  was  signed  by  Adams  and  Thorp,  and  S.  Cummings,  and  though  the 
allegation  in  the  complaint  was  that  the  defendants  made  their  promissory 
note  in  writing,  tlieir  own  proper   hands  being    thereunto   subscribed,  the 
plaintiff  was  allowed  to  prove  that  Adams  and  Thorp  were  partners,  and  that 
their  signature  at  the  note  was  in  the  handwriting  of  Thorp. 


EVIDENCE.  681 

brought  against  the  members  of  a  partnership,  on  a  note  given 
by  one  of  them  in  the  name  of  the  firm,  for  his  individual 
debt,  it  is  incumbent  upon  the  payee  and  plaintiff  in  the  suit 
to  shew  that  the  other  partners  assented  to  the  giving  of  the 
note;  for  the  law  does  not  presume  their  assent,  as  it  does 
when  one  of  them  gives  notes,  draws  bills,  or  makes  acceptan- 
ces in  the  usual  course  of  business,  i 

On  the  same  principle,  when  the  action  is  brought  against 
the  defendant  on  a  note  made,  or  on  an  acceptance  given  by 
an  agent,  it  rests  with  the  plaintiff  to  prove  the  execution  of 
the  contract,  and  the  agent's  authority  to  bind  his  principal.  2 
The  authority  being  established,  it  is  enough  to  shew  that  the 
signature  is  in  the  hand  writing  of  the  agent.  3 

In  an  action  against  the  makers  of  a  joint  and  several 
promissory  note,  it  is  incumbent  upon  the  plaintiff  to  prove 
that  it  was  made  by  the  parties  described  in  the  complaint  as 
makers  of  the  note;  and  if  it  appears  on  the  trial  that  the 
note  was  made  in  the  manner  alleged,  and  that  the  payee 
afterwards,  without  consent  of  the  makers  signed  his  own 
name  under  theirs  and  then  transfered  it,  the  plaintiff  it  seems, 
cannot  recover :  the  instrument  proved  is  not  the  same  which 
the  defendants  executed,  and  the  alteration  makes  it  operate 
differently  from  the  original  contract  and  is  therefore  mate- 
rial. 4  Whether  the  addition  of  a  new  name  under  that  of 
the  maker  of  an  individual  note,  without  his  consent,  is  to  be 
considered  a  material  alteration  that  will  discharge  the  first 
maker,  does  not  appear  to  have  been  decided.  But  it  is  well 
settled  that  a  note  beginning,  "  I  promise  to  pay,"  and  signed 

1  Wardell  v.  Hughes,  3  Wend.,  418. 

*  Johnson  v.  Mason,  1  Esp.  R.,  90. 

•Helmsley  v.  Loader,  2  Campb.,  450;  Chitty  on  Bills,  627;  Boothe  v. 
Grove,  M.  and  M.,  182;  3  C.  and  P.,  335. 

4  Gardiner  v.  Walsh,  32  Eng.  Law  and  Eq.  R.,  162;  Chappell  v.  Spencer, 
23  Barb.  R.,  684;  Bank  of  Limestone  v.  Phiney,  5  Monroe,  25.  A  joint 
indebtness  must  be  shewn,  Mott  v.  Petrie,  15  Wend..  317..  As  to  what  are 
material  alterations,  it  has  been  held  in  this  state  that  inserting  a  place  cf 
payment,  19  John.  R.,  391,  24  Wend.,  374,  or  negotiable  words,  3  Barb.,  374, 
without  procuring  the  consent  of  the  parties  to  the  instrument,  is  a  material 
alteration  that  vitiates  the  note. 

41 


682  BILLS    OF   EXCHANGE  AND  PROMISSORY  NOTES. 

by  two  persons  is  a  joint  and  several  note.  1  The  several 
contract  of  the  maker  with  the  payee  or  subsequent  holder 
is  not  altered  in  any  respect  by  the  act  of  a  third  person 
signing  his  name  under  that  of  the  previous  makers  without 
their  consent;  but  the  joint  contract  is  made  to  operate  in  a 
different  manner.  2 

1  Galway  v.  Mathew,  1  Campb.,  403;  S.  C.,  10  East,  264;  March  v.  Ward, 
Peake's  Rep.,  130;  Clerk  v.  Blackstock,  Holt  N.  P.  C.,  474.  A  note  drawn 
iu  the  same  form  and  signed  by  one  of  a  firm  for  the  concern  is  the  joint  note 
of  all.  Doty  v.  Smith,  11  John.  R.,  543;  see  also  Hemmenway  v.  Stone,  7 
Mass.,  58;  Barnet  v.  Skinner,  2  Bailey,  88. 

\Bank  of  Limestone  v.  Penick,  5  Monroe,  25,  (1827.)  Where  two  per- 
sons execute  a  joint  and  several  note,  their  names  being  inserted  in  the  body 
of  the  instrument,  and  the  same  is  delivered  in  that  form  as  their  contract, 
and  the  payee  inserts  in  the  body  of  the  note  the  name  of  a  third  maker,  who 
also  adds  his  name  under  theirs,  the  alteration  is  material,  and  the  note  is 
void  as  to  them,  unless  they  assent  to  the  transaction. 

Pulliam  v.  Withers,  8  Dana  R.,  98,  (1839.)  Where  one  person  made  his 
note  payable  to  another,  and  after  the  same  became  due,  a  third  person,  a 
friend  of  the  maker,  without  having  any  consultation  with  him,  signed  his 
own  name  under  that  of  the  maker,  on  an  agreement  indorsed  on  the  note  as 
follows:  "  This  note  is  not  to  be  paid  until  the  expiration  of  three  years  from 
this  date,  the  llth  April,  1835."  Very  slight  evidence  of  assent  on  the  part 
of  the  first  maker  was  allowed  to  prevent  the  alteration  from  prejudicing  the 
payee  of  the  note.  There  was  in  this  case  no  interlineation  or  change  made 
in  the  body  of  the  note,  a  circumstance  which  is  specially  mentioned  in  the 
opinion ;  and  the  court  did  not  decide  whether  the  adding  of  the  new  name 
without  consent  of  the  first  maker  was  a  material  alteration.  In  Montgomery 
R.  R.  Co.  v.  Hurst,  9  Ala.  N.  S.,  513,  (1846,)  it  was  held  that  the  addition 
of  two  names  as  makers,  as  sureties  under  that  of  the  defendant  to  his  indi- 
vidual note,  without  his  knowledge  or  consent,  does  not  avoid  the  note,  unless 
the  addition  is  made  with  a  fraudulent  purpose. 

In  Smith  v.  Dunham,  8  Pick.,  246,  (1829,)  it  was  held  that  where  the 
payee  of  a  note  procured  a  person  who  was  present  when  it  was  executed  to 
attest  it  as  a  witness,  without  having  the  maker's  consent,  the  attestation  was 
of  no  effect  or  force,  and  that  the  alteration  was  not  material  unless  made 
fraudulently.  See  Nichols  v.  Johnson,  10  Cowen  R.,  192,  (1834.) 

Ogle  v.  Graham,  2  Penn.  R.,  132,  (1830.)  Ogle  agreed  to  become  bail  of 
Johnson  for  a  sum  not  exceeding  $400.  Ogle  drew  a  note  for  that  sum,  leav- 
ing a  blank  for  the  time  of  payment,  and  executed  it  in  presence  of  a  witness. 
The  note  was  then  put  into  Johnson's  hands,  who  inserted  the  sum  of  $323 
instead  of  $400,  that  being  as  much  as  he  had  need  of,  then  executed  it  in 
presence  of  a  witness,  and  in  the  absence  of  Ogle.  Held  not  an  alteration  of 
the  contract. 

In  Master  v.  Miller,  4  Term  R.,  320,  decided  in  1791,  which  is  the  leading 
case  on  the  subject,  in  respect  to  bills  and  notes,  it  was  adjudged  that  aa 


EVIDENCE.  683 

The  acceptance  being  made  after  sight  of  the  bill,  admits 
the  drawer's  signature  ;  i  and  the  production  of  the  bill  by 
the  payee  is  sufficient  proof  of  his  title  to  it,  notwithstanding 
it  has  his  indorsement  thereon  to  another  person.  2 

When  the  action  is  brought  by  an  indorsee  against  the 
acceptor  of  a  bill,  the  plaintiff  must  prove  his  acceptance, 
and  the  payee's  indorsement^  and  if  the  indorsement  be 
special,  it  must  appear  to  have  been  made  to  the  plaintiff,  or 
he  must  shew  a  subsequent  indorsement  to  himself.  But  the 
payee's  indorsement  is  required  to  be  proved  only  as  a  link 
in  the  plaintiff's  title;  and  hence,  where  the  drawer  forges 
the  name  of  the  payee  upon  the  draft  and  negotiates  it  in  that 
condition,  the  party  discounting  it  may  establish  his  title  as 
against  the  acceptor  by  proving  the  circumstances.  4  So  in 
respect  to  a  note  or  draft  drawn  payable  to  the  order  of  a 
fictitious  person  and  negotiated  by  the  maker,  the  holder  may 
recover  thereon,  as  on  a  draft  or  note  payable  to  bearer;  5  and 

1  Bank  of  Commerce  v.  Union  Bank,  3  Comst.  R.,  230,  and  cases  there 
cited,  particularly  Wilkinson  v.  Lutwidge,  1  Strange,  648.  The  acceptance 
admits  also  the  ability  of  the  drawer,  and  that  the  draft  was  properly  drawn; 
so  that  though  drawn  by  an  agent,  it  is  not  necessary  hi  an  action  against  the 
acceptor  to  shew  the  agent's  authority.  Porthouse  v.  Parker  and  al.,  1 
Campb.  N.  P.  C.,  82. 

a  1  Denio,  367;  18  John.  R.,  230;  1  Sand.  R.,  37. 

1  Canal  Bank  v.  Bank  of  Albany,  1  Hill,  287;  3  Comst.,  230. 

4  Coggill  v.  The  American  Exchange  Bank,  1  Comst.,  113. 

•  Plets  v.  Johnson,  3  Hill  R.,  112. 

alteration  of  the  date  of  a  bill  of  exchange,  after  acceptance,  whereby  the 
payment  would  be  accelerated,  avoids  the  instrument;  and  that  no  action  can 
be  afterwards  brought  upon  it,  even  by  an  innocent  holder  for  value.  And  in 
Burchfleld  v.  Moore,  3  Ellis  and  Bl.  R.,  683,  decided  in  1854,  it  was  held  that 
an  unauthorized  alteration  of  a  general  acceptance  by  the  addition  of  a  place 
of  payment,  discharges  the  acceptor,  even  as  against  a  bona  fide  holder,  sub- 
sequently taking  the  bill  for  value  and  without  notice  of  the  alteration. 

Patridge  v.  Colby  and  Nason,  19  Barb.  R.,  248,  decided  in  1855.  Colby 
made  his  note  payable  to  Nason  or  bearer,  and  Nason  delivered  the  note  to 
the  plaintiff  on  the  purchase  of  a  horse,  in  payment  therefor  on  condition  he 
put  his  name  to  it,  which  he  did  by  signing  his  name  under  that  of  the  maker. 
And  the  defendants  being  sued  together  on  the  note,  Colby  making  no  defence, 
it  was  held  that  the  defendant,  Nason,  had  made  himself  jointly  liable  with 
Colby  as  maker,  and  a  judgment  was  rendered  for  the  plaintiff  against  them 
\>oth. 


684  BILLS   OF  EXCHANGE  AND    PROMISSORY    NOTES. 

under  the  statutes  of  this  state,  the  owner  and  holder  of  a 
note  or  draft  payable  to  the  order  of  the  maker  and  negotiated 
without  indorsement,  may  recover  thereon,  against  the  maker, 
in  the  same  manner  as  if  the  paper  had  been  made  payable  to 
bearer,  i  And  it  is  not  necessary  in  such  a  case,  in  an  action 
against  the  maker,  or  against  any  party  to  the  instrument  with 
knowledge  of  the  facts,  to  prove  an  indorsement  by  the 
payee;  2  though  the  general  rule  is  that  a  note  or  bill  drawn 
payable  to  the  order  of  the  maker  must  be  indorsed  by  him, 
in  order  to  transfer  the  legal  title.  3 

By  making  his  note  payable  to  the  order  of  a  particular 
person,  the  maker  engages  to  pay  to  the  order  of  that  person, 
and  can  only  be  charged  with  liability  by  proving  his  order 
upon  the  note,  or  that  of  his  personal  representative  after  his 
death.  So,  where  a  bill  or  check  is  drawn  payable  to  the 
order  of  a  particular  person  or  firm,  the  indorsement  of  that 
person  or  firm  must  be  shewn  to  entitle  the  holder  to  demand 
the  money  thereon,  or  to  authorize  the  drawee  to  pay  the 
same.  4 

Bills  and  notes  made  payable  to  bearer  circulate  and  are 
considered  as  money  j  and  as  the  title  passes  by  delivery, 
possession  is  evidence  of  the  holder's  property  in  them.  5 
And  there  is  no  legal  difference  between  a  bill  or  note  payable 
to  bearer  and  one  payable  to  a  particular  person  or  bearer;  in 
either  case  the  holder  is  prima  facie  the  lawful  bearer  to 
whom  the  same  is  payable.  6  The  same  presumption  is  raised 

1  2  R.  S.,  53,  3d  ed.  "  Such  notes,  made  payable  to  the  order  of  the  maker 
thereof,  or  to  the  order  of  a  fictitious  person,  shall  if  negotiated  by  the  maker, 
have  the  same  effect,  and  be  of  the  same  validity  as  against  the  maker  and 
all  persons  having  knowledge  of  the  facts,  as  if  payable  to  bearer." 

a  3  Hill  R.,  112. 

3  Smith  v.  Lusher,  5  Cowen,  688;  Titcomb  v.  Thomas,   5  Greenl.,   282; 
Peake's  Rep.,  20,  Macferson  v.  Thoytes;  Bosanquet  v.  Anderson,  6  Esp.  R., 
43;  2Bing.  N.  C.,  544. 

4  Morgan  v.  The   Bank  of  the  State  of  N.  Y.,  1   Kernan  R.,  504.    The 
drawee  in  such  a  case,  is  only  authorised,  and  only  bound  to  pay  on  the  order 
of  the  payee. 

6  Goodman  v.  Harvey,  4  Ad.  and  Ellis,  870;  Wilborn  v.  Turner,  5  Pick., 
526. 
6  Dean  v.  Hall,  17  "Wend.,  214. 


EVIDENCE.  685 

in  favor  of  the  holder  of  a  note  or  bill  drawn  payable  to 
order,  after  the  same  has  been  indorsed  by  the  payee  in 
blank,  i 

When  the  plaintiffs  sue  on  a  note  payable  to  them,  or 
specially  indorsed  by  the  payee  to  them,  in  their  firm  name, 
it  must  be  proved  that  the  firm  consists  of  the  plaintiffs  on 
the  record,  or  they  can  not  recover  thereon.  2  Until  it  is 
shewn  that  the  plaintiffs  constitute  the  firm  named  in  the  note 
or  indorsement,  they  are  presumptively  strangers  to  the  paper, 
as  much  so,  as  where  the  plaintiff  sues  on  a  note  payable  to 
him  by  another  name,  and  is  held  to  shew  that  he  was  the 
person  intended  as  payee  in  the  note;  3  or  where  a  bill  is 
drawn  leaving  the  name  of  the  payee  in  blank,  and  the 
plaintiff  inserts  his  own  name,  and  is  required  to  prove  that 
he  was  intended  as  the  payee.  4 

Where  the  name  of  the  payee  in  a  promissory  note  is  that 
of  two  persons,  father  and  son,  the  presumption  is  that  the 
one  in  possession  is  the  real  payee.  5  But  where  a  note  pur- 
porting to  have  been  given  for  value  received,  is  made  payable 
to  one  or  other  of  two  persons,  the  action  should  be  brought 
thereon  in  the  name  of  them  both,  and  then  a  recovery  may 
be  had  in  the  suit,  on  proof  of  the  execution  of  the  note.  6 

In  an  action  against  an  indorser  of  a  bill  or  note,  the  plain- 
tiff need  not  prove  the  signature  of  the  maker,  drawer  or 
prior  indorsers;  nor  can  the  defendant  impeach  the  genuine- 

1  Bayley  on  Bills,  ch.  5,  §  1. 

*  McGregor  v.  Cleveland,  5  Wend.,  475.     The  plaintiffs  in  this  case  sued  as 
the  payees  of  a  note  payable  to  McGregor,  Darling  &  Co.,  and  they  were  held 
to  prove  themselves  to  be  the  firm  named  in  the  note.    In  a  note  to  the  case 
of  Ord  and  others  v.  Portal,  3  Campb.,  239,  it  is  said,  "where  a  bill  of  ex- 
change is  payable,  or  indorsed  specially,  to  a  firm,  Lord  Ellenborough  has 
often  ruled  that  in  an  action  by  the  payees  or  indorsees,  strict  evidence  must 
be  given  that  the  firm  consists  of  the  persons  who  sue  as  plaintiffs  on  the 
record." 

1  Willis  v.  Barrett,  2  Stark.  R.,  27 ;  Medway  Cotton  Manufactory  v.  Adams 
10  Mass.  R.,  360. 

*  Curtchley  v.  Mann,  1  Marsh.,  29;  5  Taunt.,  529;  10  Wend.,  93. 
6  Sweeting  v.  Fowler  and  another,  1  Stark.  R.,  106. 

*  Blankenhagen  v.  Blundell,  2  Barn,  and  Aid.,  417;  Walrad  v.  Petrie,  4 
Wend.,  575. 


686  BILLS  OF   EXCHANGE  AND    PROMISSORY   NOTES  » 

ness  of  the  bill  or  note,  i  for  his  indorsement  admits  the  ability 
and  signature  of  every  antecedent  party.  2 

The  general  rule,  which  has  been  previously  stated,  is  that 
the  plaintiff  need  not  prove  in  an  action  on  negotiable  paper, 
that  the  same  was  made,  accepted  or  indorsed  for  an  adequate 
consideration;  the  presumption  being  that  the  contract  of  the 
several  parties  to  the  instrument  was  entered  into  for  value 
received,  and  that  the  holder  acquired  it  in  the  usual  course 
of  business  for  value.  But  the  rule  yields  and  the  presump- 
tion is  overcome  in  a  variety  of  cases.  For  instance,  if  it  be 
shewn  that  the  bill  or  note  in  suit  has  been  lost,  or  has  been 
stolen  from  the  owner,  the  plaintiff  must  then  shew  himself 
to  be  a  bona  fide  holder  for  value,  which  he  may  do  by  shew- 
ing that  he  took  the  paper  fairly,  in  the  usual  course  of  busi- 
ness, and  gave  a  valuable  consideration  for  it.  3  So,  if  it  be 
shewn  that  the  bill  or  note  was  obtained  by  fraud,  or  made 
under  duress,  or  given  without  consideration,  for  a  particular 
purpose  and  dishonestly  used  for  another,  the  burden  of  proof 
is  on  the  plaintiff,  to  shew  under  what  circumstances  and  for 
what  value  he  became  the  holder.  4  So,  if  the  defendant 
answer  that  the  note  in  suit  was  made  on  an  illegal  considera- 
tion and  that  the  plaintiff  gave  no  value  for  it,  it  has  been 
held  on  a  general  denial  of  the  facts  stated  in  the  answer, 
that  proof  of  the  illegality  is  sufficient  to  cast  on  the  plaintiff 
the  burden  of  proving  that  he  gave  value  for  it.  5 

Proof  that  the  bill  in  question  was  given  without  conside- 
ration, as  accommodation  paper,  raises  no  presumption  against 
the  holder,  and  is  no  evidence  of  the  want  of  consideration  in 
the  holder.  6  "If  the  defendant  says,  ' I  lent  my  name  to 

1  There  is  a  warranty  implied  in  the  transfer  of  every  negotiable  instrument 
that  it  is  not  forged.  Henich  v.  Whitney,  15  John.  R.,  240;  2  Campb.,  182; 
1  Salk.,  127;  1  Ld.  Raym.,  443. 

8  Bayley  on  Bills,  ch.  11. 

8  Miller  v.  Race,  1  Burr.  R.,  452;  Grant  v.  Vaughan,  3  id.  1526;  Peacock  v. 
Rhodes,  Doug.  R.,  633. 

4  Duncan  v.  Scott,  1  Camp.  N.  P.  C.,  100;  Rees  v.  Marquis  of  Headfort,  2 
id.  574;  Holme  v.  Carsper,  5  Bin.,  469;  4  Taunt.,  114. 

6  Baily  v.  Bidwell,  13  M.  and  W.,  73. 

'  Mills  v.  Barber,  1  Mees.  and  Wels.,  425,  decided  in  1836.  Lord  Abinger 
C.  B.:  "  This  was  an  action  against  the  acceptor  of  a  bill  of  exchange,  in 


EVIDENCE.  687 

the  drawer  for  the  purpose  of  his  raising  money  upon  the 
bill '  the  probability  is  that  money  was  obtained  upon  the 
bill." 

The  party  holding  the  affirmative  on  the  pleadings  must 
begin  with  evidence  in  support  of  the  action  or  defence;  but 
where  it  is  shewn  on  the  defence  that  the  note  in  suit  was 
given  for  an  illegal  consideration,  or  fraudulently  diverted 
from  the  purpose  for  which  it  was  made,  the  plaintiff  must 
take  up  the  case  and  prove  a  transfer  to  himself  for  a  good 
consideration,  i 

1  A  few  cases  will  shew  where  the  burden  of  proof  lies,  more  accurately  than 
can  be  stated  in  general  terms. 

Edmunds  v.  Groves,  2  Mees.  and  Wels.,  642,  decided  in  1837.  Assumpsit 
by  indorsee  against  the  maker  of  a  note.  Plea,  that  the  note  was  given  for  a 
gaming  debt,  and  indorsed  to  the  plaintiff  with  notice  thereof,  and  without 
consideration.  Replication,  that  the  note  was  indorsed  to  the  plaintiff  without 
notice  of  the  illegality,  and  for  a  good  and  sufficient  consideration,  on  which 
issue  was  joined.  Held,  that  on  these  pleadings  the  illegal  making  of  the 
note  was  not  so  admitted  as  to  render  it  necessary  for  the  plaintiff  to  give  any 
evidence  of  consideration ;  but  that  in  order  to  compel  him  to  do  so,  the  de- 
fendant ought  to  have  proved  the  illegality  by  evidence.  An  admission  of  a 
fact  on  the  record  amounts  merely  to  a  waiver  of  requiring  proof  of  that  fact  • 
but  if  the  other  party  seeks  to  have  any  inference  drawn  by  the  jury  from  the 
fact  so  admitted,  he  must  prove  it  like  any  other  fact." 

Brown  v.  Philpot,  2  Moody  and  Rob.,  285,  decided  in  1840.  Assumpsit. 
Indorsee  against  acceptor.  On  replication  de  injuria  to  a  plea  by  the  acceptor 
of  a  bill,  that  it  was  accepted  for  the  accommodation  of  the  drawer,  and  by 


which  the  defendant  had  pleaded  that  the  bill  of  exchange  was  given  without 
any  consideration,  and  for  the  accommodation  of  the  drawer,  and  indorsed  to 
the  plaintiff  without  value;  to  which  the  plaintiff  replied,  that  it  was  indorsed 
to  him  for  a  valuable  consideration.  At  the  trial  the  plaintiff  stood  upon  his 
right,  contending  that  the  possession  of  the  bill  was  itself  prima  facie  evidence 
of  consideration;  the  defendant  insisted  that  it  was  cast  upon  the  plaintiff  to 
prove  affirmatively  that  he  did  give  value  for  the  bill.  Neither  party  choosing 
to  act,  the  learned  judge  took  it  upon  himself,  and  directed  the  verdict  to  be 
entered  for  the  plaintiff."  After  arguing  the  case,  the  court  said,  "  This  deci- 
sion of  the  present  case  requires  only  to  lay  down  this  rule,  that  where  there 
is  no  fraud,  nor  any  suspicion  of  fraud,  but  the  simple  fact  is  that  the  defendant 
received  no  consideration  for  his  acceptance,  the  plaintiff  is  not  called  upon  to 
prove  that  he  gave  value  for  the  bill.  That  seems  to  be  the  opinion  generally 
prevailing  among  the  judges.  In  this  case  the  onus  probandi  lay  on  the  de- 
fendant, and  he  ought  to  have  gone  farther."  17  Barb.  R.,  530;  18  id.  344;  2 
Selden  R.,  209. 


688  BILLS  OF  EXCHANGE  AND    PKOMISSOEY  NOTES. 

When  the  defendant  proves  that  the  plaintiff  acquired  the 
bill  or  note  after  it  became  due,  or  with  notice  of  the  facts 
impeaching  the  holder's  title  or  right  to  recover  thereon,  or 
that  he  did  not  part  with  value  for  the  same,  he  is  at  liberty 
to  introduce  his  defence  to  the  action;  for  if  either  of  these 
facts  be  shewn,  the  plaintiff  does  not  stand  in  the  attitude  of 
a  bona  fide  holder,  i  It  is  not  necessary  to  shew  that  the 
plaintiff  took  the  paper  with  positive  knowledge  of  the  cir- 
cumstances affecting  the  holder's  right  of  recovery;  it  will  be 
sufficient  to  let  in  the  defence  if  it  be  shewn  that  he  took  the 
instrument  in  such  a  manner  as  to  imply,  or  fairly  charge  him 

1  The  plaintiff  may  recover  as  a  bona  fide  holder,  notwithstanding  he  took 
the  note  or  bill  after  it  was  due,  provided  he  derives  his  title  from  or  through 
a  bona  fide  holder.  See  chapter  on  Consideration. 


him  indorsed  to  A.  B.,  without  consideration,  for  the  purpose  of  raising  money, 
and  by  A.  B.  fraudulently  indorsed  to  C.  D.,  without  consideration,  and  by 
him  to  the  plaintiff  without  consideration,  the  plaintiff  must  prove  the  want 
of  consideration  Jrom  plaintiff  to  C.  D.  The  defendant  must  support  his 
plea  by  proving  that  the  plaintiff 'gave  no  consideration  for  the  bill. 

Jacob  v.  Sir  W.  Hungate,  1  M.  and  R.,445.  The  fact  of  a  bill  having  been 
accepted  to  raise  money  for  the  acceptor,  and  of  the  payee  having  appropria- 
ted the  money  so  raised  to  his  own  use,  is  not  sufficient  to  call  upon  a  subse- 
quent indorsee  to  shew  that  he  gave  value  for  the  bill. 

Smith  v.  Martin,  9  Mees.  and  Wels.,  304,  decided  in  1842.  To  a  declaration 
in  assumpsit  by  indorsee  against  maker  of  a  promissory  note,  the  defendant 
pleaded  that  the  note  was  indorsed  and  delivered  to  the  plaintiff  by  his  indorser 
in  violation  of  good  faith,  and  in  fraud  and  contempt  of  an  order  for  referring 
the  claim  of  that  indorser  to  arbitration  -,  and  that  the  plaintiff  took  the  note 
with  full  knowledge  of  the  premises.  The  plaintiff  replied  that  he  had  not, 
when  he  took  the  note,  any  knowledge  of  the  premises  in  the  plea  mentioned. 
Issue  thereon.  Held,  that  upon  these  pleadings  the  defendant  was  bound  to 
begin  at  the  trial,  and  to  prove  the  plaintiff's  knowledge  of  the  fraud;  and 
that  the  plaintiff  was  not  bound  in  the  first  instance  to  prove  consideration 
given  for  the  indorsement  to  him. 

Bailey  v.  Bidwell,  13  Mees.  and  Wels.,  73,  decided  in  1844.  "Where,  in 
answer  to  an  action  on  a  bill  of  exchange  or  promissory  note,  the  defendant 
pleads  that  it  was  illegal  in  its  inception,  and  that  the  plaintiff  took  it  without 
value,  to  which  the  plaintiff  replies  de  injuria,  the  illegality  being  proved,  the 
onus  is  cast  upon  the  plaintiff  of  proving  that  he  gave  value.  Alderson,  B.- 
"  It  appears  to  me,  that  though  the  defendant  is  bound  to  aver  in  his  plea  both 
the  illegality  and  want  of  consideration,  yet  if  he  proves  the  illegality,  and  the 
plaintiff  does  not  prove  the  giving  of  the  consideration,  the  plea  is  maintained 
because  the  proof  of  the  illegality  shews,  prima  facie,  that  the  instrument. is 


EVIDENCE.  689 

with  knowledge,  i  Taking  a  note  or  bill  with  actual  know- 
ledge of  its  invalidity,  the  indorsee  stands  in  no  better  situa- 
tion than  the  party  from  whom  he  receives  it;  if  it  be  invalid 
in  the  hands  of  the  payee,  for  fraud,  for  failure  of  considera- 
tion, or  for  any  cause  that  deprives  him  of  the  right  to  recover 
on  it,  or  to  negotiate  it,  it  is  equally  invalid  in  the  hands  of 
the  person  to  whom  it  is  transfered  With  notice  of  the 
infirmity.  2  Thus,  if  it  be  shewn  that  the  plaintiff  took  the 
note  in  question  with  notice  of  a  previous  payment  thereon, 

1  Brown  v.  Tabor,  5  Wend.,  566;  Wiggins  v.  Bush,  12  John.  R.,  306j  Small 
v.  Smith,  1  Denio,  688. 
*  11  John.  R.,  128;  5  Wend.,  600;  13  id.  605. 


without  consideration."  •  •  *  The  illegality,  which  was  an  agreement  by 
the  payee  in  consideration  of  the  note  not  to  oppose  the  maker's  petition  in 
bankruptcy,  being  established  in  evidence,  it  then  lies  upon  the  plaintiff  to 
answer  the  challenge  as  to  the  value  given  by  him,  which  in  this  case  he  has 
not  done." 

Gore  v.  Gibson,  13  Mees.  and  Wels.,  623,  decided  in  1845-  To  an  action  by 
indorsee  against  indorser  of  a  bill  of  exchange,  the  defendant  pleaded  that 
when  he  indorsed  the  bill  he  was  so  intoxicated,  and  thereby  so  entirely  de- 
prived of  sense,  understanding  and  the  use  of  his  reason,  as  to  be  unable  to 
comprehend  the  meaning,  nature,  or  effect  of  the  indorsement,  or  to  contract 
thereby;  of  which  the  plaintiff,  at  the  time  of  the  indorsement  to  him  had 
notice.  Held  to  be  a  good  answer  to  the  action,  and  not  to  amount  to  an 
argumentative  traverse  of  the  indorsement. 

James  v.  Chalmers,  2  Selden  R.,  209.  The  action  was  on  a  note  made  by 
defendant,  payable  to  the  order  of  Adams  &  Brownell;  plaintiff  alleges  that 
the  payees  indorsed  the  note  to  him,  and  that  he  is  the  lawful  holder  and 
owner  of  it.  The  answer  denies  on  information  and  belief  the  indorsement 
by  the  payees  to  the  plaintiff,  and  denies  that  plaintiff  was  the  owner  of  the 
note  when  the  action  was  commenced;  and  then  alleges  that  since  the  note  be- 
came due  one  John  C.  Beardsley  was  the  owner  of  it,  and  was  then  indebted 
to  the  defendant  in  the  sum  of  $220,  and  asks  that  the  same  be  set  off  against 
the  note.  The  reply  states  that  plaintiff  was  the  owner  of  the  note  at  the  time 
of  the  commencement  of  the  suit,  and  is  still,  and  denies  that  Beardsley  ever 
was  the  owner  of  the  note  or  indebted  to  the  defendant .  After  trial  the 
referee  reported  among  other  things  as  follows:  "  I  did  find  from  such  proof 
and  all  the  proof  in  the  case,  that  the  plaintiff  presumptively  paid  value  for 
such  note,  and  that  he  is  the  owner  of  it."  It  was  shewn  on  the  trial  that  the 
note  was  transferred  to  Wm.  .M.  Parks,  after  it  became  due,  for  $75 — it  having 
ben  given  originally  for  $172.06 — but  there  was  no  evidence  given  of  a  transfer 
to  the  plaintiff;  and  the  court  held  that  the  plaintiff  had  given  sufficient 
p rima  facie  evidence  that  he  was  the  owner  of  the  note  by  producing  it. 


690  BILLS   OF  EXCHANGE  AND  PROMISSORY   NOTES. 

the  payment  is  a  good  defence  so  far  as  it  goes :  i  or  if  it  be 
shewn  that  the  note  was  indorsed  for  the  accommodation  of  a 
firm,  and  that  on  their  becoming  insolvent  the  indorser  forbid 
them  to  negotiate  it,  and  that  the  plaintiff  afterwards  received 
it  with  knowledge  of  the  facts,  it  has  been  held  he  can  not 
recover  thereon.  2 

Proving  that  the  plaintiff  took  the  note  or  bill  after  it 
became  due,  and  had  been  dishonored,  is  equivalent  to  evi- 
dence that  he  was  notified  of  the  equities  existing  between 
the  person  from  whom  he  received  the  paper  and  the  parties 
liable  thereon  to  him;  and  lets  in  all  legal  and  equitable 
defences  existing  against  it  in  the  hands  of  the  holder  when 
due.  3  The  non-payment  of  the  paper  at  maturity  is  con- 
sidered sufficient  to  put  the  purchaser  on  his  guard;  and 
hence  the  law  charges  the  purchaser  of  dishonored  paper 
with  all  the  incumbrances  resting  upon  the  security. 

Proof  that  the  plaintiff  did  not  part  with  value  for  the 
note  or  bill  in  suit,  in  like  manner  lets  in  the  defence;  4  for 
the  law  will  not  allow  a  party  taking  paper  without  considera- 
tion to  enforce  it,  in  a  case  where  the  person  from  whom  he 
received  it  had  no  title  to  it,  or  right  to  recover  the  amount 
named  in  the  instrument.  5  But  the  plaintiff  comes  into  court 
with  the  presumption  in  his  favor  that  he  paid  value  for  the 
paper,  and  this  presumption  is  not  overcome  by  shewing  that 
he  received  it  after  it  became  due.  6  Except  in  cases  where 
the  note  or  bill  is  proved  to  have  been  lost  or  stolen,  the 
defendant  must  go  farther  and  establish  his  defence  to  the 
action  on  the  merits;  7  for  he  has  two  entirely  distinct  things 
to  do.  In  the  first  place,  he  must  establish  his  right  to  inter- 

1  White  v.  Kibling,  11  John.  R.,  128. 

8  Skilding  v.  Warner,  15  John.  R.,  270. 

"  3  Cowen,  252;  24  "Wend.,  97. 

4  Coddingtonv.  Bay,  20  John.  R.,  637;  5  John.  Ch.  R.,  54;  10  Wend.,  86; 
16  id.  659;  Jones  v.  Swan,  6  id.  589;  Hart  v.  Palmer,  12  Wend.,  523;  2  Hill 
R.,  140;  6  Hill  R.,  93;  1  Sand.  R.,  53;  9  Wend.,  170;  23  Wend.,  311;  2  Hill 
R.,  301 ;  21  Wend.,  499;  24  id.  115;  2  Barb.  R..  559;  6  id.  445. 

6  White  v.  The  Springfield  Bank,  1  Barb.  R.,  225. 

6  James  v.  Chalmers,  2  Selden  R.,  209;  5  Sand.  R.,  52. 

7  Payne  v.  Cutler,  13  Wend.,  605. 


EVIDENCE.  691 

pose  a  defence;  and  in  the  second  place,  he  must  prove  the 
facts  on  which  the  defence  is  founded.  Proof  that  the  paper 
has  been  lost  by  or  stolen  from  the  true  owner,  calls  upon  the 
plaintiff  to  prove  his  title  as  a  bona  fide  holder,  i  Proof  that 
the  paper  was  obtained  or  put  in  circulation  fraudulently, 
calls  for  the  same  evidence;  while  it  shows  a  defence  to  the 
instrument  on  the  merits,  unless  the  plaintiff  shews  himself 
to  be  a  bona  fide  holder  for  value,  thus  shutting  out  the 
defence.  2 

Having  established  his  right  to  introduce  his  defence,  the 
defendant  may  prove  any  defence  that  would  have  been  avail- 
able to  him  as  against  the  person  from  whom  the  plaintiff 
received  the  paper,  whether  founded  on  fraud,  want,  failure  or 
illegality  of  consideration.  3  And  in  this  state  the  statute 

1  Miller  v.  Race,  supra  j  Grant  v.  Vaughan,  supra. 

*  Woodhull  v.  Holmes,  10  John.  R.,  231;  Skilding  v.  Warren,  15  John.  R., 
270;  Brown  v.  Taber,  5  Wend.,  566;  Vallett  v.  Parker,  6  Wend.,  615;  Wen- 
dell v.  Howell,  9  Wend.,  170. 

*  De  Mott  v.  Starkey.  3  Barb.  Ch.  R.,  403;  Reed  v.  "Warner,  5  Paige,  650; 
3  Cowen  R.,  262;  15  John.  R.,  270;  Story  on  Bills,  §  187-194.    It  is  some- 
times said,  and  it  is  held  in  England,  that  a  party  taking  a  bill  over  due  takes 
it  subject  to  the  equities  attaching  to  the  particular  bill;  but  not  to  equities 
which  may  exist  between  the  parties,  arising  from  other  transactions.    Bur- 
rough  v.  Moss,  10  Barn,  and  Cress.,  558;  2  Greenleaf  on  Ev.,  §171.    "In 
regard  to  the  consideration,  two  things  are  to  be  noted;  first,  as  to  the  parties 
between  whom  it  may  be  impeached;  and  secondly,  as  to  the  burden  of  proof. 
And  here  it  is  first  to  be  observed,  that  the  consideration  of  a  bill  or  note,  as 
well  as  of  any  other  unsealed  instrument  or  contract,  is  impeachable  by  the 
immediate  or  original  parties ;  between  whom  the  general  rule  is  that  the  want 
of  it  may  always  be  set  up  .by  the  defendant,  in  bar  of  the  action.    Thus,  it 
may  be  insisted  on  by  the  drawer  against  the  payee;  by  the  payee  against  his 
indorsee ;  and  by  the  acceptor  against  the  drawer.    The  same  rule  is  applied 
to  all  persons  standing  precisely  in  the  situation  of  the  original  parties,  and 
identified  with  them,  in  equity;  such  as  their  agents;  purchasers  of  paper  dis- 
honored by  being  over  due;  persons  who  have  given  no  value  for  the  bill;  pur- 
chasers with  notice  that  the  instrument  is  void  in  the  hands  of  the  assignor, 
whether  from  fraud,  or  from  want,  failure  or  illegality  of  consideration.    These 
parties  are  regarded  as  taking  the  bill  or  note,  subject  to  all  the  equities 
attaching  to  the  particular  bill  in  the  hands  of  the  holder;  but  not  to  equities 
which  may  exist  between  the  parties,  arising  from  other  transactions.     But, 
on  the  other  hand,  no  defect  or  infirmity  of  consideration,  either  in  the  crea- 
tion or  in  the  transfer  of  a  negotiable  security,  can  be  set  up  against  a  mere 
stranger  to  the  transaction,  such  as  a  bona  fide  holder  of  the  bill  or  note,  who 
received  it  for  a  valuable  consideration,  at  or  before  it  became  due,  and  without 


692  BILLS   OF  EXCHANGE   AND   PROMISSORY  NOTES. 

allows  the  defendant  to  plead,  and  prove  as  a  set-off  or  coun- 
ter-claim, any  demand  existing  against  the  assignor  of  the  bill 
or  note,  when  the  assignment  or  transfer  of  the  paper  is  made 
after  the  same  is  due.  i  But  the  defendant  will  not  be  allowed 
a  set-oif  in  such  a  case,  where  it  appears  that  he  still  owes  the 
assignor  a  sum  equal  to  the  amount  which  he  offers  to  prove 
as  a  counter-claim.  2  Nor  is  he  entitled  to  prove  a  set-off  in 
any  action  on  negotiable  notes  or  bills  of  exchange,  until  he 
has  first  shewn  that  the  plaintiif  received  them  with  notice 
or  after  they  had  been  dishonored.  3 

Under  the  former  practice  the  holder  of  a  note,  as  payee  or 
indorsee,  was  allowed  to  maintain  an  action  upon  it  in  his  own 
name,  as  a  trustee  for  the  person  having  the  real  interest  in  it; 
but  it  was  competent  for  the  defendant  to  shew  that  the  owner 
of  the  paper  had  forbidden  him  to  pay  it  to  the  plaintiif,  thus 
rendering  plaintiff's  possession  of  the  paper  mala  fide.  4  Under 
the  present  practice,  it  is  very  clear  that  where  the  title  is  put 
in  issue,  the  defendant  may  defeat  the  action  by  shewing  either 
that  the  plaintiff  has  no  title  to  the  paper,  or  that  he  is  not  the 
real  owner.  5 

In  actions  against  the  drawer  of  bills  and  checks,  and  against 
the  indorser  of  negotiable  paper,  it  is  incumbent  upon  the 
plaintiff  to  prove  as  well  as  allege,  that  the  paper  was  duly 
presented  for  payment  and  dishonored,  and  that  due  notice 

1 2  R.  S.,  450,  451,  3d  ed;  Code  of  Procedure,  §  112. 

"Collins  v.  Allen,  12  "Wend.,  356. 

8  Hendricks  v.  Judah,  1  John.  R.,  319. 

4  Comstock  v.  Hoag,  5  Wend.,  600 ;  10  John.  R.,  224 ;  Barber  v.  Prentiss,  6 
Mass.  R.,  430. 

8  The  legal  title,  as  we  have  seen,  was  always  necessary  to  be  shewn  by  the 
plaintiff;  11  "Wend.,  27;  and  the  Code  requires  all  actions,  with  the  exceptions 
specified,  to  be  brought  in  the  name  of  the  real  parties  in  interest. 


notice  of  any  infirmity  therein.  The  same  rule  will  apply,  though  the  present 
holder  has  such  notice,  if  he  derives  his  title  to  the  bill  from  a  prior  bonafide 
holder  for  value.  Every  such  holder  of  a  negotiable  instrument  is  entitled  to 
recover  upon  it,  notwithstanding  any  defect  of  title  in  the  person  from  whom 
he  derived  it ;  and  even  though  he  derived  it  from  one  who  acquired  it  by 
fraud,  or  theft  or  robbery." 


EVIDENCE.  693 

thereof  was  given  to  the  defendant.  These  tacts,  as  we  have 
seen,  are  conditions  precedent,  and  must  be  averred  and  proved, 
or  dispensed  with  by  other  evidence,  in  order  to  charge  either 
the  drawer  or  indorser  with  liability,  i 

Where  the  action  is  against  the  drawer  or  indorser  of  inland 
bills,  for  non-acceptance,  the  plaintiff  must  prove  that  the 
draft  was  duly  presented  to  the  drawee  for  acceptance  and 
that  he  refused  to  accept  the  same,  and  that  the  defendant  was 
seasonably  notified  of  the  refusal.  And  where  the  action  is 
brought  against  either  of  them  for  non-payment,  the  plaintiff 
must  prove  that  the  bill  was  presented  to  the  drawee  for  pay- 
ment on  the  day  the  same  became  payable,  that  payment 
thereof  was  refused,  and  that  the  defendant  was  duly  notified 
of  the  dishonor.  2 

When  the  action  against  the  drawer  or  indorser  is  brought 
upon  a  bill  that  has  been  accepted,  payable  at  a  particular 
bank  or  counting  house,  the  plaintiff  must  prove  a  present- 

1  Chitty  on  Bills,  652. 

*  Greenleaf  on  Ev.  §  175.  ' '  But  in  the  latter  case,  as  in  actions  against  the 
drawer  or  indorser  of  a  bill,  or  the  indorser  of  a  note,  the  undertaking  of  the 
defendant  being  conditional,  namely,  to  pay  in  case  the  party  primarily  liable 
does  not,  the  default  of  such  party  must  be  proved,  or  the  proof  be  dispensed 
with  by  the  introduction  of  other  evidence.  The  receiver  of  a  note  is  under- 
stood thereby  to  contract  with  every  other  party,  who  would  be  entitled  to 
bring  an  action  on  paying  it,  that  he  will  present  it  in  proper  time  to  the 
drawee  for  acceptance,  when  acceptance  is  necessary,  and  to  the  acceptor  for 
payment,  when  the  bill  has  arrived  at  maturity  and  is  payable;  to  allow  no 
extra  time  for  payment,  to  the  acceptor;  and  to  give  notice  in  a  reasonable 
time,  and  without  delay,  to  every  such  person,  of  a  failure  in  the  attempt 
to  procure  a  proper  acceptance  or  payment.  Any  default  or  neglect  in  any  of 
these  respects  will  discharge  every  such  person  from  responsibility  on  account 
of  a  non-acceptance  or  non-payment;  and  will  make  it  operate  generally,  as  a 
satisfaction  of  any  debt,  demand,  or  value  for  which  it  was  given." 

"  The  neglect  to  give  notice  to  the  drawer  of  a  renewed  bill,  not  only  dis- 
charges him  from  liability  to  pay  that  bill,  but  also  discharges  him  from 
liability  to  pay  the  prior  bill,  to  satisfy  which  it  was  drawn;  and  this, 
although  it  be  expressly  agreed  that  the  taking  such  second  bill  shall  not  ex- 
onerate any  of  the  parties  to  the  first  bill,  until  actual  payment."  Chitty 
on  Bills,  434,  citing  Bridges  v.  Berry,  3  Taunt.,  130,  which  was  an  action  on  a 
larger  bill  taken  in  payment  of  a  smaller  bill,  the  plaintiff  paying  the  difference 
in  change.  Reid  v.  Coats,  6  Bro.  P.  C.,  was  the  case  of  a  bill  accepted  by  new 
parties;  and  the  court  held  that  the  holder  was  bound  to  use  diligence  in  pre- 
genting  it  for  payment,  and  in  giving  notice  of  non-payment. 


694  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

ment  for  payment  at  the  place  designated  in  the  acceptance;  1 
and  that  the  presentment  for  payment  was  made  on  the  right 
day  and  within  the  usual  hours  of  business.  2  Where  the  bill 
is  drawn  payable  a  certain  number  of  days  after  sight,  or  after 
demand,  the  plaintiff  must  prove  a  presentment  to  the  drawee 
for  acceptance,  as  a  means  of  fixing  the  time  of  payment :  3 
but  this  is  not  necessary  where  the  bill  is  drawn  payable  so 
many  days  or  months  after  date. 

Where  the  action  is  against  the  indorser  of  a  promissory 
note,  it  rests  with  the  plaintiff  to  prove  that  he  has  made  the 
demand  required  by  law,  and  given  to  the  defendant  timely 
notice  of  non-payment.  What  is  a  legal  demand,  or  timely 
notice,  has  already  been  sufficiently  considered. 

In  an  action  against  the  drawer  or  indorser  of  a  foreign  bill, 
it  is  incumbent  upon  the  plaintiff  to  prove,  besides  the  pre- 
sentment and  notice  of  dishonor,  a  protest  for  non-acceptance 
or  non-payment.  4  But  the  protest,  when  made  by  a  notary 
in  a  foreign  state,  and  attested  under  the  seal  of  his  office, 
proves  itself,  and  is  evidence  of  presentment  and  refusal.  5 
And  it  is  now  settled  that  bills  of  exchange  drawn  in  one  state 
of  the  Union  and  payable  in  another,  are  foreign  bills,  within 
the  meaning  of  the  rule  which  makes  the  notarial  protest 
prima  facie  evidence  of  the  presentment  and  dishonor  of  such 
bills.  6  But  since  the  giving  of  notice  of  dishonor  to  the 
drawer  or  indorser  is  not  the  official  duty  of  the  foreign 
notary,  his  notarial  certificate  is  not  evidence  of  that  fact, 
although  it  contains  a  statement  shewing  that  due  notice  has 
been  given.  7 

The  necessity  of  proving  the  protest  of  a  foreign  bill  is 
superseded,  in  an  action  against  the  drawer,  by  shewing  that 

'Gibb  v.  Mather,  8  Bing.  214;  17  John.  R.,  248;  2  Sand.  166. 
"Idem  j  17  John  R.  248;  As  to  the  time  when  bills  must  be  presented  for 
payment,  see  former  chapter  on  that  subject. 
8  Greenleaf  on  Ev.  §  176. 
4Chitty  on  Bills,  655;  Greenleaf  on  Ev.,  §  183. 
•Halliday  v.  McDougall,  20  Wend.,  81;  S.  C.  22  Wend.,  264. 

6  Buckner  v.  Finley,  2  Peters,  R.,  586. 

7  Bank  of  Rochester  v.  Gray,  2  Hill  R.,  227 ;  8  Porter  R.,  258. 


EVIDENCE.  695 

he  had  no  effects  in  the  hands  of  the  drawee,  and  no  reasona- 
ble expectation  that  the  bill  would  be  honored;  or  by  shew- 
ing that  he  has  admitted  his  liability,  by  promising  to  pay  the 
bill  when  called  upon  for  that  purpose;  or  by  shewing  his 
request  that  it  might  not  be  protested;  or  by  proving  that 
a  protest  of  the  bill  was  prevented  by  inevitable  accident,  or 
by  superior  force,  or  by  any  casualty  not  attributable  to  the 
want  of  diligence  in  the  holder  or  his  agent,  i  As  against 
the  indorser  of  a  foreign  bill,  the  want  of  a  protest  is  not 
excused,  by  shewing  the  want  of  funds  in  the  hands  of  the 
drawee :  with  this  exception,  the  protest  may  be  dispensed 
with,  in  like  manner  as  in  an  action  against  the  drawer.  2 

The  averment  of  notice  to  the  drawer  or  indorser,  must  be 
proved  like  any  other  fact.  3  This  is  the  general  rule;  to 
which  respect  must  be  had  in  the  construction  of  statutory 
enactments  modifying  the  principles  of  the  commercial  law. 
In  this  state,  the  certificate  of  a  notary,  under  his  hand  and 
seal  of  office,  is  made  presumptive  evidence  of  the  protest  of 
bills  of  exchange  and  promissory  notes,  and  of  the  service  of 
notice  on  the  parties  to  the  paper;  but  the  statute  does  not 
apply,  where  the  defendant  denies  having  received  the  notice, 
and  supports  his  denial  with  his  affidavit.  4  So  that  wherever 
the  fact  of  notice  is  fairly  put  in  issue,  the  parties  are  bound 
to  come  into  court,  with  their  witnesses,  prepared  to  prove  or 
disprove  the  allegation.  If,  however,  the  notary  be  dead, 
insane,  or  absent,  so  that  his  present  attendance  or  testimony 
cannot  be  procured  in  any  mode  provided  by  law,  the  original 

'Legge  T.  Thorpe,  12  East,  171;  2  Camp..  310,  188;  Byles  on  Bills,  204; 
Greenl.  on  Ev.,  §  184. 

2  When  the  drawer  adds  to  the  bill  a  request  or  direction  that  the  bill,  in  case 
it  is  dishonored,  be  returned  without  protest,  retour  santprotet,  or,  sans  f rait. 
he,  and  perhaps  the  indorsers,  cannot  insist  upon  the  want  of  a  protest.  Chitty 
on  Bills,  165. 

1 20  Wend.,  81;  2  Hill,  227. 

4  2  R.  S.,  382,  3,  3d  ed.  "  la  some  of  the  United  States,  the  certificate  of 
the  notary,  under  his  hand  and  official  seal,  is  by  Statute  made  competent 
evidence,  prima  facie,  of  the  matters  by  him  transacted,  in  relation  to  the 
presentment  and  dishonor  of  the  bill,  and  of  notice  thereof  to  the  parties 
liable."  2  Greenl.  on  Ev.,  §  183,  and  note. 


696  BILLS   OF  EXCHANGE  AND   PROMISSORY    NOTES. 

protest,  under  his  signature  and  seal,  both  of  them  being 
proved,  is  presumptive  evidence  of  the  demand,  of  acceptance, 
or  of  payment  therein  stated.;  and  a  written  memorandum  in 
his  handwriting,  or  signed  by  him,  at  the  foot  of  the  protest, 
or  in  his  register  of  official  acts,  is,  in  like  cases,  presumptive 
evidence  that  notice  of  dishonor  has  been  sent  or  delivered  at 
the  time  and  in  the  manner  therein  stated,  i 

At  common  law,  what  a  man  has  said,  when  not  under 
oath,  may  not,  in  general,  be  given  in  evidence  when  he  is 
dead ;  because  his  words  may  have  been  misconstrued  or  mis- 
recollected,  as  well  as  because  it  cannot  be  known  that  he  was 
under  any  strong  motive  to  declare  the  truth.  But  what  a 
man  has  actually  done  and  committed  to  writing,  when  under 
obligation  to  do  the  act,  it  being  in  the  course  of  the  business 
he  has  undertaken,  and  he  being  dead,  there  seems  to  be  no 
danger  in  submitting  to  the  consideration  of  a  jury.  2  Accord- 
ingly, it  was  held  competent  even  before  the  passage  of  the 
statute  defining  and  slightly  amplifying  the  right,  to  produce 
the  protest  of  a  deceased  notary,  or  his  register  of  official  acts, 
as  prima  facie  proof  of  demand  and  refusal,  and  notice  to  the 
indorser.  3  On  the  same  principle,  the  memorandum  of  a 
clerk  to  a  bank,  or  to  a  notary,  made  in  the  usual  course  of  his 
employment,  is  competent  evidence  after  his  decease  to  prove 
a  demand  on  the  maker  of  a  note,  and  notice  to  the  indorsers.  4 

In  like  manner,  a  written  memorandum  made  by  the  clerk 
of  a  notary  at  the  time  of  the  transaction,  may  be  read  in 
evidence  as  a  link  in  the  chain  of  testimony,  to  fix  the  time 
when  the  notice  was  given,  though  the  clerk  himself  be  called 
as  a  witness,  and  unable  to  state  the  time  from  his  own  recol- 
lection. 5  And  when  the  entry  in  the  register  is  abbreviated, 

1  2  R.  S.,  382,  3d  ed. 

*  Welsh  v.  Barrett,  15  Mass.  R.,  380.    In  this  ease  the  book  of  a  deceased 
messenger  of  a  bank,  in  which  he  had  entered  memoranda  of  demands  and 
notices  to  the  makers  and  indorsers  of  notes  left  at  the  bank  for  collection,  was 
admitted  in  evidence  to  prove  demand  on  the  maker,  and  notice  to  the  defen- 
dant as  indorser,  of  a  note  so  left  for  collection. 

3  Idem;  and  Halliday  v.  Martinet,  20  John.  R.,  168;  2  Wend.,  369;  6 id.  284. 

4  Sheldon  v.  Benham,  4  Hill  R.,  129;  Nichols  v.  Goldsmith,  7  Wend.,  160. 

*  Hart  v.  Wilson,  2  Wend.,  513;  Shove  v.  Wiley,  18  Pick.,  558. 


EVIDENCE.  697 

it  is  competent  to  prove  by  a  person  skilled  in  such  matters 
what  words  the  abbreviations  stand  for.  i  But  the  entry  of  a 
clerk  in  the  books  of  a  deceased  notary,  cannot  be  read  in 
evidence,  without  calling  the  clerk  as  a  witness;  nor  can  his 
testimony,  given  on  a  former  trial,  be  proved,  on  the  ground 
of  his  absence  from  the  state.  2 

Though  the  entry  of  the  notary  in  his  register,  and  the 
memorandum  of  a  clerk  or  cashier  of  a  bank,  made  in  the  dis- 
charge of  his  duty,  may  be  read  in  evidence  of  the  facts 
stated  after  his  decease,  it  will  not  avail  the  plaintiff  if  the 
statement  itself  be  insufficient  to  prove  the  dishonor  of  the 
instrument,  and  notice  to  the  indorser.  3 

It  was  formerly  held  that  evidence  of  the  contents  of  a 
written  notice  could  not  be  given  without  first  proving  the 
service  of  a  notice  on  the  opposite  party  to  produce  the  written 
notice;  4  but  it  is  now  settled  that  secondary  evidence  may  be 
given  of  a  written  notice  of  the  dishonor  of  a  bill,  upon  which 
the  action  is  brought,  without  shewing  a  previous  notice  to 
produce  the  writing.  5  Nevertheless,  it  is  frequently  advisable 
to  give  the  defendant  notice  to  produce  the  written  notice  or 
letter  notifying  him  of  the  dishonor;  since  by  so  doing,  the 
plaintiff  raises  a  presumption  in  favor  of  the  sufficiency  of  the 
contents  of  the  notice  given.  6  And  where  the  plaintiff  finds 

1  4  Hill  R.,  129. 

*  Wilber  v.  Selden,  6  Cowen  R.,  162.    "  The  rule  as  to  admitting  what  a 
witness  swore  to  upon  a  former  trial,  is  supposed  to  be  this,  that  to  render  such 
testimony  admissible,  it  must  be  between  the  same  parties,  and  the  point  in 
issue  the  same ;  and  the  words  of  the  witness  must  be  given,  not  what  is  sup- 
posed to  be  the  substance  of  his  testimony.    The  witness  must  also  be  dead." 
Decided  in  1S26.    The  witness  must  remember  the  testimony  to  which  he 
swears.    Leightner  v.  Wicke,  4  Serg.  and  R.,  203;  but  the  substance  may  be 
proved,  if  the  witness  can  give  the  substance  of  his  whole  testimony.    Wolf  v. 
Wyette,  11  id.  149,  337;  Cornell  v.  Green,  10  id.  16. 

'20  John.  R. ,168;  Farmer's  Bank  of  Maryland  v.Duval,  7  Gill,  and  John  ,78. 

4  Shaw  v.  Markham,  Peake's  Rep.,  165;  Langdon  v.  Hulls,  5  Esp.  R.,  156. 

'  Kine  v.  Beaumont,  8  Brod.  and  B.,  288;  Ackland  v.  Pearce,  2  Campb., 
601;  Johnson  v.  Haight,  13  John.  R.,  470.  A  copy  of  the  notice  made  at  the 
same  time  may  be  regarded  as  a  duplicate  original.  5  Wheat.,  104;  Paton  v. 
Lent,  4  Duer,  231. 

*  Roberts  v.  Bradshaw,  1  Stark.  R.,  28  j  Hetherington  v.  Kemp,  4  Camp., 
194. 

42 


698  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

it  necessary  to  prove  notice  of  the  dishonor  of  other  bills  than 
that  on  which  the  action  is  founded,  he  must  always  give  the 
defendant  notice  to  produce  the  letters  or  writing  giving  such 
notice,  i 

In  regard  to  the  proof  of  notice,  it  may  be  well  to  refer  to 
some  of  the  cases  shewing  the  manner  in  which  the  service 
may  be  proved.  Thus,  in  one  case  the  notary  called  as  a 
witness,  stated  that  he  presented  the  bill  for  acceptance,  and 
protested  it  for  non-acceptance;  that  it  was  his  usual  practice, 
as  notary,  on  the  evening  of  the  day  of  the  protest,  and  in  all 
cases  of  protest,  to  give  notice  in  writing  to  the  indorsers 
residing  at  a  distance,  by  putting  such  notice  in  the  post-office, 
directed  to  the  party  at  his  place  of  residence;  and  he  had 
no  doubt  notice  in  this  case  was  duly  given,  though  at  that 
distance  of  time  he  could  not  recollect  positively;  and  that  it 
was  possible  he  might  have  given  the  notice  to  the  holder  to 
be  forwarded.  This  evidence,  say  the  court,  was  certainly 
sufficient,  in  the  first  instance,  to  support  the  averment  of 
due  notice,  and  there  being  nothing  to  affect  it,  it  will  sup- 
port the  verdict.  2 

In  another  case,  where  a  party  proved  that  he  wrote  a  letter 
to  the  adverse  party,  and  his  clerk  testified  that  he  copied  it 
in  the  letter  book  produced,  and  that  it  was  his  invariable 
practice  to  carry  the  original  letters  to  the  post-office,  as  soon 
as  he  had  copied  them  in  that  book,  and  that  he  very  seldom 
handed  them  back;  the  evidence  that  the  letter  was  sent,  was 
held  prima  facie  sufficient,  though  the  clerk  did  not  recollect 
putting  the  identical  letter  in  the  post  office.  3 

In  a  still  earlier  case,  the  fact  to  be  established  was  notice 
of  the  dishonor  of  a  bill;  and  the  plaintiff  proved  that  he 
wrote  a  letter  to  the  defendant  containing  such  notice;  that 
the  letter  was  put  on  a  table,  where,  according  to  the  usage 
of  his  counting  house,  letters  for  the  post  were  always 
deposited ;  and  that  a  porter  carried  them  thence  to  the  post- 

1  Mood  and  M.,  335;  6  Bing.,  306;  Cliitty  on  Bills,  658.     . 

a  Miller  v.  Hackley,  5  John.  R.,  375. 

8  Thallhimer  v.  Brinckerhoff,  6  Cowen  R.,  90. 


EVIDENCE. 


699 


office.  But  the  porter  was  not  called,  and  there  was  no  evi- 
dence as  to  what  had  become  of  the  letter,  after  it  was  put  on 
the  table :  Lord  Ellenborough  held  this  insufficient,  saying, 
"  Had  you  called  the  porter,  and  he  had  said  that,  although 
he  had  no  recollection  of  the  letter  in  question,  he  invariably 
carried  to  the  post-office  all  the  letters  found  upon  the  table, 
this  might  have  done."  i 

A  witness  is  called  to  prove  service  of  notice,  and  testifies 
that  the  bank  of  which  he  was  a  clerk  received  a  notice  of 
dishonor,  and  that  he  then  made  the  following  memorandum 
on  the  back  of  it;  "  delivered  like  notice  to  M.  June  4, 1839. 
I.  B.,  Teller;"  and  states  from  the  memorandum  and  the  fact 
of  receiving  the  notice  which  he  recollects,  he  has  no  doubt 
that  he  delivered  the  notice,  although  he  has  no  recollection 
of  having  delivered  it;  his  testimony  is  admissible  evidence 
of  the  service  of  notice.  2 

It  cannot  be  expected  that  a  notary  or  a  clerk,  whose  con- 
stant business  it  is  to  protest  notes  and  bills  and  serve  notices 
of  dishonor,  should  be  able  to  recollect  each  note  or  draft  that 
passes  through  his  hands,  and  the  mailing  of  each  notice; 
such  a  capacity  of  memory  belongs  to  few  persons.  And 
hence  it  is  not  indispensable  that  the  witness  should  state  the 
mailing  of  the  notice  from  distinct  recollection;  the  fact  and 
the  time  of  service  may  be  proved  by  circumstantial  testi- 
mony. 3 

It  is  not  necessary  in  this  place  to  consider,  more  at  length, 
the  mode  of  proving  the  dishonor  of  negotiable  paper,  and 
notice  to  the  drawer  and  indorser :  it  may  be  easily  gathered 
from  what  has  been  said  on  the  subject  in  former  chapters. 

The  old  rule  was,  that  no  party  could  be  called  as  a  witness 
on  the  trial  who  was  interested  in  the  event  of  the  suit,  where 
an  objection  was  made  to  him  on  the  ground  of  interest.  But 

1  Hetherington  v.  Kemp,  4  Campb.,  198;  Toosey  v.  Williams,  1  Mood,  and 
Malk.,  129,  to  the  same  effect. 

8  New  Haven  Co.  Bank  v.  Mitchell,  15  Conn.  R.,  206. 

*  Ball  v.  Bank  of  Alabama,  8  Ala.,  690;  Whiteford  v.  Burkmyer,  1  Gill., 
127;  Bradley  v.  Davis,  26  Maine  R.,  45;  Hatfleld  v.  Perry,  4  Harring.,  463. 


700  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

the  rule  established  by  the  code  of  practice  was,  that  no 
person  offered  as  a  witness,  should  be  excluded  by  reason  of 
his  interest  in  the  event  of  the  action;  and  the  qualification 
was,  that  this  rule  should  not  apply  to  a  party  to  the  action, 
nor  to  any  person  for  whose  immediate  benefit  it  is  prosecuted 
or  defended.  1  But  either  party  may  call  and  examine  his 
adversary  or  the  person  for  whose  immediate  benefit  the  action 
is  prosecuted  or  defended,  as  a  witness :  and  either  party  may 
be  examined  on  behalf  of  his  co-plaintiff  or  a  co-defendant  as 
to  any  matter  in  which  he  is  not  jointly  interested  or  liable 
with  such  co-plaintiff  or  co-defendant,  and  as  to  which  a 
separate  and  not  joint  verdict  or  judgment  may  be  rendered.  2 
By  a  recent  amendment,  a  party  to  an  action  or  proceeding 
may  be  examined  as  a  witness  in  his  own  behalf  the  same  as 
any  other  witness,  when  the  opposite  party  is  living  and  is  the 
real  person  in  interest;  provided  due  notice  of  the  intention 
to  examine  him  is  previously  given.  The  effect  of  this  impor- 
tant change  in  the  law  of  evidence  is  to  bring  the  parties  face 
to  face,  and  let  each  give  his  own  version  of  the  facts  in 
dispute,  under  oath.  3 

1  Code,  §  398,  399.  The  English  Statute  "  for  improving  the  law  of  evi- 
dence," known  as  Lord  Denman's  act,  and  passed  in  1843,  contains  similar 
provisions  to  those  embodied  in  our  Code  of  Procedure.  6  and  7  Viet.  c.  85  j 
see  also  14  and  15  Viet.  c.  99,  §  2;  and  more  recently  still,  16  and  17  Viet.  c.  83. 

9  Chapters  6  and  7  of  the  Code. 

*  An  act  to  amend  Section  Three  Hundred  and  Ninety -nine,  of  the  Code  of 
Procedure.  Passed  April  13,  1857. 

The  People  of  the  State  of  New-York  represented  in  Senate  and  Assembly, 
do  enact  as  follows  : 

§  1.  Section  three  hundred  and  ninety -nine  of  the  Code  of  Procedure,  is 
hereby  amended  so  as  to  read  as  follows: 

A  party  to  an  action  or  proceeding  may  be  examined  as  a,  witness  in  his  own 
behalf,  the  same  as  any  other  witness,  but  such  examination  shall  not  be  had, 
nor  shall  any  person  for  whose  immediate  benefit  the  same  is  prosecuted,  or 
defended,  be  so  examined,  unless  the  adverse  party,  or  person  in  interest  is 
living,  nor  when  the  opposite  party  shall  be  the  assignee,  administrator,  execu- 
tor or  legal  representative  of  a  deceased  person,  nor  unless  ten  daysr  notice  of 
such  intended  examination  of  the  party  or  person  interested,  specifying  the 
points  upon  which  such  party  or  person  is  intended  to  be  examined,  shall  be 
given  in  writing  to  the  adverse  party,  except  that,  in  special  proceedings  of  a 
summary  nature,  such  reasonable  notice  of  such  intended  examination  shall 


EVIDENCE,  701 

The  making,  indorsing  and  accepting  of  notes,  checks  and 
drafts  is  generally  shewn  by  proving  the  signature  of  the 
maker,  indorser  or  acceptor,  which  may  be  done  as  in  other 
cases  where  it  becomes  necessary  to  prove  the  signature  of  a 
party  to  a  contract.  If  there  be  a  subscribing  witness,  the 
rule  is  that  he  must  be  called  on  the  trial  to  prove  the  signa- 
ture of  the  party,  or  his  absence  must  be  accounted  for :  i  he 
must  be  called  unless  he  be  dead,  insane  or  disqualified  to 
testify,  or  beyond  the  jurisdiction  of  the  court.  2  If  there  be 
several  subscribing  witnesses,  it  is  enough  to  call  one  of  them; 
but  if  there  be  doubt  as  to  proof  of  signature,  it  is  advisable 
to  call  them  all.  3 

The  absence  of  the  subscribing  witness  having  been  accounted 

1  January  v.  Goodman,  1  Dall.,  208  j  Stone  v.  Metcalf,  1  Stark.,  63. 

«  Richards  v.  Franklin,  9  Car.  and  Payne,  221  j  Crank  v.  Frith,  2  Mood,  and 
Rob.,  262. 

1  Stra.,  1245;  Burr.,  2224;  17.and  18  Viet.,  chap.  25,  §  26.  provides  that  it 
shall  not  be  necessary  to  prove  by  the  attesting  witness  any  instrument  to  the 
validity  of  which  attestation  is  not  requisite;  and  that  such  instrument  may 
be  proved  by  admission  or  otherwise,  as  if  there  had  been  no  attesting  witness 
thereto. 


be  given,  as  shall  be  prescribed  by  the  court  or  judge.  And  when  notice  of 
such  intended  examination  shall  be  given  in  an  action,  or  proceeding,  in  which 
the  opposite  party  shall  reside  out  of  the  jurisdiction  of  the  court,  such  party 
may  be  examined  by  commission  issued  and  executed  as  now  provided  by  law ; 
and  whenever  a  party  or  person  in  interest  has  been  examined  under  the  pro- 
visions of  this  section,  the  other  party  or  person  in  interest  may  offer  himself 
as  a  witness  in  his  own  behalf,  and  shall  be  so  received.  When  an  assignor  of 
a  thing  in  action  or  contract,  is  examined  as  a  witness  on  behalf  of  any  person 
deriving  title  through  or  from  him,  the  adverse  party  may  offer  himself  as  a 
witness  to  the  same  matter  in  his  own  behalf,  and  shall  be  so  received,  and  to 
any  matter  that  will  discharge  him  from  any  liability  that  the  testimony  of  the 
assignor  tends  to  render  him  liable  for.  But  such  assignor  shall  not  be  admit- 
ted to  be  examined  in  behalf  of  any  person  deriving  title  through  or  from  him, 
against  an  assignee,  or  an  executor,  or  administrator,  unless  the  other*  party  to 
such  contract  or  thing  in  action,  whom  the  defendant  or  plaintiff  represents,  is 
living,  and  his  testimony  can  be  procured  for  such  examination,  nor  unless  at 
least  ten  days'  notice  of  such  intended  examination  of  the  assignor,  specifying 
the  points  upon  which  he  is  intended  to  be  examined,  shall  be  given  in  writing 
to  the  adverse  party. 
§  '2.  This  act  shall  take  effect  immediately. 


702  BILLS  OF   EXCHANGE   AND  PROMISSORY  NOTES. 

for,  it  is  in  general  sufficient  to  prove  Ms  handwriting ;  i  and 
where  the  attesting  witness  has  only  made  his  mark  to  the 
instrument,  it  has  been  held  enough  to  prove  the  handwriting 
of  the  party  executing  it.  2  It  has  been  asserted  that  proof  of 
the  handwriting  of  the  subscribing  witness  is  not  of  itself 
sufficient  proof  of  the  execution  of  the  contract — that  there 
should  be  at  least  some  evidence  given  to  establish  the  iden- 
tity of  the  party  executing  it,  or  to  connect  the  defendant  with 
the  transaction;  such  as  that  the  defendant  was  present  when 
the  note  or  contract  was  executed.  3 

The  presumption  is  that  what  the  subscribing  witness  has 
attested  did  take  place;  and  hence,  as  laid  down  by  high 
authority,  proof  of  his  handwriting  will  ordinarily  make  out 
the  execution  sufficiently  to  allow  the  instrument  to  be  read 
in  evidence.  4  But  it  is  conceded  there  are  cases  where  ft  may 
be  rendered  incumbent  on  the  party  proving  the  instrument  to 
give  some  evidence  to  establish  the  identity  of  the  party  exe- 
cuting it;  and  it  is  clear  that  his  handwriting  is  the  most 
satisfactory  evidence  that  can  be  given  on  that  point,  while  it 
is  agreed  that  much  slighter  evidence  will  be  sufficient.  5 

1  Chitty  on  Bills,  633.  Subscribing  witness  is  one  who  was  present  when  the 
instrument  was  executed,  and  who  at  that  time  subscribed  his  name  to  it  as  a 
witness  of  the  execution.  Henry  v.  Bishop,  2  Wend.,  575.  If  he  is  called  in 
by  the  parties  immediately  afterwards,  and  told  that  it  is  their  deed  or  agree- 
ment, and  requested  to  subscribe  his  name  as  a  witness,  that  will  be  enough. 
The  execution  by  the  parties,  and  the  subscribing  by  the  witness,  are  then 
considered  as  parts  of  the  same  transaction.  Hallenback  v.  Fleming,  6  Hill 
R.,  303. 

8  Watts  v.  Kilburn,  7  Geo.  R.,  356,  decided  in  1849;  contra,  Kinney  T. 
Flynn,  2  R.  I.,  319,  decided  in  1852. 

3  Nelson  v.  Whittall,  1  Barn,  and  Aid.,  21,  per  Bayley,  J. 

4  Cowen  and  HilFs  Notes,  part  2,  p.  394,  and  the  authorities  there  cited. 
'Idem;  Harrington  v.  Fry,  Ryan  and  M.,  90;  Jackson  v.   Waldron,  13 

Wend.,  183;  Clark  v.  Saunderson,  3  Bin.  R.,  192;  Robards  v.  Wolfe,  1  Dana 
R.,  155;  2  Phillipps  Ev.,  214,  215,  6th  Amer.  from  the  9th  London  ed.;  Byles 
on  Bills,  353.  The  authorities  are  very  fully  collected  in  Cowen  and  Hill's 
Notes,  and  accompanied  with  this  remark:  "Most  of  the  American  cases, 
supra,  when  they  have  either  required  or  recommended  proof  beyond  the 
handwriting  of  the  witnesses,  have  done  so  upon  the  ground  that  it  would 
furnish  additional  assurance  of  execution ;  and  not  with  a  view  to  the  identity 
of  the  party.  Indeed,  so  far  as  merely  identifying  the  party  was  concerned, 
courts  have  usually  assumed  that  identity  of  name  was  sufficient,  in  the  first 


EVIDENCE.  703 

The  evidence  of  the  subscribing  witness  is  not  conclusive 
upon  the  parties;  if  he  does  not  recollect  his  signature,  other 
witnesses  may  be  called  to  prove  it  genuine,  i  And  where 
the  instrument  is  not  under  seal  and  does  not  require  a  sub- 
scribing witness,  such  as  a  promissory  note,  the  confession  of 
the  party  that  he  gave  the  note,  is  as  high  proof  as  that  derived 
from  a  subscribing  witness,  and  will  dispense  with  the  neces- 
sity of  calling  him.  2  But  it  must  be  shewn  clearly  that  the 
confession  of  the  maker  had  reference  to  the  note  in  question.  3 
And  it  has  been  held  that  proof  of  the  defendant's  admission 
that  he  had  executed  a  note  answering  the  description  of  the 
note  in  suit,  without  other  proof  of  identity,  is  not  sufficient.  4 
But  such  an  admission  is  rendered  sufficient,  when  the  note 
is  spoken  of  as  made  payable  to  the  order  of  a  particular  per- 
son, by  proving  the  payee's  indorsement  thereon.  5 

It  is  of  course  necessary  that  the  witness  called  to  prove 
the  signature  of  a  party  to  the  action,  should  be  acquainted 
with  his  handwriting.  Unless  he  saw  him  subscribe  the 
instrument,  or  was  invited  by  him  to  witness  its  execution,  he 
can  speak  only  from  his  knowledge  of  the  signature  or  hand- 
writing of  the  party.  If  he  has  seen  him  write  or  has  had 
correspondence  with  him,  he  may  be  asked  whether  he  believes 
the  signature  to  be  genuine;  and  his  answer  in  the  affirma- 
tive will  be  competent  testimony.  6  On  the  contrary,  if  the 
witness  has  no  previous  knowledge  of  the  hand,  he  is  not 

1  Quimby  v.  Buzzell,  4  Shepley,  470. 
1  Hall  v.  Phelps,  2  John.  R.,  451. 

*  Shaver  v.  Ehle,  16  John.  R.,  201. 

4  Palmer  v.  Manning,  4  Denio  R.,  181.  The  note  was  not  shewn  by  the 
witness  testifying  to  the  admission,  and  the  decision  was  made  on  the  authority 
of  Shaver  v.  Ehle,  supra. 

*  Pentz  v.  Wlnterbottom,  5  Denio,  51. 

*  Hopkins  v.  Megquire,  35  Maine  R.,  78. 


instance,  as  presumptive  evidence  of  identity  of  person.  And  so  are  the 
majority  of  the  English  cases,  notwithstanding  the  opinion  of  Bayley,  J.,  in 
Nelson  v  Whittall.  And  the  late  English  decisions  ara  to  the  same  effect. 
Byles  on  Bills,  353. 


704  BILLS  OF  EXCHANGE  AND    PROMISSORY    NOTES. 

competent  to  speak  on  the  subject,  from  a  comparison  of 
hands,  i 

The  witness  is  competent  to  testify,  though  he  has  seen  the 
party  write  only  once,  in  the  ordinary  course  of  business;  2  but 
he  is  not  competent,  if  it  appear  that  he  saw  the  party  write 
only  once  previous  to  the  trial,  for  the  purpose  of  making  him 
a  witness  to  the  signature.  3  It  must  appear  that  he  has  had 
a  fair  opportunity  to  become  acquainted  with  the  hand  writing 
or  the  signature  he  is  called  to  prove.  4  And  if  that  is  shewn 
it  is  sufficient,  though  he  saw  the  party  write  only  his  surname 
or  the  initials  to  his  name,  writing  the  latter  in  a  peculiar 
manner;  5  and  an  instrument  executed  by  mark  may  be  proved 
by  a  person  who  has  seen  the  party  so  execute  instruments.  6 

When  the  witness  has  written  letters  to  the  party  and 
received  answers  in  return,  apparently  signed  by  him,  the 
fair  inference  is  that  the  answers  were  written  and  slent  by  the 
person  from  whom  they  purport  to  have  come  j  7  and  where 
the  witness  has  seen  the  hand-writing  of  the  party  or  his 
signature  upon  instruments,  such  as  bills  or  notes,  purporting 
to  bind  him,  and  he  has  admitted  them  genuine  by  paying 
them,  he  is  qualified  to  testify.  8  But  he  is  not  so  qualified 
from  having  merely  seen  letters  purporting  to  have  been 

1 1  Esp.  Gas.,  14;  Titford  v.  Knott,  2  John.  Cas.,  211.  "  The  handwriting 
of  the  maker  or  indorser  of  a  note  may  be  proved  by  witnesses  from  their  pre- 
vious knowledge  of  his  hand  writing,  derived  from  having  seen  the  person 
write,  or  from  authentic  papers,  received  in  the  course  of  business  j  but  if  the 
witness  has  no  previous  knowledge  of  the  handwriting,  he  cannot  be  permitted 
to  decide  upon  it  in  court,  from  a  comparison  of  hands. 

9  Ganells  v.  Alexander,  4  Esp.  R.,  37;  Smith  v.  "Walton,  8  Gill.  (Md.)  R., 
77;  Edelenv.  Gough,  id  87,  decided  in  1849. 

8  Stranger  v.  Searle,  1  Esp..  14. 

4  Utica  Ins.  Co.  v.  Badger,  3  Wend.,  102. 

8  Lewis  v.  Sapio,  1  Wood,  and  Malk.,  39;  5  John.  R.,  144;  Jackson  v.  Van 
Dusen,  was  the  case  of  a  subscribing  witness  to  a  will.  Merchant's  Bank  v. 
Spicer,  6  Wend.,  443;  Brown  v.  The  Butcher's  and  Drover's  Bank,  6  Hill, 
443,  and  cases  there  cited;  Cabarga  v.  Seeger,  17  Penn.  State  R.,  514,  decided 
in  1851. 

6  George  v.  Surrey,  Mood.  &  Malk.  516;  6  Hill  R.  443. 

7  Chitty  on  Bills,  630. 

8  Johnson  v.  Daverne,  19  John.  R.,  134;  Gordon  v.  Price,  10  Iredell,  (N. 
Car.)  385,  decided  in  1849. 


EVIDENCE.  706 

Written  by  him;  he  must  have  seen  genuine  specimens  of  his 
handwriting,  and  the  fact  that  they  were  genuine  must  be 
proved  by  either  positive  or  presumptive  evidence,  i 

The  general  rule  here  is  that  a  witness  having  no  previous 
knowledge  of  the  handwriting,  cannot  be  allowed  to  compare 
the  signature  in  question  With  one  that  is  genuine,  and  give 
his  opinion  founded  solely  on  a  comparison  of  the  hands,  or 
the  juxtaposition  of  the   two  writings  for  the  purpose   of 
ascertaining  whether  both  were  written  by  the  same  indi- 
vidual. 2    Experts,  or  persons   supposed   to   be   skillful  in 
detecting  forgeries,  have  been  allowed  in  some  cases,  without 
previous  knowledge  of  the  party's  handwriting,  to  give  their 
opinion   on   the   question   whether  the  paper  or   signature 
was  written  in  a  natural  or  imitated  hand; 3  but  such  opin- 
ions, if  admissible  in  evidence  at  all,  are  not  deemed  of  much 
value.     Chief  Justice  Bronson  commenting  upon  the  subject, 
says :     "  On  the  whole,  I  think  the  weight  of  authority  is 
against  receiving  such  evidence,  and  that  it  should  be  rejected. 
There  are  many  things  which  affect  the  genuine  handwriting 
of  a  party,  such  as  his  age,  health,  habits,  state  of  mind,  posi- 
tion, haste,  penmanship,  and  writing  materials;  and  the  opin- 
ion or  belief  of  a  witness  who  judges  solely  from  an  inspec- 
tion of  the  instrument  alleged   to   be  forged,  rests  on  no 
solid   foundation.     It  is   impossible    that  he   should  know 
whether  an  instrument  or  signature  is  genuine  or  only  an 
imitation,  when  he  has  never  seen  the  original.     At  least, 
he  can  only  give  us  a  conjectural  opinion,  which  is  much  too 
loose  and  unsatisfactory  to  lay  the  foundation  for  a  judicial 
decision."  4 

1  Cunningham  v.  Hudson  River  Bank,  21  Wend.,  557 ;  Titford  v.  Knott,  supra. 

2  Wilson  v.  Kirkland,  5  Hill  R.,  182;  The  People  v.  Spooner,  1  Denio,  348 
and  cases  there  cited. 

1  The  King  v.  Caton,  4  Esp.  R.,  117;  Goodtitle  v.  Braham,  4  Term  R.,  497} 
Strather  v.  Lucas,  7  Peters  R.,  763;  Cowen  &.  Hill's  Notes,  part  2,  page  478 
reviewing  the  authorities  on  the  subject  of  a  comparison  of  hands,  by  which 
is  now  meant  an  actual  comparison  of  two  writings,  with  each  other,  in  order 
to  ascertain  whether  both  were  written  by  the  same  person.  A  species  of  tes- 
timony which,  if  allowed,  might  branch  out  into  a  controversy  on  collateral 
writing. 

4 1  Denio,  346 ;  Gurney  v.  Langland,  6  Barn.  &  Aid.  330. 


706  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

In  some  of  the  states  such  testimony  is  received  and  sub- 
mitted to  the  discretion  of  the  jury,  to  give  it  such  weight  as 
it  may  deserve,  i 

In  itself  considered,  there  is  no  reason  why  the  signature 
in  dispute  should  not  be  compared  with  signatures  in  evidence 
or  admitted  to  be  genuine;  for  that  is  precisely  what  a  witness 
acquainted  with  the  party's  handwriting  does  intuitively, 
comparing  the  writing  presented  with  the  exemplar  in  his 
mind.  The  objection  to  the  testimony  does  not  therefore 
apply  where  the  comparison  is  made  with  the  genuine  writing 
already  in  evidence,  by  a  witness  qualified  to  speak  on  the 
subject  by  his  previous  knowledge.  2  Nor  does  there  appear 
to  be  any  good  reason  why  an  expert,  having  no  previous 
knowledge  of  the  handwriting,  may  not  be  allowed  to  compare 
genuine  signatures  in  evidence  with  the  signature  in  contro- 
versy, and  give  his  opinion  in  regard  to  its  genuineness.  3 

A  person  may  be  rendered  competent  to  prove  the  hand- 
writing of  a  party  without  ever  having  seen  him  write;  it  is 
enough  if  he  has  once  seen  the  signature  admitted  by  him  to 
be  his,  or  has  had  correspondence  with  him.  4  Now  an  expert 
who  is  shewn  the  genuine  hand-writing,  has  at  least  an  equal 
oppoitunity  with  such  a  witness  to  detect  a  forgery  of  that 
hand;  and  all  the  authorities  agree  that  a  witness  who  is 
acquainted  with  the  hand- writing  of  the  party  may  not  only 

1  Moody  v.  Rowell,  17  Pick.,  490;  Lyon  v.  Lyman,  9  Conn.  R.,  55;  Stone  v. 
Hubbard,  7  Gush.  595,  decided  in  1851.      In  this  case  two  witnesses,  Cashiers 
of  banks,  were  allowed  to  testify  in  relation  to  the  date  of  a  note,  whether  a 
certain  mark  should  be  read  2  or  4,  though  they  had  no  knowledge  of  the  hand 
writing. 

In  Doe  v.  Luckermore,  5  Adol.  &  Ellis,  703,  Lord  Denman  said,  "  I  do  not 
indeed  understand  how  such  evidence  could  be  rejected,  if  a  witness  should 
swear  that  his  habits  gave  him  the  requisite  skill;  but  I  do  not  think  that 
either  court  or  jury  would  believe  him,  or  place  the  least  reliance  on  his  opin- 
ions. Practically  therefore,  this  chapter  may  be  considered  as  expunged  from 
the  book  of  evidence." 

2  Greenleaf  on  Ev.  §  576;  Doe  v.  Luckermore,  supra,  per  Patterson,  J  ;  So- 
lita  v.  Garrow,  1  Moo.  &  Rob.  133 ;  5  C.  &  P.,  126  ;  Commonwealth  v.  Web- 
ster, 5  Gush.,  295,  decided  in  1850. 

3  Hicks  v.  Person,  19  Ohio  R.,  426,  decided  in  1850. 

4  Gordon  v.  Price,  supra;  and  Smith  v.  "Walton,  supra;  and  Cabarga  v. 
Seeger,  supra. 


EVIDENCE.        .  707 

compare  it  with  the  genuine  signature  before  him,  but  may 
also  compare  it  with  his  recollection  of  the  party's  hand- 
writing, describing  the  resemblance  or  want  of  resemblance 
between  them,  i 

A  recent  English  statute  declares  that,  comparison  of  a 
disputed  writing  with  any  writing  proved  to  the  satisfaction 
of  the  judge  to  be  genuine,  shall  be  permitted  to  be  made  by 
witnesses;  and  such  writings,  and  the  evidence  of  witnesses 
respecting  the  same,  may  be  submitted  to  the  court  and  jury 
as  evidence  of  the  genuineness,  or  otherwise,  of  the  writing 
in  dispute.  2 

The  signature  to  a  contract  being  proved,  its  contents  are 
proved;  and  the  instrument  is  supposed  to  have  been  executed 

on  the  day  of  its  date.  3 

» 

Hopkins  v.  Megquire,  25  Maine  R.,  78,  decided  in  1852;  Sweetzer  T. 
Lowell,  33  id.  446. 

1 17  and  18  Viet.  ch.  125,  §  27,  enacted  in  August,  1854. 
1  Glenn  v.  Grover  and  al.,  8  Md.,  212. 


CHAPTER  XIL 

DAMAGES  OR  SUM  RECOVERABLE* 

Measured  by  the  standard  of  natural  justice,  the  remedy 
for  the  breach  of  a  contract  for  the  payment  of  money,  ought 
to  be  such  as  to  repair  the  actual  damages  which  the  injured 
party  has  sustained.  But  this  would  involve  an  inquiry  into 
the  circumstances  of  each  particular  case,  into  the  embarrass- 
ments produced  by  the  default,  and  into  the  injuries  sustained 
by  loss  of  credit  or  loss  of  advantageous  bargains-^considera- 
tions  perfectly  appropriate  in  an  ethical  point  of  view,  but 
not  capable  of  being  entertained  by  a  court,  acting  on  uniform 
rules  of  law.  Hence,  every  nation,  whether  governed  by  the 
civil  or  common  law,  has  established  a  certain  common  meas- 
ure of  reparation  for  the  detention  of  money  not  paid  according 
to  contract^  which  is  usually  calculated  at  a  certain  and  legal 
rate  of  interest,  i  Interest  is,  therefore,  the  legal  compensa- 
tion or  damage  allowed  for  the  detention  of  a  debt.  2 

The  statute  prescribes  the  rate  of  interest  to  be  allowed 
Upon  the  loan  or  forbearance  of  any  money,  goods  or  things 
in  action^  and  leaves  the  parties  free  to  make  what  stipulations 
they  please  with  respect  to  the  payment  of  interest  on  the 
sum  secured,  during  the  currency  of  the  credit.  3  That  is  to 
say,  the  law  fixes  the  rate  of  interest,  but  does  not  imply  an 
engagement  to  pay  at  that  or  any  other  rate.  4  For  instance, 
a  note  or  bond,  does  not  carry  interest  unless  it  be  drawn  pay- 
able with  interest;  5  and  the  courts  do  not  construe  the  contract 

1  Sedgwick  on  Damages,  233-236;  Curtis  v.  Inerarity,  6  How.  U.  S..  146. 
a  Edwards  on  Bailm.,  241 ;  Van  Rensselaer  v.  Jewett,  6  Denio,  121  j  S.  C., 
2  Comst.  R.,  135. 

•  2  R.  S.,  56,  3d  ed;  Chitty  on  Bills,  679. 
4  13  Wend.,  640;  15  Wend»,  80. 
8  Williams  v.  Sherman,  7  Wend.,  109  j  Gaylord  v.  Van  Loan,  16  id.  310. 


DAMAGES    OK   SUM    RECOVERABLE.  709 

so  as  to  vary  its  terms  in  the  slightest  degree,  i  The  instru- 
ment speaks  for  itself;  and  whether  it  draw  interest  annually 
or  semi-annually  upon  the  principal,  or  in  any  other  manner, 
the  time  and  mode  of  payment  must  depend  upon  the  agree- 
ment of  the  parties  as  expressed  in  the  contract.  2  If  the 
promisor  undertakes  to  pay  a  given  sum  "  in  ten  equal  annual 
payments,  with  interest,"  interest  from  date  on  each  instal- 
ment falls  due  with  it;  3  and  if  he  engages  to  pay  a  given  sum 
"  two  years  after  date,  with  interest,"  both  the  principal  and 
interest  will  fall  due  at  the  end  of  the  term;  and  if  he  makes 
a  note  promising  to  pay  a  certain  sum  in  three  equal  annual 
payments,  with  interest  to  be  paid  annually,  he  is  bound  to 
pay  interest  on  the  principal  unpaid  each  year.  4 

Where  a  party  contracts  to  pay  a  given  sum  within  a  cer- 
tain time,  the  agreement  does  not  extend  beyond  the  time 
specified  for  payment;  and  where  the  engagement  is  to  pay 
interest  at  a  less  rate  than  the  law  allows,  the  payee  has  a 
right  to  demand  and  recover  lawful  interest  from  the  day  of 
the  default.  5  He  has  a  right  to  demand  the  principal  on  the 

1  Bander  v.  Bander,  7  Barb.  R..  560.  A  note  in  these  words  :  "  For  value 
received  I  promise  to  pay  M.  Bander,  or  bearer,  the  sum  of  $1000,  payable  in 
ten  annual  instalments,  with  use,"  is  an  agreement  ^to  pay  interest  on  each 
instalment  as  it  falls  due. 

1  Fellows  v.  Harrington,  3  Barb.  Ch.  R.,  652. 

*  French  v.  Kennedy,  7  Barb.  R.,  452;  Bander  v.  Bander,  supra. 

4  Bannister  v.  Roberts,  35  Maine,  75.  Assumpsit  on  a  note  promising  to 
pay  $2250,  in  three  equal  annual  payments,  with  interest,  to  be  paid  annually. 
At  the  end  of  the  first  year,  the  instalment  which  then  became  payable  with 
interest  upon  it,  was  paid;  but  the  interest  upon  the  other  instalments  was 
demanded  and  refused ;  and  at  the  end  of  the  second  year  the  second  instal- 
ment with  interest  upon  it  was  paid.  And  this  action  being  brought  for 
unpaid  interest  in  the  third  instalment,  it  was  held  that  the  plaintiff  was  enti- 
tled to  recover.  When  a  note  is  made  payable  with  interest  annually,  whether 
by  instalment  or  not,  the  interest  accruing  before  the  whole  of  the  principal 
becomes  payable  may  be  collected,  if  a  suit  be  commenced  to  recover  it  before 
the  whole  of  the  principal  becomes  payable.  If  no  suit  be  commenced  for 
that  purpose  until  after  that  time,  interest  upon  the  interest  not  paid,  from 
the  time  when  it  should  have  been  paid,  cannot  be  recovered  in  a  suit  for  the 
principal  and  interest  due  upon  the  note;"  citing  Hastings  v.  Wiswell,  8  Mass., 
455;  Doe  v.  Warren,  7  Greenl.,  48;  Wilcox  v.  Howland,  23  Pick.,  167;  Ferry 
v.  Ferry,  2  Gush.,  92,  is  to  the  same  effect. 

6  United  States  Bank  v.  Chapin  and  another,  9  Wend.,  471  j.  19  John.  R.» 
246. 


710  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

day  it  becomes  payable,  and  the  law  gives  him,  in  this  state, 
seven  per  cent  for  the  loan  or  forbearance  of  money,  as  a  com- 
pensation for  the  use  or  detention  of  the  debt,  i 

There  may  be  an  implied  agreement  between  the  parties  to 
abide  by  the  terms  of  the  contract  after  default  made.  Thus, 
11  where  a  mortgagee  has  contracted  to  receive  a  particular 
rate  of  interest,  less  than  the  legal  rate,  during  the  time  of 
credit  agreed  upon  by  the  parties,  if  he  suffers  the  mortgagor 
to  remain  in  possession  after  the  mortgage  money  becomes  due 
and  payable,  it  may  perhaps  be  reasonable  to  presume  that 
the  understanding  of  the  parties  is  that  the  interest  shall 
continue  at  the  same  rate  until  the  creditor  thinks  proper  to 
demand  payment.  But  there  can  be  no  such  presumption 
where,  as  in  this  case,  the  mortgagee  attempts  to  foreclose, 
and  takes  possession  of  the  mortgaged  premises  under  the 

1  Ludwick  v.  Huntzinger,  5  Watts  and  Serg.,  51.  A  question  arose  on  the 
trial  of  this  cause  as  to  the  rate  of  interest  which  the  plaintiffs  were  entitled  to 
recover  from  the  time  the  hood  became  payable.  It  was  dated  the  first  of 
July,  1830,  conditioned  for  the  payment  of  $1143.75,  on  the  first  of  April, 
1832,  with  three  per  cent  interest  from  the  date  thereof,  and  the  court  advised 
the  jury  to  allow  interest  at  the  rate  agreed  on  in  the  contract  until  it  became 
due,  and  after  that  at  the  rate  of  six  per  cent  or  legal  interest.  And  the 
advice  was  held  correct.  '  Whenever  one  man  binds  himself  to  pay  a  specific 
sum  of  money  to  another  by  a  certain  day,  and  he  fails  to  do  so,  he  becomes 
liable  by  the  law  of  the  state  (Pennsylvania,)  to  pay  interest  thereon  at  the 
rate  of  six  per  cent  per  annum,  afterwards,  as  long  as  he  shall  improperly 
withhold  payment  thereof,  unless  perhaps,  it  should  be  expressly  agreed  other- 
wise by  the  parties.  But  the  agreement  of  the  parties  here,  in  respect  to  the 
interest,  extended  no  farther  than  to  the  period  fixed  for  the  payment  of  the 
debt  or  principal ;  after  that  it  was  left  to  the  mere  operation  of  law,  which 
allows  six  per  cent." 

Washington  v.  The  Planter's  Bank,  1  How.  Miss.,  230.  The  interest  is  an 
incident  which  follows  of  course  after  the  debt  becomes  due. 

Jones  v.  Mallory  and  another,  22  Conn.  R.,  386,  decided  in  1853.  "  Interest 
by  our  law  is  allowed,  on  the  ground  of  some  contract  expressed  or  implied  to 
pay  it,  or  as  damages  for  the  breach  of  some  contract,  or  the  violation  of  some 
duty."  Sellech  v.  French,  1  Conn.  R.,  33. 

Whitworth  et  ux.  v.  Hart  et  al.,  22  Ala.  N.  S.,  343,  decided  in  1853.  "  In- 
terest is  but  a  just  compensation  for  withholding  the  principal  sum ;  and  when 
the  principal  sum  is  ascertained  to  be  due  at  a  particular  period,  and  remains 
unpaid  without  a  sufficient  excuse  for  its  non-payment,  the  interest  follows  as 
an  incident."  Godwin  v.  McGehee,  19  Ala.,  468. 


DAMAGES    OR    SUM    RECOVERABLE.  711 

supposition  that  he  has  actually  acquired  the  equity  of 
redemption  as  a  substitute  for  his  debt."  i 

A  demand  of  payment  would  have  the  same  effect  as  the 
commencement  of  a  suit;  for  the  bringing  of  an  action  operates 
upon  the  rights  of  the  parties  as  a  demand.  If  a  banker, 
having  a  large  sum  of  money  belonging  to  a  customer  on 
deposit,  on  an  understanding  that  five  per  cent  shall  be  paid 
for  the  use  of  it,  denies  the  fact  on  the  death  of  the  customer, 
and  conceals  the  evidence  of  the  indebtedness,  his  conduct 
abrogates  the  agreement  and  subjects  him  to  the  legal  rate  of 
interest  from  the  day  of  demand  and  denial.  2 

The  decisions  on  the  subject  are  not  entirely  uniform.  But 
it  is  clear  that  the  payee  of  a  note,  or  bond  for  the  payment 
of  money,  is  entitled  to  call  for  the  amount  due  on  the  day 
the  same  becomes  payable,  and  that  the  law  awards  legal 
interest  on  the  sum  due  from  the  time  the  same  ought  to  have 
been  paid,  by  way  of  damages.  And  it  must  follow  that  the 
payee  in  a  contract  drawing  less  than  legal  interest,  has  a 
right  to  recover  on  the  instrument  an  amount  equal  to  lawful 
interest  from  the  appointed  day  of  payment.  On  the  other 
hand,  it  is  not  so  clear  that  the  payee  of  a  note,  bearing  a  rate 
of  interest  higher  than  that  established  by  law,  cannot  recover 
according  to  the  terms  of  the  contract  until  it  is  merged  in  a 
judgment.  The  payor  in  this  case  is  at  liberty  and  is  bound 
to  discharge  the  debt  on  the  day  it  becomes  due;  and  if  the 
law  permits  him  to  detain  the  money  at  a  less  rate  of  interest 
than  that  which  he  has  stipulated  to  pay,  it  enables  him  to 
derive  an  advantage  from  his  own  default.  3 

1  Bell  v.  The  Mayor  of  New-York,  10  Paige,  49, 69,  per  Chancellor  Walworth. 
In  Miller  v.  Boroughs,  4  John.  Ch.  R.,  436,  on  a  bond  carrying  six  per  cent., 
Chancellor  Kent  ordered  interest  to  be  computed  at  that  rate  until  the  con- 
tract was  merged  in  the  decree. 

*  Trustees  of  the  Leake  &  Watts  Orphan  House  v.  Lawrence,  11  Paige.  Ch. 
E.,  80;  S.  C.,2Denio,  677. 

'Hopkins  v.  Crittenden,  10  Texas  R.,  189.  This  suit  was  brought  upon  a 
promissory  note  dated  Jan.  15,  1849,  payable  on  the  25th  day  of  December 
following,  "  with  ten  per  cent,  interest  from  date,"  and  the  Supreme  Court  of 
Texas  allowed  ten  per  cent,  after  the  note  became  due,  as  well  as  before,  the 
legal  rate  being  eight  per  cent.,  and  the  parties  having  a  right  to  agree  for  any 
rate  not  exceeding  twelve  per  cent. 


712  BILLS    OF    EXCHANGE  AND  PKOMISSOKY   NOTES. 

The  rule  has  been  laid  down  in  this  state  in  these  terms : 
Whenever  a  debtor  is  in  default  for  not  paying  money, 
delivering  property,  or  rendering  services  in  pursuance  of  his 
contract,  justice  requires  that  he  should  indemnify  the  credi- 
tor for  the  wrong  which  has  been  done  him;  and  a  just 
indemnity,  though  it  may  sometimes  be  more,  can  never  be 
less  than  the  specified  amount  of  money,  or  the  value  of  the 
property  or  services  at  the  time  they  should  have  been  paid 
or  rendered,  with  interest  from  the  time  of  the  default  until 
the  obligation  is  discharged.  And  if  the  creditor  is  obliged 
to  resort  to  the  courts  for  redress,  he  ought,  in  all  such  cases, 
to  recover  interest,  in  addition  to  the  debt,  by  way  of 
damages,  i 

A  note  or  bond  specifying  no  time  of  payment  is  due 
immediately,  and  bears  interest  from  date.  2  And  a  note 
payable  on  demand  draws  interest  from  the  time  when  default 
is  made  in  payment;  but  a  note  payable  on  demand  with  law- 
ful interest,  bears  interest  from  date.  3  Here,  as  in  other 
cases,  the  terms  of  the  contract  determine  whether  or  not 

'Van  Rensselaer  v.  Jewett,  5  Denio,  135 ;  2  Comst.,  135.  The  action  was 
on  a  covenant  for  the  payment  of  rent,  and  it  was  held  that  the  interest  was 
recoverable  as  matter  of  law,  from  the  time  the  rent  fell  due,  although  it  was 
payable  in  wheat  and  services,  the  value  of  which  was  unliquidated  by  the 
contract. 

'Francis  v.  Castleman,  4  Bibb  R.  282;  Purdy  v.  Philips,  1  Kernan  R.,  406 j 
Wenman  v.  The  Mohawk  Ins.  Co.,  13  Wend.,  267;  Rens.  Glass  Fac.  v.  Reid, 
5  Cowen  R.,  687. 

3  Hopper  v.  Richmond,  1  Stark.  507.  Per  Senator  Spencer,  5  Cowen,  R., 
611;  Stowits  v.  Bank  of  Troy,  21  Wend.,  186. 


Buckhart  v.  Sappington,  1  Greene  (Iowa)  R.,  66.  The  legal  rate  of  inte- 
rest in  Iowa  is  six  per  cent.,  but  the  parties  may  contract  for  twelve  or  any 
thing  less.  And,  on  a  note  drawing  ten  per  cent.,  it  was  held  in  this  case 
erroneous  to  make  the  judgment  draw  the  same  rate  :  "  it  should  draw  only 
six  per  centum  as  regulated  by  statute."  It  seems  to  have  been  taken  for 
granted  that  the  payee  was  entitled  to  ten  per  cent,  up  to  the  time  of  the 
entry  of  judgment.  The  decision  was  made  in  1847.  The  previous  statute  of 
that  State  allowed  the  parties  to  contract  for  interest  as  high  as  twenty  per 
cent. — a  fact  which  shews  how  much  the  value  of  money  is  enhanced  by  the 
rapid  growth  and  development  of  a  new  State.  See  Wilkerson  v.  Daniels,  1 
Greene,  (Iowa)  R.,  179-. 


DAMAGES   OR    SUM   RECOVERABLE.  713 

interest  is  to  be  paid :  and  it  has  been  held  competent  for  the 
parties  to  stipulate  for  interest  from  date,  by  way  of  penalty 
or  damages  for  the  failure  to  pay  at  the  maturity  of  the  note,  i 
So,  also  the  parties  are  at  liberty  to  stipulate  for  the  pay- 
ment of  interest  before  the  principal  falls  due.  2 

There  being  no  stipulation  on  the  subject,  the  party  advanc- 
ing money  for  another  is  entitled  to  interest  at  the  rate  estab- 
lished at  the  place  where  the  advance  is  made.  3  For  the 
contract  to  refund,  implied  by  law,  is  to  pay  with  interest, 
according  to  the  rate  established  where  the  transaction  takes 
place,  and  a  written  engagement  to  pay  a  sum  certain,  with 

1  Cannon  v.  Beggs,  1  McCord,  370.  An  instrument  in  these  words:  "  Due 
Thomas  Newman,  Esq.,  on  demand,  three  hundred  and  ten  dollars.  1st  No- 
vember, 1810  ;"  draws  interest,  as  held  in  this  case,  only  from  the  time  of 
demand. 

Francis  v.  Castleman,  4  Bibb  R.,  282.  A  note  in  these  words:  "  I 
acknowledge  myself  justly  indebted  to  Lewis  Castleman  the  sum  of  seventy 
pounds,  for  value  received  of  him  this  llth  day  of  October,  1805,"  bears  inte- 
rest from  date;  for  this  case  is  unlike  that  of  a  note  payable  on  demand. 

Patrick  v.  Clay,  Id.  246.  On  a  note  payable  on  demand,  interest  does  not 
run  until  demand  made,-  but  a  suit  is  a  demand.  Bartlett  v.  Marshall,  2  Id., 
469. 

Satterwhite  v.  M'Kie,  Harper,  397.  The  defendant  made  a  note  of  hand, 
payable  at  twelve  months,  and  unless  paid  at  the  day,  to  bear  interest  from 
the  date ;  held,  that  defendant  having  failed  to  pay  at  the  day,  was  bound  for 
the  interest. 

Daggett  v.  Pratt,  15  Mass.  R.,  177.  Action  on  four  promissory  notes,  three 
of  them  payable  with  interest  at  three  per  cent,  if  paid  at  maturity,  if  not,  six 
per  cent,  interest  to  be  paid;  the  fourth  without  interest "  until  the  note  is  out, 
if  not  paid  then  lawful  interest  until  paid."  The  notes  not  having  been  paid 
when  they  became  due,  judgment  was  rendered  upon  them  all,  with  lawful 
interest  at  six  per  cent,  from  date  till  judgment. 

Homer  v.  Hunt,  1  Blackf.,  213.  A  note  was  payable  two  years  after  date, 
and  was  to  bear  interest  from  date  if  not  paid  within  two  weeks  after  a  legal 
demand;  and  it  was  held  that  the  interest  from  date  thus  stipulated  for,  was 
recoverable  in  ease  of  the  maker's  default.  Gully  v.  Remy,  Id.,  69. 

Schmidt  v.  Limehouse,  2  Bailey,  (South  Car.)  R.,  276;  held  that  a  due  bill 
payable  on  demand,  draws  interest  from  demand  made,  and  not  before. 

Bradford  v.  Cooper,  1  Louis.  Ann.  R.,  325.  When  the  holder  of  a  note 
omits  to  present  it  for  payment  at  maturity,  and  there  is  no  stipulation  in  it 
for  the  payment  of  interest,  he  can  recover  interest  only  from  the  time  when 
the  debtor  was  put  in  default. 

'  Catlin  v.  Lyman,  16  Vermont  R.,  44;  Bannister  v.  Roberts,  35  Maine,  75; 
7  Barb.  R.,  560. 

*  Wiathrop  v.  Carleton,  12Ma«s.  R.,  4. 

43 


714  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

interest,  is  to  be  construed  to  mean  such  interest  as  the  law 
allows  in  the  state  where  the  contract  is  made,  without  any 
respect  to  the  place  where  the  formal  act  of  signing  the  instru- 
ment is  performed,  i  For  instance,  a  note  signed  and  indorsed 
in  Detroit,  for  the  accommodation  of  the  maker,  and  by  him 
sent  to  his  agent  in  New- York,  and  there  delivered  in  pay- 
ment of  a  debt  due  from  the  maker,  is  legally  made  in  the 
state  of  New- York,  and  the  contract  of  the  indorser  is  to  be 
governed  by  the  laws  of  this  state.  2  The  instrument  takes 
effect  according  to  the  law  of  the  place  where  it  is  delivered 
and  accepted  as  evidence  of  an  existing  debt.  3 

When  a  note  is  made  .payable  at  large,  with  interest,  the 
rule  is  that  the  payee  or  holder  is  entitled  to  recover  interest 
upon  it  at  the  rate  established  in  the  state  where  it  is  made;  4 
but  the  rule  does  not  apply  where  it  is  expressly  made  pay- 
able in  another  state,  for  in  this  case  the  parties  are  supposed 
•to  have  had  reference  to  the  law  of  the  place  where  the  pay- 
ment was  to  be  made.  5  So  that  a  note  payable  with  interest, 
and  specifying  no  place  of  payment,  carries  interest  according 
to  the  law  of  the  state  or  country  where  it  is  made;  while  a 
note  drawn  payable  with  interest  in  a  particular  state,  bears 
the  rate  of  interest  established  by  law  at  the  place  of  pay- 
ment. 6 

1  Davis  v.  Coleman,  7  Iredell  (North  Car.)  R.,  424.     The  note  in  this  case 
was  made,  formally,  in  North  Carolina,  and  delivered  for  a  loan  of  money  in 
Georgia;  and  the  plaintiff  was  allowed  to  recover  Georgia  interest,  the  con- 
tract being  considered  as  made  where  the  note  was  delivered  as  evidence  of  a 
subsisting  debt. 

2  Cook  v.  Litchfield,  5  Sand.  R.,  330. 

8  Hyde  v.  Goodnow,  3  Comst.  R.,  266. 

4  Sweet  v.  Dodge,  4  Smedes  and  Marsh.  (Miss.,)  Rep.,  667. 

*  Scofield  v.  Day,  20  John.  R.,  102. 

6  Smith  v.  Smith,  2  John.  R.,  235;  Hosford  v.  Nichols,  1  Paige  Ch.  R.,  220; 
see  Archer  v.  Dunn,  2  Watts  and  Serg.,  327. 

INTEREST-  The  laws  regulating  the  rate  of  interest  to  be  allowed  for  the 
loan  or  forbearance  of  money,  are  very  different  in  the  different  states;  and  it 
is  deemed  advisable  to  state  here  briefly  the  rate  allowed,  and  the  consequences 
that  are  visited  upon  usurious  contracts  in  each  state. 

New-York.  The  rate  of  interest  is  seven  per  cent ;  usurious  contracts  and 
securities  are  void ;  the  excess  over  legal  interest  may  be  recovered  back ;  and 
the  taking  of  usurious  interest  is  declared  a  misdemeanor,  punishable  by  fine 
or  imprisonment.  2  R.  S.,  56-58,  3d  ed. 


DAMAGES    OR    SUM    RECOVERABLE.  715 

The  law  proceeds  upon  the  principle,  that  the  parties  know- 
ing the  rate  of  interest  at  the  place  of  performance,  stipulate 
for  its  payment,  as  effectually  as  if  the  note  had  been  made 
expressly  payable  with  interest  according  to  the  law  of  the 
place  of  payment.  On  this  ground,  notes  made  in  New- York, 
and  given  for  the  purchase  of  a  farm  situated  in  Vermont 
where  the  payee  resided,  were  held  to  bear  interest  at  th?  rate 
of  six  per  cent,  that  being  the  rate  of  interest  in  the  latter 
state;  the  presumption,  arising  from  the  circumstances,  being 
that  the  parties  contemplated  payment  in  Vermont,  i  But 

1  Austin  v.  Imus,  23  Vermont  R.,  286.  In  Stewart  v.  Ellice,  2  Paige  Ch. 
R.,  604,  the  debtor  resided  in  England  The  Chancellor:  "  On  general  princi- 
ples, in  the  absence  of  any  agreement  on  the  subject,  the  money  is  payable 
where  the  creditor  resides,  and  the  interest  is  to  be  computed  at  the  rate  allow- 
ed by  the  law  of  the  country  where  the  contract  was  made,  or  is  to  be  per- 
formed." 


Vermont .  Six  per  cent  is  the  established  rate  of  interest,  and  the  party 
paying  more  may  recover  back  the  excess  above  legal  interest.  Compiled 
Statutes  of  1850,  p.  442. 

New  Hampshire.  Six  per  cent  is  the  legal  rate  of  interest ;  and  nothing  is 
permitted  beyond  that  under  penalty  of  a  forfeiture  of  three  times  the  amount 
so  received.  Compiled  Statutes  of  1853,  p.  490. 

Massachusetts.  The  rate  of  interest  is  six  per  cent ;  but  usury  does  not 
avoid  the  contract,  though  it  subjects  the  party  to  a  forfeiture  of  three  times 
the  interest  and  costs.  R.  S.,  307. 

Connecticut.  Interest  allowed  at  the  rate  of  six  per  cent.  And  as  the 
.law  now  stands,  the  party  stipulating  for  more  cannot  recover  any  interest  at 
all,  but  may  recover  his  principal.  Compilation  of  1854,  p.  867. 

Rhode  Island.  Rate  allowed  is  six  per  cent,  and  interest  is  recoverable  on 
usurious  contracts  at  the  lawful  rate.  Public  Laws,  Revised  in  1844,  p.  286. 

Maine.  Legal  interest  is  six  per  cent;  more  than  that  cannot  be  recovered, 
though  stipulated  for  j  and  if  paid,  the  excess  may  be  recovered  back.  And 
the  innocent  indorsee  of  negotiable  paper  may  recover  thereon,  though  usurious 
in  its  inception.  R.  S.,  317. 

New  Jersey.  No  person  can  take  above  the  rate  of  six  per  cent,  contracts 
for  more  are  void,  and  the  principal  is  forfeited,  one  moiety  to  the  state  and 
the  other  to  the  prosecutor.  The  debtor  must  pay  the  principal  sum  lent  or 
forborne;  and  the  borrower  may  file  a  bill  against  the  lender  and  compel  him 
to  accept  his  principal  without  interest,  at  any  time  before  the  action  for  the 
forfeiture  is  brought ;  and  in  that  case  the  creditor  is  freed  from  the  penalty. 
Elmer's  Digest,  372,  published  in  1855. 

Delaware.  The  legal  rate  of  interest  is  six  per  cent ;  for  taking  more  the 
lender  or  owner  of  the  money  shall  forfeit  a  sum  equal  to  the  money  lent,  to 


716  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

the  residence  of  the  payee  in  another  state  or  country  is  not 
of  itself  sufficient  to  bring  the  contract  under  the  law  of  his 
domicil.  i 

The  doctrine  on  the  subject  is  laid  down  by  Chancellor 
Kent  in  these  words  :  "  The  law  of  the  place  where  the  con- 
tract is  made,  is  to  determine  the  rate  of  interest,  where  the 
contract  specifically  gives  interest;  and  this  will  be  the  case, 
though  the  loan  be  secured  by  a  mortgage  on  lands  in  another 
state,  unless  there  be  circumstances  to  shew,  that  the  parties 
had  in  view  the  law  of  the  latter  place  in  respect  to  interest. 

1  Chapman  v.  Robertson,  6  Paige  R.,  627. 


any  person  suing  for  the  same,  one-half  to  his  use  and  the  other  to  the  use  of 
the  state.  Revised  Statutes  of  1852,  p.  183. 

Pennsylvania.  No  person  can  take  more  than  six  per  cent;  if  he  does,  he 
forfeits  the  money  or  things  lent,  one-half  to  the  government,  and  the  other 
half  to  the  prosecutor.  But  the  contract  is  valid.  Laws  of  Penn.,  Dunlop's 
ed.  76;  12  Serg.  and  R.,  46;  4  Wheat.,  225. 

Ohio.  The  rate  of  interest  is  fixed  at  six  per  cent;  but  private  individuals 
(not  banks,)  may  contract  for  ten  per  cent,  and  recover  at  that  rate  till  judg- 
ment is  entered.  Curwen's  Laws  of  Ohio,  141,  921.  The  act  allowing  parties 
to  contract  for  ten  per  cent  was  passed  in  1850;  usurious  contracts  are  void 
only  for  the  excess  above  six  per  cent. 

Michigan.  Seven  per  cent  is  the  established  rate;  but  the  parties  may 
agree  for  any  rate,  not  exceeding  ten  per  cent.  The  security  by  which  usurious 
interest  is  reserved  or  stipulated  for,  is  not  void ;  but  may  be  made  the  foun- 
dation of  an  action  for  the  principal  and  legal  interest.  The  bona  fide  holder 
of  negotiable  paper  is  entitled  to  recover  the  face  of  the  same,  though  usurious 
in  its  inception.  R.  S.,  160. 

Wisconsin.  Any  rate  of  interest  agreed  upon  by  the  parties  in  writing,  not 
exceeding  ten  per  cent,  is  valid;  and  when  there  is  no  agreement  on  the  subject 
seven  per  cent  is  the  legal  rate.  Revised  Statutes  of  1849,  p.  264;  Session 
Laws  of  1851 ;  usurious  contracts  are  void.  The  law  of  the  Territory  of  Min- 
nesota fixes  the  rate  at  seven  per  cent,  and  allows  parties  to  stipulate  for  any 
amount.  Statutes  of  1851,  p.  155. 

Iowa.  Six  per  cent,  is  the  established  rate,  but  the  parties  may  contract  for 
any  rate  not  exceeding  ten  per  cent.  The  party  taking  usury  forfeits  ten  per 
cent,  on  the  sum  loaned  or  forborne,  to  the  county  school  fund,  and  may 
recover  his  principal  without  interest  or  costs.  Session  Laws  of  1852-53, 
Greene  R.,  66. 

Missouri.  When  no  rate  of  interest  is  agreed  upon,  six  per  cent,  is  allowed 
as  legal  interest;  and  the  parties  may  agree  in  writing  for  ten  per  cent.  But 
there  is  no  forfeiture  for  taking  or  stipulating  for  illegal  interest.  R.  S.  of 
1845,  p.  614,  615. 


DAMAGES   OR   SUM   RECOVERABLE,  717 

When  that  is  the  case,  the  rate  of  interest  of  the  place  of 
payment  is  to  govern."  i 

It  has  been  held  that  a  promissory  note  made  in  Louisiana, 
bearing  an  interest  of  ten  per  cent,  allowed  by  the  laws  of 
that  state,  and  payable  in  New- York,  where  the  rate  of  legal 
interest  is  only  seven  per  cent,  is  not  usurious;  the  parties 
having  a  right  to  stipulate  for  interest  according  to  the  law  of 
either  state.  2  And  though  the  authority  of  that  ruling  has 

1  2JKent's  Comm.,  Lect.  39,  page  460,  8d  ed;  Story  on  Conflict  of  Laws, 
§  305,  adopts  the  rule  as  here  laid  down,  and  criticises  the  decision  of  Chap* 
man  v.  Robertson,  supra. 

*  DePeau  v.  Humphreys,  20  Martin  R.,  1;  2 Met.,  381;  6  Paige,  627. 


Arkantat.  Interest  is  allowed  by  law  at  six  per  cent;  parties  may  agree  for 
ten  or  less;  and  usurious  contracts  are  void,  except  bills  of  exchange  and  nego- 
tiable notes  in  the  hands  of  bona  fide  holders.  English's  Digest  of  1848,  p. 
614,  615. 

Maryland.  No  higher  rate  of  interest  than  six  per  cent,  to  be  taken  for 
the  loan  or  forbearance  of  moneys,  wares  or  merchandise;  and  no  higher  rate 
than  eight  per  cent,  for  the  loan  of  any  tobacco  or  other  commodities.  Usu- 
rious contracts  are  void;  and  persons  stipulating  for  more,  forfeit  treble  the 
money  or  goods  so  lent  or  forborne;  one-half  of  the  fine  to  the  government, 
the  other  half  to  the  prosecutor.  1  Dorsey's  Laws  of  Md.,  6.  Such  was  the 
former  law.  The  rate  now  established  is  six  per  cent,  in  all  cases.  See  new 
Constitution. 

Virginia.  Legal  interest  is  six  per  cent;  and  usurious  contracts  are  void 
Persons  taking  usury  forfeit  double  the  money  or  property  loaned  or  forborne, 
one-half  to  the  informer;  and  the  borrower  may  file  a  bill  in  equity,  and 
compel  the  lender  to  discover  on  oath  the  terms  of  the  loan ;  and  if  usurious, 
the  lender  recovers  his  principal  without  interest.  Code  of  1849,  p.  575-577. 

North  Carolina.  No  more  than  six  percent,  to  be  taken  for  interest.  Per- 
sons taking  more  forfeit  double  the  money  lent  or  forborne,  one-half  to  the 
state,  and  the  other  half  to  the  prosecutor;  and  all  usurious  contracts  are 
void.  Revised  Code  of  1854,  p.  697. 

South  Carolina.  The  rate  of  interest  is  seven  per  cent ;  contracts  for  more 
.are  void,  and  the  person  stipulating  for  usurious  interest  forfeits  treble  the 
money  or  property  loaned  or  forborne,  one-half  to  the  state  and  the  other  half 
to  the  informer.  4  Statutes  of  So.  Car.,  363,  &c. 

Georgia.  Lawful  interest  is  seven  per  cent.  Contracts  for  more  than  that 
are  void  and  of  no  effect,  "  except  so  far  as  to  authorize  the  recovery  of  the 
principal  due  thereon,  and  no  more."  Cobb's  New  Digest,  Laws  of  Georgia 
893, 394. 

Florida.  Interest  is  not  allowed  above  eight  per  cent.  If  taken  or  agreed 
for  at  a  higher  rate,  the  interest  is  forfeited.  Thompson's  Digest,  234,  235. 

Illinois.    Money  may  be  loaned  at  the  rate  agreed  upon,  not  exceeding  ten 


718  BILLS   OF  EXCHANGE  AND  PROMISSORY  NOTES. 

been  seriously  questioned,  i  and  the  general  principle,  in  rela- 
tion to  contracts  made  in  one  place  to  be  executed  in  another, 
requires  that  the  contract  be  valid  at  the  place  where  it  is 
made,  the  weight  of  authority  permits  the  parties  to  stipulate 
for  the  payment  of  interest  according  to  the  law  of  the  place 
of  the  contract,  or  according  to  the  law  of  the  place  of  per- 
formance, as  they  may  see  fit,  without  incuring  the  penalties 
of  usury.  2 

1  Story  on  Conflict,  &c.,  §  298,  305. 

a  Andrews  v.  Pond,  13  Peters  R.,  65;  Jacksv.  "Nichols,  3  Sand.  Ch.  R.,313; 
S.  C.,  5  Barb.  R.,  38;  S.  C.,  1  Selden  R.,  178.  Messrs.  Jacks,  makers  of 
watches  and  jewelry  in  New-York,  in  May.  1840,  applied  to  Nichols,  who  was 
a  resident  of  Savannah,  Georgia,  for  a  loan  of  money ;  they  said  to  him:  "  We 
propose  to  pay  Mr.  D.  B.  Nichols  for  the  use  of  the  money  he  may  loan  us,  as 
follows:  interest  7  per  cent  per  annum,  5  per  cent  of  the  exchange  from  Savan- 
nah, and  2-J  per  cent  on  all  sales  of  watch  movements  made  by  us."  The 
money  being  advanced,  notes  and  securities  were  given  for  the  amount  in  New- 
York,  and  were  renewed  at  the  end  of  the  year;  in  June,  1842,  the  defendant, 
who  was  then  staying  at  Bridgeport,  in  the  State  of  Connecticut,  was  applied 
to  for  a  further  renewal,  which  was  finally  granted,  and  new  securities  deliver- 
ed and  received  in  the  State  of  Connecticut.  On  a  bill  filed  by  the  Messrs. 
Jacks,  the  notes  were  declared  void  by  the  assistant  vice-Chancellor  of  the  first 
circuit ;  the  decree  was  afterwards  reversed  by  the  Supreme  court,  on  the 
ground  that  the  securities  executed  in  Connecticut  were  valid  by  the  Laws  of 
that  State;  but  on  appeal  to  the  court  of  Appeals,  where  the  cause  was  finally 
passed  upon  in  July,  1851,  the  decree  of  the  vice-Chancellor  was  affirmed,  on 
the  ground  that  the  last  renewal  was  in  substance  and  in  effect  a  New- York 
transaction,  as  appeared  from  all  the  circumstances  of  the  case. 


per  cent;  on  other  debts  and  contracts  the  legal  rate  stands  at  eight  per  cent; 
and  the  party  stipulating  for  usurious  interest  forfeits  all  interest.  R.  S.  of 
1845,  p.  294,  and  Session  Laws  of  1849,  p.  98,  and  Session  Laws  of  1857. 

Indiana.  Six  per  cent,  is  the  legal  rate,  and  taking  or  agreeing  for  more  is 
unlawful.  But  contracts  for  more  are  not  void;  the  plaintiff"  may  recover  the 
principal  sum  due,  and  the  defendant  may  recover  costs.  1  R.  S.  of  1852,  p. 
343,  344. 

Kentucky.  Six  per  cent,  is  legal  interest.  Contracts  for  more  than  that  are 
void  for  the  excess,  but  the^creditor  may  recover  principal  and  lawful  interest 
thereon.  R.  S.,  419. 

Tennessee.  Six  per  cent,  is  the  legal  rate.  Contracts  for  more  are  not  void, 
and  the  party  stipulating  for  it  may  recover  lawful  interest  and  principal. 
Statutes  of  Tennessee,  by  Caruthers  and  Nicholson,  406. 

Alabama.  The  rate  of  interest  is  eight  per  cent.  Code,  §  1519.  But  con- 
tracts for  more  than  that  are  void  only  as  to  the  interest;  the  principal  may  be 
recovered.  Code  of  Alabama,  §  1523. 


DAMAGES   OR    SUM    RECOVERABLE.  719 

When  the  maker  of  a  note  expressly  promises  to  pay 
interest  on  the  sum  payable,  the  interest  is  as  much  a  part  of 
the  debt  as  the  principal  itself,  i  And  if  at  the  date  of  a 
note  the  rate  of  interest  stands  fixed  at  five  per  cent,  but  is 
changed  to  six  before  it  becomes  due,  it  has  been  held  that 
the  note  carries  interest  at  the  rate  established  when  it  was 
made.  2 

Where  interest  is  not  recoverable  on  a  contract  by  virtue 
of  any  express  stipulation  contained  in  the  instrument,  but  is 
allowed  by  way  of  damages  for  delay  in  making  payment,  the 
law  of  the  place  of  performance  silently  furnishes  the  rule  of 
compensation.  3  Ordinarily,  the  rate  of  interest  established 
at  the  place  of  payment  indicates  most  accurately  the  measure 
of  damages  arising  from  the  default.  4  Thus,  a  note  given  in 

1  Fake  v.  Eddy,  15  Wend.,  76. 

*  Lee  v.  Davis,  1  A.  K.  Marshall,  397. 

1  Story  on  Conflict  of  Laws,  §  296. 

4  Healy  v.  Gorman,  3  Green  (N.  J.,)  R.,  328.  This  was  an  action  on  a  pro- 
missory note  made  in  New-York,  payable  in  New  Jersey,  without  interest. 
"  The  contract  did  not  carry  interest  upon  the  face  of  it,  but  upon  default  of 
payment  at  the  day  and  place,  the  law  of  this  state,  New  Jersey,  tacitly 
annexes  an  obligation  thenceforth  to  pay  interest  until  the  debt  is  liquidated. 
But  the  obligation  to  pay  interest  was  no  part  of  the  contract}  for  if  the  con- 
tract had  been  performed,  no  interest  could  have  been  demanded.  It  did  not 
contemplate  a  failure  in  the  performance,  and  therefore  made  no  provisions  in 


Mississippi.  Interest  is  allowed  in  this  State  at  the  rate  of  eight  per  cent. ; 
in  cases  of  usury,  the  party  stipulating  for  it  recovers  only  his  principal  and 
lawful  interest.  Parties  may  agree  in  writing  for  ten  per  cent,  or  under. 
Hutchinson's  Mississippi  Code,  641;  Session  Laws  of  1854,  p.  110. 

Louisiana.  Conventional  interest  allowed  as  high  as  eight  per  cent.;  the 
party  stipulating  for  more  recovers  no  interest  at  all.  When  paid,  the  excess 
may  be  recovered  back  within  a  year.  Where  there  is  no  stipulation,  five  per 
cent,  is  the  legal  interest.  Revised  Statutes  of  1856,  p.  80. 

Texas.  The  legal  rate  of  interest  is  eight  per  cent. ;  but  parties  may  agree 
for  any  rate  not  exceeding  twelve:  Contracts  for  more  than  that  are  void  so 
far  that  the  creditor  cannot  recover  any  interest.  HarlAey's  Digest  of  the  Laws 
of  Texas,  496,  497. 

California.  Where  there  is  no  express  contract  for  interest,  interest  is 
allowed  at  the  rate  often  per  cent;  but  the  parties  may  agree  for  any  rate  of 
interest,  or  that  it  be  compounded  and  made  a  part  of  the  principal  at  stated 
periods.  Compiled  Laws  of  California,  109. 


720  BILLS   OF  EXCHANGE  AND    PROMISSORY  NOTES. 

Guadeloupe,  payable  in  sugar  at  a  valuation,  and  a  note  given 
in  Canton,  payable  eighteen  months  after  date,  neither  of  them 
containing  any  stipulation  in  regard  to  interest,  are  to  be 
governed,  and  are  to  bear  interest  or  not,  according  to  the  law 
of  the  country  where  they  are  made}  while  a  note  drawn  in 
New- York,  payable  in  New  Jersey,  or  drawn  in  Kentucky, 
payable  in  Louisiana,  is  to  be  governed  by  the  law  of  the 
place  of  performance,  i  But  where  the  action  on  the  note 

1  Comtors  v.  Carpenter,  1  Wash.  C.  C.  R.,  376-.  The  note  in  this  case  was 
given  in  Guadaloupe,  payable  in  sugar  at  a  valuation  j  and  it  was  proved  that 
by  the  law  of  that  place  no  interest  is  payable  upon  such  notes  till  judgment, 
and  none  was  allowed  here. 

Cowqua  v.  Landerburn,  id,  521.  This  action  was  brought  on  a  promissory 
note,  given  in  Canton,  payable  eighteen  months  after  date,  without  stipulating 
anything  about  interest.  And  on  proof  that  one  per  cent,  a  month  was  cus- 
tomary interest  at  Canton,  it  was  allowed  at  that  rate. 

Jaffrey  v.  Dennis,  2  Wash.  C.  C.  R.,  253.  On  a  contract  made  in  Georgia, 
the  plaintiff  is  entitled  to  recover  in  any  other  state  the  interest  allowed  by 
law  in  Georgia  j  but  the  law  of  that  state  must  be  proved,  otherwise  it  will  be 
given  according  to  the  lexfori. 

Bushly  v.  Camac,  4  id.,  296.  The  defendant  was  indebted  to  the  plaintiff  in 
a  certain  sum  of  British  sterling,  and  gave  his  bond  for  the  amount  in  Stirling 
generally,  payable  in  Ireland ;  and  it  was  held  that  the  bond  drew  Irish  interest, 
and  was  payable  in  British  sterling. 

Winthrop  v.  Carleton,  12  Mass.  R.,  4.  A  party  advancing  money  for 
another  is  entitled  to  interest  at  the  rate  established  at  the  place  where  the 
advance  is  made. 

Gordon  v.  Phelps,  7  J.  J.  Marshall,  619.  On  a  note  executed  and  payable 
in  New  Orleans3  with  eight  per  cent,  interest  after  maturity,  plaintiff  may 
recover  at  that  rate  without  shewing  what  is  the  rate  of  interest  in  New 
Orleans  j  but  it  cannot  carry  that  rate  of  interest  after  judgment. 


anticipation  of  such  an  event ;  but  left  the  law  to  take  its  course  in  case  of  a 
breach  of  the  contract." 

Buzzell  v.  Snell,  5  Foster,  N.  H.,  474.  It  is  usual  and  proper  to  instruct 
the  jury  to  allow  interest,  though  none  is  stipulated  for  in  the  contract,  from 
the  time  of  default. 

Livermore  v.  Rand.  6  id.  85.  Interest  should  be  allowed  in  such  cases  by 
way  of  damages  for  the  detention, 

Abbott  v.  Wilmot,  22  Vermont  R.,  437.  "Where  there  is  no  express  con- 
tract for  the  payment  of  interest,  it  is  only  recoverable  as  damages  for  the 
detention  of  the  money  from  the  time  it  ought  to  have  been  paid.  Pecks  and 
al.  v.  Mayo  and  al  ,  14  Vt.  R.,  33.  Where  a  promissory  note  is  made  in 
Canada,  and  indorsed  in  Vermont,  in  both  of  which  places  the  rate  of  interest 
is  six  per  cent.,  and  payable  in  the  State  of  New-York,  where  the  rate  of 


DAMAGES   Off  SUM    RECOVERABLE,  721 

is  brought  in  another  jurisdiction,  it  is  incumbent  npon 
the  plaintiff  to  prove,  as  he  would  any  other  fact,  the  law 
of  the  state  where  the  instrument  was  made,  or  was  to  be 
performed :  failing  to  do  this,  damages  are  to  be  allowed  only 
according  to  the  law  of  the  former,  or  place  where  the  action 
is  brought,  i  The  rule  here  is  based  on  the  familiar  principle 
that  the  courts  of  one  state  or  country  do  not  take  judicial 
notice  of  the  laws  of  another  state  or  country;  on  which 
ground  it  has  been  held  that  the  plaintiff  may  recover,  on  a 
note  executed  and  payable  in  New  Orleans,  with  eight  per 
cent  after  maturity,  at  the  rate  agreed  upon,  without  proving 
the  laws  of  Louisiana  on  the  subject.  2 

1  Wood  and  others  v.  Corl,  4  Met.,  203.  The  note  in  suit  was  made  at  Buf- 
falo, payable  in  Cleveland,  Ohio;  and  an  action  being  brought  upon  it  in  Mas- 
sachusetts, the  court  directed  the  jury,  in  the  absence  of  any  proof  as  to  the 
rate  of  interest  in  Ohio,  to  compute  it  at  six  per  cent  per  annum,  by  way  of 
damages  for  non-payment  of  the  notej  that  being  the  legal  rate  of  interest  in 
the  state  of  Massachusetts.  Jaffrey  v.  Dennis,  supra. 

Sweet  v.  Dodge,  4  Smedes  and  Marsh.,  (Miss.,)  667.  A  note  made  in 
Georgetown,  D.  C.,  is  to  be  governed  by  the  laws  of  Maryland,  and  if  payable 
with  interest,  the  plaintiff  must  prove  what  the  law  of  that  state  is.  The 
courts  cannot  take  judicial  notice  of  the  laws  of  another  state. 

In  Hill  v.  George,  5  Texas,  87,  and  in  Wheeler  v.  Pope,  id.  262,  it  was  held 
necessary  in  an  action  on  a  promissory  note  payable  beyond  the  jurisdiction  of 
the  state,  to  allege  and  prove  the  rate  of  interest  at  the  place  of  payment,  in 
order  to  recover  it. 

*  Gordon  v.  Phelps,  supra.  The  following  authorities  shew  that  the  lex  loci 
is  to  govern  the  rate  of  interest  or  damages  :  1  Dall.,  191 ;  Slocum  v.  Pomeroy, 
6  Cranch,  221;  Winthrop  v.  Pepoon,  1  Bay  R.,  468;  Lanusse  v.  Barker,  3 
Wheat.  R.,  101,  146;  Kissam  v.  Burrall,  Kirby  Rep.,  326;  Winthrop  v. 
Carleton,  12  Mass.,  4;  Gaillard  ads.  Ball,  1  Nott  and  McCord  R.,  76. 


interest  is  seven  per  cent.,  the  makers  and  indorsers  are  held  liable  to  pay  at 
the  rate  of  seven  per  cent,  damages  for  delay  in  making  payment  after  the 
same  should  have  been  paid. 

Contra,  Gibbs  v.  Fremont,  20  Eng.  Law  and  Eq.  R.,  565.  This  was  an 
action  by  the  indorsees  of  several  bills  of  exchange  drawn  by  the  defendant  in 
Upper  California  on  the  Hon.  James  Buchanan,  Secretary  of  the  United 
States,  Washington.  The  bills  were  made  payable  to  the  order  of  F.  Hutt- 
man,  and  discounted  by  him  at  the  place  where  they  were  drawn,  and  dis- 
honored in  Washington,  the  place  on  which  they  were  drawn ;  and  the  question 
was  whether  the  plaintiff  was  entitled  to  recover  against  the  defendant  six  per 
cent.,  the  rate  of  interest  in  Washington,  or  twenty-five  per  cent.,  the  rate  of 


72S  BILLS  OF  EXCHANGE   AND    PROMISSORY  NOTES. 

It  is  not  always  easy  to  determine  by  what  law  the  contract 
is  to  be  governed,  though  the  general  principles  on  the  subject 
are  perfectly  well  settled.  A  Chinese  merchant  residing  at 
Canton,  delivers  goods  at  that  place  to  an  agent  of  a  commis- 
sion house  in  New- York,  to  be  brought  to  this  country  and 
sold  for  the  benefit  and  account  of  the  owner,  the  net  pro- 
ceeds to  be  remitted  to  him  at  Canton;  and  in  an  action 
brought  against  the  commission  merchants  in  this  state,  the 
question  arises  whether  interest  by  way  of  damages  for  the 
detention  or  non-remittance  of  the  proceeds  is  to  be  allowed 
according  to  the  law  of  China,  or  according  to  the  law  of  this 
state  7  Chancellor  Kent  pronounces  in  favor  of  the  rate 
established  at  Can  ton  j  i  but  the  court  of  last  resort,  agreeing 
with  the  Chancellor  perfectly  in  regard  to  the  general  princi- 
ples of  law  involved  in  the  case,  pronounce  in  favor  of  the 
rate  established  here;  2  the  Chancellor,  proceeding  upon  the 
ground  that  the  contract  was  made  and  to  be  governed  by  the 
law  established  at  Canton,  and  the.  Court  of  Errors  proceed- 
ing upon  the  ground  that  the  contract  made  in  China,  was 
to  be  performed  in  the  state  of  New- York,  and  therefore  to  be 
governed  by  the  existing  law  of  this  state.  The  only  differ- 
ence between  the  two  decisions  regards  the  application  of  the 
law  to  the  facts  presented. 

It  is  scarcely  necessary  to  say  that  the  same  rule  applies  to 
checks,  bills  of  exchange,  and  promissory  notes;  to  all  con- 
tracts for  the  payment  of  money.  3 

In  an  action  on  a  foreign  contract,  such  as  a  note  payable 
in  another  state,  or  a  bill  drawn  on  another  country,  the 
foreign  interest  is  to  be  calculated  on  it  until  the  day  of  the 

1  Fanning  and  others  v.  Consequa,  3  John.  Ch.  R.,  587-612. 

a  Idem,  17  John.  R.,  611. 

8  Robinson  v.  Bland,  2  Burr.  ,1077.  A  bill  of  exchange  drawn  in  France,  for 
money  lent  there,  payable  in  England,  bears  English  interest;  and  the  same 
rule  is  followed  here.  Thompson  v.  Ketchum,  4  John.  R.,  285;  2  John.  R., 
235;  3  id.  263;  3  Ball.,  369;  2  John.  Gas.,  365. 


interest  in  California,  and  the  Court  of  Exchequer  in  England  gave  the  plaintiff 
the  rate  of  interest  in  California,  "there  being  nothing  said  in  the  bills  on  the 
subject.  Decision  in  1853. 


DAMAGES   OR   SUM    RECOVERABLE.  723 

recovery :  i  after  that  it  bears  interest  under  the  law  of  the 
former  or  state  where  the  judgment  is  entered.  2 

On  a  note  payable  in  specific  articles,  at  a  stipulated  price, 
the  measure  of  damages  in  this  state  for  non-payment  is  the 
sum  specified  in  the  note,  and  not  the  actual  value  of  the 
articles  on  the  day  stipulated  for  payment.  3  But  the  deci- 
sions on  this  point  are  not  uniform  in  the  different  states;  some 
of  them  holding  that  the  actual  value  of  the  articles,  and  not 
the  stipulated  price,  is  the  true  measure  of  damages.  4  Where 
the  decisions  correspond  with  the  law  as  settled  in  our  courts, 
they  are  placed  upon  the  ground  that  the  parties  to  the  con- 
tract, by  specifying  the  sum  to  be  paid,  have  themselves 
agreed  upon  the  measure  of  damages.  On  the  other  hand, 
the  decisions  which  allow  the  current  market  value  of  the 
goods  on  the  day  stipulated  for  their  delivery,  as  the  mea- 
sure of  damages,  proceed  upon  the  theory  that  the  payee 
has  agreed  for  the  goods,  and  is  entitled  to  demand  them  at 
all  events;  and  that  therefore  he  ought  in  equity  to  recover 
their  value,  especially  where  their  value  has  been  in  the 
meantime  enhanced.  Of  course  the  rule  ought  to  work  both 
ways;  if  the  payee  is  permitted  to  recover  the  appreciated 
price  when  the  goods  have  advanced  in  value,  he  should  be 
restricted  to  their  actual  value  when  they  have  depreciated. 
As  construed  here,  the  instrument  is  wrhat  it  purports  to  be,  a 
promissory  note  given  for  a  sum  certain,  allowing  to  the 
maker  the  privilege  of  paying  it  in  property  of  a  certain 
valuation.  As  construed  in  some  of  the  other  states,  it 
becomes  a  speculative  purchase  of  property;  the  payee  taking 

1  Boyce  v.  Edwards,  4  Peters  R.,  Ill;  Peacock  v.  Banks,!  Minor,  387; 
Cooper  v.  Sandford,  4  Yerger.  452. 

a  Verree  et  al.  v.  Hughes,  6  Halsted,  91;  Burkhardt  v.  Seppington,  1  Green 
(Iowa)  R.,  66. 

8  Pinney  v.  Glcason,  5  "Wend.,  393.  The  note  was  in  these  words  :  "For 
value  received,  I  promise  to  pay  John  Pinney  seventy-nine  dollars  and  fifty 
cents  on  the  first  of  August,  1852,  in  salt,  at  fourteen  shillings  per  barrel,  in 
good  boating  order." 

4  McDonald  v.  Hodge,  5  Haywood's  Tenn.  R.,  86;  Edgar  v.  Bois,  11  Serg. 
and  Rawle,  445. 


724  BILLS   OF  EXCHANGE  AND   PROMISSORY  NOTES. 

the  chances  of  a  rise  or  fall  in  the  market  value  of  the 
article,  i 

Assuming  that  a  note  payable  in  specific  articles  is  given  as 
evidence  of  a  debt  due,  or  on  a  purchase  of  property,  and  the 
fair  construction  of  it  is  that  the  payee  has  agreed  to  accept, 
and  the  maker  has  engaged  to  pay,  the  amount  named  in  the 
articles  mentioned  at  the  prices  specified,  or  in  money.  A 
covenant  for  the  payment  of  a  stipulated  rent,  in  grain  at 
certain  specified  prices  per  bushel,  is  hardly  a  parallel  case;  2 
and  if  it  were,  the  true  damages,  for  a  failure  to  deliver  the 
grain,  would  be  the  sum  of  money  payable,  with  interest 
thereon  from  the  time  when  the  payment  should  have  been 
made.  3  If  this  is  not  the  intent  of  the  covenant,  why  should 
the  rent  be  specified  in  money  1  And  so  in  respect  to  the 
note;  why  should  it  be  drawn  for  a  given  sum,  unless  it  be 
the  intention  of  the  parties  to  give  the  maker  his  choice  to 
pay  it  in  money.  Converting  the  note  into  a  purchase,  bind- 
ing both  the  maker  and  payee  to  give  and  receive  at  all 
events  so  many  bushels  of  wheat  or  barrels  of  salt,*[at  the 
price  specified,  and  the  instrument  would  naturally  be  written 
in  the  form  of  a  contract  for  the  sale  and  delivery  of  so  many 
barrels  of  salt  or  bushels  of  wheat,  without  taking  pains  to 
specify  the  prices.  4 

There  is  a  class  of  cases  in  which  the  rule  as  held  in  this 
and  several  of  the  states,  might,  if  applicable,  operate  unjustly 
towards  the  party  in  default;  as  where  a  note  is  made  payable 
in  greatly  depreciated  bank  bills,  being  given  for  twice  or 

1  The  law  on  ^the  subject  is  the  same  in  New-York,  Connecticut  and  Ver- 
mont. Pinney  v.  Gleason,  supra;  Brooks  v.  Hubbard,  3  Conn.  R.,  68;  Perry 
T.  Smith,  22  Vermont  R.,  801. 

8  Meason  v.  Phillips,  Addis.  Rep.,  846;  this  is  the  leading  case  in  Pennsyl- 
vania; that  of  Edgar  v.  Bois,  11  Serg.  and  R.,  445,  is  not  in  point. 

8  Smith  v.  Smith,  2  John.  R.,  243. 

4  Per  Chancellor  Walworth,  5  Wend.,  397;  Chip,  on  Con.,  35.  In  South 
Carolina,  a  note  "  to  deliver  to  the  plaintiff  or  order,  such  number  of  barrels 
of  new  rice  as  will  amount  to  the  sum  of  two  hundred  dollars,  value  received 
this  day,  at  one  dollar  per  cwt,"  was  held  a  contract  for  rice.  Price  v.  Ins- 
trobe,  Harper  R.,  Ill ;  but  a  promise  to  pay  a  sum  certain  in  rice,  is  not  the 
same  thing  as  an  undertaking  to  deliver  a  certain  quantity  of  rice ;  that  is  to 
eay,  it  does  not  Indicate  the  same  intention. 


DAMAGES    OR   gUM    RECOVERABLE.  725 

three  times  the  amount  of  the  debt  due,  i  But  this  class  of 
cases  does  not  stand  upon  the  same  footing  with  notes  given 
for  a  definite  sum,  payable  in  property  at  a  valuation.  For 
when  a  party  makes  a  note  payable  in  a  depreciated  currency, 
he  declares  in  substance  that  the  nominal  amount  is  not  the 
true  amount  due;  whereas,  a  note  given  for  fifty  or  one  hun- 
dred dollars,  payable  in  neat  cattle  or  in  wool  at  fixed  prices, 
shews  on  its  face  the  true  amount  of  the  indebtedness,  and  is 
supposed  to  have  been  given  in  that  form  for  the  accommoda- 
tion of  the  maker.  2 

When  a  debt  is  contracted  payable  in  a  particular  state  or 
country,  say  by  a  promissory  note  for  one  hundred  pounds 
sterling,  payable  in  London  on  a  day  named,  the  creditor  or 
payee  ought  to  recover,  wherever  he  may  bring  his  action,  a 
sum  equal  in  value  to  the  debt  due,  with  interest  as  damages 
for  the  non-payment;  and  it  has  been  held  that  he  is  entitled 

1  "Walker  v.  Meek,  12  Smedes  and  Marsh.,  (Miss.,)  495.  The  note  in  this 
case  was  given  for  "  Brandon  money,"  at  a  discount  of  some  eighty  per  cent. ; 
and  it  was  held  that  the  plaintiff  was  not  entitled  to  recover  the  nominal 
amount  of  the  note.  Hixon  v.  Hixon,  7  Humphreys  (Tennessee)  R  ,  33,  is  to 
the  same  effect. 

*  Leiber  v.  Goodrich,  5  Cowen.  186,  was  on  a  note  payable  in  Pennsylvania 
paper  currency,  and  Jones  v.  Fales,  4  Mass..  245,  was  on  a  note  payable  in 
foreign  bills,  and  though  the  question  of  damages  did  not  arise,  the  notes  were 
held  not  negotiable,  because  payable  in  something  different  from  money.  See 
also  7  John.  R.,  821;  10  id.  418;  19  id.  144;  23  Wend.,  71;  Thompson  v. 
Sloan  was  an  action  on  a  note  payable  in  Canada  money. 

Cockrell  v.  Warner,  14  Arkansas  R.,  345,  decided  in  1854.  Action  on  a 
property  note,  the  form  of  which  is  not  given.  By  the  court,  "  It  was  a  strict 
property  note,  payable  in  cotton  generally,  at  a  specified  time,  and  no  demand 
on  the  part  of  Warner  was  necessary  to  fix  the  liability  of  Cockrell.  By  its 
terms  the  latter  assumed  upon  himself  the  duty  of  discharging  it  in  cotton, 
and  a  failure  to  comply  entitled  the  former  to  recover  the  value  of  the  com- 
modity on  the  1st  of  January,  1847,  when  it  matured."  But  the  note,  did  not 
as  I  infer  from  the  report,  specify  the  price  at  which  the  cotton  wag  to  be  paid. 
Roberts  v.  Short,  1  Texas  R.,  373,  was  an  action  on  a  note  in  these  words  : 
'•  $125.00.  Six  months  after  date,  we,  or  either  of  us,  promise  to  pay  John. 
R.  Short,  one  hundred  and  twenty-five  dollars,  Texas  money,  at  its  current 
price  at  New  Orleans,  without  defalcation,  this  16th  August,  1839."  And  it 
was  held  that  parol  evidence  was  admissible  to  explain  the  import  of  the 
instrument ,  and  shew  what  was  the  value  of  Texas  money,  or  what  was  meant 
by  Texas  money.  The  rule  in  respect  to  notes  for  a  sum  certain  payable  in 
specific  articles  is  the  same  in  Iowa  as  in  New- York. 


726  BILLS  OF  EXCHANGE  AND    PROMISSORY  NOTES. 

*to  recover  the  full  sum  necessary  to  replace  the  money  in  the 
country  where  it  ought  to  have  been  paid,  with  interest  for  the 
delay,  i  If  the  action  is  brought  in  either  of  the  United 
States,  the  pound  sterling  must  be  converted  into  its  equiva- 
lent, four  dollars  and  forty-four  cents  of  our  money,  that  sum 
being  the  par  of  a  pound  sterling  as  established  by  law;  so 
that  the  recovery  on  the  face  of  the  note  would  be  four  hundred 
and  forty-four  dollars  and  forty-four  cents,  with  interest  added 
from  the  day  of  default.  2 

Assuming  that  the  payee  or  holder  of  the  note  is  entitled 
to  recover  the  full  sum  necessary  to  replace  the  money  in  the 
country  where  it  ought  to  have  been  paid,  and  there  should 
be  added  to  or  deducted  from  the  recovery,  a  sum  equal  to  the 
difference  between  the  par  and  the  existing  rate  of  exchange; 
adding  the  premium  necessary  to  be  paid  in  the  purchase  of 
a  bill  on  London,  where  such  bills  are  above  par,  and  deduct- 
ing the  difference  between  what  a  bill  for  the  amount  costs 
the  purchaser,  and  the  nominal  par  where  such  bills  are 
selling  in  the  market  at  a  discount,  or  below  the  legal  par. 
The  argument  in  favor  of  this  rule  is  clearly  stated  by  Mr. 
Justice  Story  in  an  opinion  delivered  by  him,  in  a  case  pre- 
senting the  question :  "  I  take  the  general  doctrine  to  be 
clear,  that  whenever  a  debt  is  made  payable  in  one  country, 
and  it  is  afterwards  sued  for  in  another  country,  the  creditor 
is  entitled  to  receive  the  full  sum  necessary  to  replace  the 
money  in  the  country  where  it  ought  to  have  been  paid,  with 
interest  for  the  delay;  for  then,  and  then  only,  is  .he  fully 
indemnified  for  the  violation  of  the  contract.  In  every  such 
case  the  plaintiif  is,  therefore,  entitled  to  have  the  debt  due 
to  him  first  ascertained  at  the  par  of  exchange  between  the 
two  countries,  and  then  to  have  the  rate  of  exchange  between 
those  countries  added  to  or  subtracted  from  the  amount,  as  the 
case  may  require,  in  order  to  replace  the  money  in  the  country 

1  Grant  v.  Healey,  3  Sumner  R.,  523  j  Smith  v.  Shaw,  2  Wash.  Cir.  R., 
167,  168;  Lee  v.  Wilcocks,  5  Serg.  and  Rawle,  48. 

*  Story  on  Promissory  Notes,  §  396-399.  The  par  for  the  purpose  of  esti- 
mating the  value  of  goods,  paying  an  ad  valorem  duty,  is  four  dollars  and 
eighty-four  cents  for  the  pound  sterling.  See  act  of  1842,  ch.  66. 


DAMAGES   OR    SUM    RECOVERABLE.  727 

where  it  ought  to  be  paid.     It  seems  to  me,  that  this  doctrine 
is  founded  on  the  true  principles  of  reciprocal  justice."  i 

The  courts  of  this  state  hold  a  different  rule.  An  action 
is  brought  by  a  firm  doing  business  in  Liverpool,  for  the  pur- 
chase money  of  goods  sold  there  to  a  merchant  doing  business 
in  New- York;  and  the  question  is  whether  the  plaintiffs,  suing 
here  for  the  recovery  of  a  debt  due  in  England,  are  entitled 
to  an  allowance  for  the  rate  of  exchange,  or  what  it  would 
cost  them  to  remit  the  money  to  Liverpool.  2  Per  Curiam : 
The  debt  is  to  be  paid  according  to  the  par,  and  not  the  rate 
of  exchange.  It  is  recoverable  and  payable  here  to  the  plain- 
tiffs or  their  agent;  and  the  courts  are  not  to  enquire  into  the 
disposition  of  the  debt,  after  it  reaches  the  hands  of  the 
agent.  He  may  remit  the  debt  to  his  principal  abroad,  in 
bills  of  exchange,  or  he  may  invest  it  here  on  his  behalf,  or 
transmit  it  to  some  other  part  of  the  United  States,  or  to  other 
countries,  on  the  same  account.  We  cannot  trace  the  disposi- 
tion which  is  to  take  place,  subsequent  to  the  recovery,  nor 
award  special  damages  upon  such  uncertain  calculations.  All 
the  plaintiffs  can  ask,  is  their  debt,  justly  liquidated  and  paid, 
in  the  lawful  currency  of  the  United  States."  3  The  same 
rule  has  been  adopted  in  Massachusetts,  and  is  placed  upon 
the  same  ground.  4 

1  Grant  v.  Bealey,  supra. 

*  Martin  and  others  v.  Franklin  and  others.  4  John.  R.,  124. 

1  Day  v.  Scofleld,  20  John.  R.,  102,  was  an  action  on  a  note  payable  in  Eng- 
land, and  it  was  held  that  plaintiffs  were  not  entitled  to  an  allowance  on 
account  of  the  difference  of  exchange. 

4  Adams  v.  Cordis,  8  Pick.  R.,  260. 

Grant  and  others  v.  Healey,  3  Sumner  R.,  523,  decided  in  1839.  The  suit 
was  brought  for  a  balance  of  account,  for  advances  made  at  Boston  upon  goods 
consigned  to  the  plaintiffs  from  Trieste,  for  sale;  and  it  was  decided  that  the 
advances  so  far  as  they  were  not  reimbursed  oat  of  the  sales,  were  payable, 
not  at  Trieste,  but  at  Boston,  the  place  where  they  were  made.  In  this  view 
of  the  matter,  I  remain  of  the  opinion,  says  the  court,  that  the  plaintiffs  are 
entitled  only  to  the  balance  due  at  the  par  of  exchange.  Contra,  Ballister  v. 
Hamilton,  3  Louis.  Ann.  R.,  401. 

N  •  "Weed  8c  Co.  v.  Asa  Miller,  1  McLean  R.,  423,  decided  in  1839.  The  note 
in  this  case  was  made  in  New-York,  payable  at  large,  and  the  suit  on  it  was 
brought  in  Indiana,  hut  the  declaration  contained  no  count  or  allegation  cover- 
ing the  rate  of  exchange,  which  was  two  per  cent;  and  it  was  held  the  plaintiff 
could  not  recover  the  exchange. 


728  B5LLS  OF   EXCHANGE  AND    PROMISSORY    NOTES. 

On  the  other  hand,  the  English  decisions  are  in  favor  of 
the  claim  of  a  foreign  creditor  to  be  paid  at  the  rate  of 
exchange,  i  Thus,  where  an  action  was  brought  in  England 
on  a  judgment  recovered  in  the  island  of  Jamaica,  the  plain- 
tiff was  allowed  to  recover  in  England  a  sum  equal  to  what 
he  might  have  placed  there  by  a  bill  of  exchange  bought  in 
Jamaica,  on  London,  with  a  sum  equal  to  the  recovery  in 
the  island;  in  other  words,  the  amount  recoverable  in  England, 
was  calculated  according  to  the  rate  of  exchange.  2  The 
declaration  in  the  case  set  forth  the  recovery  of  the  judgment 
in  Jamaica,  and  then  avered  the  value  of  the  amount  so 
recovered  in  lawful  money  of  Great  Britain,  and  the  interest 

1  England  is  a  great  producer,  and  the  balance  of  trade  is  generally  in  her 
favor;  and  perhaps  this  circumstance  has  induced  a  leaning  in  her  courts 
towards  a  rule  which  would  generally  work  an  favor  of  her  people. 

3  Scott  v.  Bevan,  2  Barn,  and  Adolph.,  78. 


Grutacap  v.  Woullaise,  2  McLean's  R.,  581.  "  This  action  was  brought  on 
a  promissory  note,  dated  New- York,  payable  at  the  Detroit  City  Bank,  for 
$1232,  with  the  current  rate  of  exchange,  in  the  city  of  New-York,  to  be 
added  thereto.  In  the  declaration  there  was  an  averment  of  the  current  rate 
of  exchange  when  the  note  became  due.  The  court  think  the  difference  in 
exchange,  between  Detroit  and  New-York,  may  be  recovered  on  this  note;  and 
unless  the  parties  shall  agree  on  the  amount,  the  question  will  be  refered  to  a 
jury. 

Howard  v.  Central  Bank,  3  Kelly  (Georgia,)  R.,  375,  decided  in  1847.  This 
case  decides  that  the  holder  of  a  negotiable  note  made  in  Georgia,  payable  in 
the  city  of  New-York,  is  entitled  to  charge  five  per  cent,  damages  against  the 
indorser,  under  the  act  of  1823,  on  the  return  of  the  note  protested.  "  Not- 
withstanding promissory  notes  are  not  mentioned  in  the  statute  of  1823,  yet 
we  are  of  the  opinion  that  when  negotiable  and  indorsed,  they  come  within  the 
reason  and  spirit  of  it,  and  that  the  defendant  in  error  was  entitled  to  charge 
five  per  cent,  damages,  which  was  included  in  the  note  on  settlement,  and  that 
the  same  was  not  usurious." 

Bank  of  Missouri  v.  Wright  et  al.,  10  Missouri  R.,  719,  decided  in  1847. 
The  action  was  on  a  note  made  at  Springfield,  payable  four  months  after  date 
with  seven  per  cent,  interest;  and  the  plaintiff,  the  payee  of  the  note,  claimed 
damages  at  four  per  cent.,  as  upon  an  inland  bill  of  exchange,  under  the 
statute  of  Missouri,  making  promissory  notes  of  this  character  to  have  the 
game  effect  and  be  negotiable  in  like  manner  as  bills  of  exchange;  in  respect 
to  which,  when  drawn  upon  any  person  within  the  state,  the  law  gave  four  per 
cent,  damages;  but  the  court  held  that  as  the  note  had  not  been  negotiated 
there  was  no  ground  for  the  claim  of  damages. 


DAMAGES   OR   SUM    RECOVERABLE.  729 

due  thereon :  on  the  trial  the  plaintiff  proved  the  judgment, 
and  that  £140  of  the  currency  of  Jamaica,  taking  the  rate  of 
exchange  at  par,  was  equivalent  in  value  to  £  100  sterling;  and 
the  defendant  proved  that  at  the  time  the  judgment  was  obtain- 
ed and  from  thence  until  the  present  action  was  commenced, 
bills  upon  England  were  sold  in  Jamaica  at  a  premium  of 
22£  per  cent;  £100  sterling,  at  that  rate,  being  worth  £171 
Jamaica  currency;  and,  the  question  was  how  the  value  of 
the  sum  recovered  should  be  estimated  ?  The  plaintiff  con- 
tended, it  should  be  as  £140  currency  to  £100  sterling,  with- 
out regard  to  the  rate  of  exchange;  the  defendant,  that  it 
should  be  estimated  according  to  the  exchange.  At  the 
circuit  Lord  Tenterden  ruled  that  in  point  of  law  £100  ster- 
ling was  to  be  considered  equivalent  only  to  £140  currency; 
but  on  a  review,  the  court  decided  in  favor  of  the  computa- 
tion insisted  upon  by  the  defendant,  so  as  to  give  the  plaintiff 
no  more  than  he  would  have  had  if  the  judgment  had  been 
paid  in  Jamaica  and  the  money  there  invested  in  bills  of 
exchange  payable  in  England.  The  authority  of  this  case, 
which  is  stated  at  length  as  an  illustration  of  the  manner  in 
which  one  currency  is  converted  into  another,  can  be  defended 
only  on  the  ground  that  all  moneys  are  to  be  estimated  accor- 
ding to  the  rate  of  exchange,  usually  founded  upon  and 
regulated  by  the  course  of  trade,  existing  between  the  country 
where  the  debt  is  payable  and  the  country  where  the  action 
is  brought,  i 

In  the  case  of  a  debt  contracted  payable  in  a  particular 
place,  the  creditor  is  clearly  entitled  to  demand  payment  at 
the  time  and  place  appointed;  and  in  case  of  a  failure  to  pay, 
he  ought  to  receive  an  adequate  indemnity  for  the  failure. 
But  it  is  deemed  reasonable,  all  things  considered,  that  the 
indemnity  should  be  awarded  on  a  fixed  and  uniform  rule, 
so  as  to  give  the  plaintiff  suing  in  one  country  on  a  debt  due 

'Lord  Tenterden,  delivering  the  opinion  in  Scott  v.  Bevan,  says:  "  Speak- 
ing for  myself  personally,  I  must  say  that  I  still  hesitate  as  to  the  propriety  of 
this  conclusion."  Mr.  J.  Story  thinks  it  difficult  to  reconcile  the  decision  with 
the  doctrine  of  some  other  cases.  Story  on  Conflict  of  Laws,  §  308,  283,  284. 

44 


730  BILLS    OF  EXCHANGE  AND    PROMISSORY  NOTES. 

in  another,  the  standard  value  of  the  money  payable,  unin- 
fluenced by  the  fluctuating  rate  of  exchange. 

The  name  of  the  instrument  indicates  the  office  of  a  bill  of 
exchange;  which  is,  in  general  terms,  to  exchange  a  debt  or 
credit  due  in  one  place  or  country. for  a  debt  or  credit  due  in 
another  place  or  country.  This  being  a  principal  function  of 
the  draft  or  bill  of  exchange,  the  drawer  and  indorsers  are 
respectively  liable  thereon  to  the  holder  for  all  damages  sus- 
tained by  him  in  consequence  of  the  dishonor  of  the  bill;  and 
among  these  damages  is  to  be  included  a  sum  sufficient  to 
cover  the  premium  necessary  to  be  paid  on  a  re-exchange.  1 
Thus,  where  a  bill  drawn  at  Mobile  in  Alabama,  on  a  mer- 
chant of  Glasgow  in  Scotland,  is  returned  dishonored  for  non- 
payment, the  holder  is  entitled  to  recover  thereon  in  an  action 
against  the  drawer,  or  against  one  who  indorsed  the  bill  at 
Mobile,  the  statutory  damages  allowed  by  that  state;  and  in 
the  absence  of  proof  of  any  statute  on  the  subject,  the  holder 
recovers  simply  re-exchange,  with  interest  and  necessary 

1  Chitty  on  Bills,  684.  "  Re-exchange  is  the  expense  incurred  by  the  bill 
being  dishonored  in  a  foreign  country  in  which  it  is  payable,  and  returned  to 
the  country  in  which  it  is  made  or  indorsed,  and  there  taken  up.  The  amount 
of  it  depends  on  the  course  of  the  exchange  between  the  countries  through 
whicli  the  bill  has  been  negotiated.  It  is  not  necessary  for  the  plaintiff  to  shew 
that  he  has  paid  the  re-exchange;  it  suffices  if  he  be  liable  to  pay.it;  but  if 
the  jury  find  that  there  was  not  at  the  time  any  course  of  re-exchange  between 
the  two  foreign  places,  then  no  re-exchange  is  recoverable.  It  appears  not  to 
be  decided  whether  any  exchange  or  re-exchange  can  be  allowed  between  this 
and  an  enemy's  country.  It  is  said  that  the  relative  abundance  or  scarcity  of 
money  in  different  countries,  is  what  forms  the  exchange  between  those 
countries.  In  the  drawing  of  bills  on  a  foreign  country,  the  value  of  money  in 
that  country  is  the  first  thing  to  be  inquired  into;  thus  for  instance,  supposing 
71,000  livres  turnois  are  worth  603/  19s  IQd  English  money  sterling,  and  that 
an  English  merchant  has  sold  goods  of  the  value  of  603Z  19s  10<J  to  a  French- 
man, who  wishes  to  pay  for  the  same  by  a  bill  of  exchange  payable  in  France, 
the  bill  must  of  course  be  drawn  for  71,000  livres  turnois;  if  at  the  time  the 
bill  is  due  the  exchange  is  in  favor  of  France,  and  consequently  the  value  of 
71,000  livres  turnois  exceeds  that  of  603J  19s  lOd  English  money,  and  the  bill 
be  returned  to  this  country,  and  the  drawer  or  an  indorser  be  called  on  to  take 
it  up,  he  may,  as  in  the  case  of  Mellish  v.  Simeon,  be  obliged  to  pay  300/  4* 
5d  more  than  the  amount  of  the  bill,  which  sum  forms  what  is  called  the  re- 
exchange,  and  is  the  difference  between  the  draft  and  re-draft." 


RE- EXCHANGE.  731 

expenses,  i  If  the  bill  has  been  negotiated  through  another 
country,  the  re-exchange  must  be  allowed  between  the  coun- 
tries through  which  it  was  negotiated.  Simeon  in  London, 
draws  a  bill  of  exchange  on  Boyd  &  Co.,  in  Paris,  which  after 
having  been  negotiated  through  Amsterdam,  is  presented  to 
the  drawees,  who  refuse  to  pay  it  on  account  of  a  recent  law 
of  France  prohibiting  such  payment:  the  drawer  here  is  liable 
for  the  whole  amount  of  the  re-exchange  between  Paris  and 
Amsterdam,  and  between  Amsterdam  and  London;  the  bill 
having  been  taken  up  by  the  indorser  in  Amsterdam,  and  trans- 
mitted from  thence  to  the  place  where  it  was  drawn.  2 

"  The  nature  of  the  transaction  which  gives  rise  to  the 
question  of  exchange  and  re-exchange  is  this  :  A  merchant 
in  London  draws  on  his  debtor  in  Lisbon  a  bill  in  favor  of 
another  for  so  much  in  the  currency  of  Portugal,  for  which 
he  receives  its  corresponding  value  at  the  time  in  English 
currency;  and  that  corresponding  value  fluctuates  from  time 
to  time,  according  to  the  greater  or  lesser  demand  there  may 
be  in  the  London  market  for  bills  on  Lisbon,,  and  the  facility 
of  obtaining  them;  the  difference  of  that  value  constitutes  the 
rate  of  exchange  on  Lisbon.  The  like  circumstances  and  con- 
siderations take  place  at  Lisbon,  and  constitute  in  like  manner 
the  rate  of  exchange  on  London.  When  the  holder,  there- 
fore of  a  bill  drawn  on  Lisbon  is  refused  payment  of  it  in 
Lisbon,  the  actual  loss  which  he  sustains  is  not  the  identical 
sum  which  he  gave  for  the  bill  in  London,  but  the  amount  of 
its  contents  if  paid  at  Lisbon,  where  it  was  due,  and  the  sum 
which  it  will  cost  him  to  replace  that  amount  upon  the  spot 
by  a  bill  upon  London,  which  he  is  entitled  to  draw  upon  the 
persons  there  who  are  liable  to  him  upon  the  former  bill. 
That  cost,  whatever  it  may  be,  constitutes  his  actual  loss  and 
the  charge  for  re-exchange."  3 

-1  Cowperthwaite  v.  Sheffield,  1  Sand.  R.,  416. 

9  Mellish  v.  Simeon,  2  H.  Black.  R.,  378. 

1  De  Tastet  v.  Baring,  11  East,  265.  The  bill  in  this  case  was  drawn  in 
London  on  Lisbon,  payable  twelve  months  after  date ;  and  when  it  was  pre- 
sented for  payment,  Lisbon  being  occupied  by  the  enemy,  it  was  refused  and 
returned  protested  for  non-payment ;  but  the  plaintiff  failed  to  recover  re- 


732  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

Immediately  on  the  dishonor  of  the  bill  the  holder  has  a 
right  under  the  law-merchant  to  redraw  from  the  place  where 
the  bill  was  payable,  on  the  drawer  or  indorser,  as  the  case 
may  require,  for  the  amount  due  on  the  protested  paper, 
including  expenses  and  re-exchange;  and  if  the  holder  redraw 
upon  his  immediate  indorser ,  for  an  amount  sufficient  to  cover 
re-exchange  between  the  place  of  dishonor  and  the  place  of 
indorsement ,;  the  indorser  may  thereupon  redraw  upon  his 
indorser  for  an  amount  sufficient  to  cover  what  he  has  been 
obliged  to  pay,  together  with  re-exchange;  and  so  on  Jill  the 
bill  comes  home  to  the  drawer,  burdened  with  these  succes- 
sive and  sometimes  greatly  aggravated  damages,  i  But  as  it 
is  a  well  settled  rule  that  the  contract  of  each  of  the  parties, 
drawer  and  indorser,  is  to  be  governed  by  the  law  of  the  place 
where  it  is  made,  the  damages  cannot  exceed  the  rate  allowed 
by  that  law ;  and  the  custom  of  this  country  is  to  limit  the 
amount  of  damages  recoverable  on  protested  bills  to  a  certain 
per  cent. 

The  custom  in  this  respect  began  at  a  very  early  day,  and 
has  resulted  in  the  enactment  of  statutes  in  nearly  all  the 
states,  prescribing  the  measure  of  damages  to  be  awarded  on 

1  2  Hen.  Black.  R.,  378.  In  Mellish  v.  Simeon,  a  bill  drawn  in  London  on 
Paris  for  600/,  and  negotiated  through  Amsterdam,  came  back  to  the  drawer 
charged  with  300J  damages,  making  the  sum  payable  thereon  over  900Z  ; 
Bank  of  the  United  States  v.  The  U.  States,  2  How.  U.  S.  K.,  711. 


exchange,  because,  it  did  not  appear  that  there  was  a  course  of  re-exchange 
between  Lisbon  and  London  at  the  time  of  the  dishonor,  or  that  the  plaintiff 
had  paid  or  was  liable  to  pay  the  same. 

Pollard  v.  Sir  Robert  Henies,  3  Bos.  and  Pull.,  335.  A  deposited  a  sum 
of  money  at  the  banking  house  of  B  in  Paris,  for  which  B  gave  him  his 
note  "  payable  in  Paris,  or  at  the  choice  of  the  bearer  at  the  Union  Bank  in 
Dover,  or  at  my  usual  residence  in  London,  according  to  the  course  of  ex- 
change upon  Paris."  After  this  note  was  given  the  direct  course  of  exchange 
between  London  and  Paris  ceased  altogether,  having  been  previous  to  its  total 
cessation  extremely  low;  the  note  was  at  a  subsequent  period  presented  for 
acceptance  and  payment  at  the  residence  of  B  in  London,  at  which  time  there 
was  a  circuitous  course  of  exchange  upon  Paris  by  way  of  Hamburgh.  Held 
that  A  was  entitled  to  recover  upon  the  note  according  to  such  circuitous 
course  of  exchange  upon  Paris  at  the  time  when  the  note  was  presented.  2 
Campb.,  65. 


RE-EXCHANGE.  733 

the  return  of  dishonored  bills,  i  We  say  on  the  return  of 
dishonored  bills,  for  the  acceptor  is  not  liable  at  common  law 
for  re-exchange;  his  engagement  being  to  pay  according  to 
the  laws  of  the  country  where  the  acceptance  is  made.  2  If 
sued  by  the  holder  of  the  bill,  the  recovery  is  ordinarily  had 
at  the  place  where  the  bill  was  payable,  so  that  there  can  be 
no  occasion  for  adding  the  re-exchange.  But  the  reason  of 
the  rule  does  not  apply,  certainly  not  in  its  full  force,  where 
the  bill  has  been  returned  protested  and  the  damages  paid 
thereof  by  the  drawer,  who  brings  an  action  upon  the  bill  in 
his  own  name  against  the  acceptor;  in  this  case,  the  drawer 
having  funds  in  the  hands  of  the  acceptor,  has  suffered  an 
actual  damage  in  consequence  of  the  acceptor's  default. 
Nevertheless,  it  is  clear  that  the  latter  is  not  liable,  under  the 
law  merchant,  on  his  contract  of  acceptance,  for  any  thing 
more  than  the  face  of  the  bill  with  interest;  3  though  he  may, 
doubtless,  render  himself  liable  for  the  damages  by  a  special 
engagement.  4 

As  against  the  drawer  or  indorser,  the  doctrine  of  re- 
exchange  is  founded  upon  equitable  principles.  A  bill  is 
drawn  in  this  country,  payable  at  Paris,  in  France.  The 
payee  gives  a  premium  for  it  under  the  expectation  of  receiving 
the  amount  at  the  time  and  place  where  the  bill  is  made  pay- 
able. It  is  protested  for  non-payment.  Now  the  payee  and 
holder  is  entitled  to  the  amount  of  the  bill  in  Paris.  The 
same  sum  paid  in  this  country,  including  costs  of  protest  and 
other  charges,  is  not  an  indemnity.  The  holder  can  only  be 
remunerated  by  paying  to  him  at  Paris,  on  the  day  of  pay- 
ment, the  principal  with  costs  and  charges;  or  by  paying  to 
him  in  this  country  those  sums,  together  with  the  difference  in 
value  between  the  whole  sum  at  Paris,  and  the  same  sum  in 

1  Hendricks  v.  Franklin,  4  John.  R.,  119.  Twenty  per  cent,  was  the  rate 
of  damages  formerly  allowed  in  this  state,  to  be  added  to  the  rate  of  exchange, 
Graves  v.  Dash,  12  John.  R.,  17;  6  Mass.  R.,  161;  9  id.  7. 

1  Napier  T,  Schneider,  12  East,  420;  Hardwicke  v.  Farmer's  Bank,  8  Porter. 
539. 

*  £iBg  v.  Phillips,  Peters  C.  C.,  350;  Armstrong  v.  Brown,  1  Wash.  C.  C., 
43  321. 

4  Greene  v.  Goddard,  9  Mete.,  212;  Randolph  v.  Parish,  9  Porter,  76. 


734  BILLS    OF  EXCHANGE  AND  PROMISSORY  NOTES. 

this  country.  And  this  difference  in  value  is  ascertained  by 
the  premium  on  a  bill  drawn  in  Paris  and  payable  in  this 
country,  which  should  sell  at  Paris  for  the  sum  claimed,  i 
Having  engaged  as  drawer  or  indorser  of  the  bill,  that  it 
should  be  paid  when  due  at  Paris  he  is  bound  to  indemnify 
the  holder  for  the  loss  sustained  by  him  in  consequence  of  its 
non-payment. 

When  there  is  an  established  rate  of  exchange  between 
the  place  where  a  bill  is  drawn  or  negotiated,  and  the  place 
where  it  is  payable,  it  is  not  difficult  to  ascertain  and*  deter- 
mine the  damages  that  are  justly  recoverable  on  the  bill  against 
the  drawer  and  indorser.  But  when  a  bill  is  drawn  in  one 
State  or  territory  on  another,  between  which  there  is  but  little 
direct  intercourse  and  no  regular  exchange,  it  becomes  impor- 
tant as  a  matter  of  convenience  to  prescribe  the  damages  to 
be  allowed  by  statute;  which  has  been  already  done  in  all  the 
States,  with  two  or  three  exceptions. 

In  New- York,  the  rate  of  damages  to  be  allowed  and  paid 
upon  the  usual  protest  for  non-payment  of  bills  of  exchange, 
drawn  or  negotiated  within  this  State,  is  as  follows : 

1.  If  such  bill  shall  have  been  drawn  upon  any  person  or 
persons  at  any  place  in  either  of  the  Eastern  or  New-England 
States,  in  New-Jersey,  Pennsylvania,  Ohio,  Delaware,  Mary- 
land or  Virginia,  or  in  the  District  of  Columbia,  three  dollars 
upon  the  hundred,  upon  the  principal  sum  specified  in  such 
bill. 

2.  If  such  bill  shall  have  been  drawn  upon  any  person  or 
persons  at  any  place  in  either  of  the  States  of  North  Carolina, 
South  Carolina,  Georgia,  Kentucky,  or  Tennessee,  five  dollars 
upon  the  hundred,  upon  the  principal  sum  specified  in  such 
bill. 

3.  If  such  bill  be  drawn  upon  any  person  or  persons  at  any 
place  in  any  other  State  or  territory  of  the  United  States,  or 
at  any  other  place  on  or  adjacent  to  this  continent  and  north 
of  the  equator,  or  in  any  British  or  other  foreign  possessions 

1  Bank  of  U.  S.  v.  The  United  States,  2  How.  U.  S.,  711,  per  Mr.  Justice 
McLean. 


DAMAGES.  735 

in  the  West  Indies,  or  elsewhere  in  the  Western  Atlantic 
ocean,  ten  dollars  upon  the  hundred,  upon  the  principal  sum 
specified  in  such  bill. 

4.  If  such  bill  shall  have  been  drawn  upon  any  person  or 
persons  in  any  port  or  place  in  Europe,  ten  dollars  upon  the 
hundred,  upon  the  principal  sum  specified  in  such  bill. 

These  damages  are  in  lieu  of  interest,  charges  of  protest, 
and  all  other  charges  incurred  previous  to  and  at  the  time  of 
giving  notice  of  non-payment;  but  the  holder  of  such  bill  shall 
be  entitled  to  demand  and  recover  lawful  interest  upon  the 
aggregate  amount  of  the  principal  sum  specified  in  such  bill, 
and  of  the  damages  thereon,  from  the  time  at  which  notice  of 
protest  for  non-payment  shall  have  been  given,  and  payment 
of  such  principal  sum  shall  have  been  demanded. 

When  the  contents  of  the  bill  are  expressed  in  the  money 
of  account  of  the  United  States,  the  amount  due  thereon,  and  of 
the  damages  allowed,  are  to  be  ascertained  and  determined, 
without  any  reference  to  the  rate  of  exchange  existing  between 
this  State  and  the  place  on  which  such  bill  shall  have  been 
drawn,  at  the  time  of  demand  of  payment,  or  of  notice  of  non- 
payment. On  the  other  hand,  where  the  contents  of  the  bill 
are  expressed  in  the  money  of  account  or  currency  of  any 
foreign  country,  the  amount  due,  exclusive  of  the  damages 
payable  thereon,  is  to  be  ascertained  and  determined  by  the 
rate  of  exchange,  or  the  value  of  such  foreign  currency,  at  the 
time  of  the  demand  of  payment. 

The  same  rate  of  damages  is  allowed  on  the  protest  for  non- 
acceptance,  in  lieu  of  interest,  charges  of  protest,  and  all 
other  charges  incurred  previous  to  and  at  the  time  of  giving 
notice  of  non-acceptance;  but  the  holder  is  entitled  to  recover 
interest  upon  the  aggregate  amount  of  the  principal  sum  spe- 
cified in  the  bill  and  of  the  damages  thereon,  from  the  time  at 
which  notice  of  protest  for  non-acceptance  was  given.  These 
damages,  allowed  by  statute,  can  be  recovered  only  by  the 
holder  of  the  bill,  who  shall  have  purchased  the  same,  or 
some  interest  therein,  for  a  valuable  consideration,  i 

1  Revised  Statutes,  64   65,  3d  ed. 

Hargous  v.  Laheus,  3  Sand*.  K.;  213,    This  action  was  brought  by  the 


736  BILLS   OF   EXCHANGE  AND  PROMISSORY  NOTES. 

Maine.  When  an  action  is  brought  on  a  bill  of  exchange] 
drawn  or  indorsed  in  this  state,  and  payable  in  any  place  out 
of  the  state,  but  within  the  United  States,  and  being  pro- 
tested for  non-acceptance  or  non-payment,  the  holder  reco- 
vers against  the  acceptor,  drawer  or  indorser,  not  only 
the  contents  of  the  bill  and  interest,  but  in  addition  thereto 
recovers  damages,  at  the  rate  of  three  per  cent  on  the 
amount  of  the  bill,  if  it  be  payable  in  either  of  the  states 
of  New  Hampshire,  Massachusetts,  Vermont,  Connecticut, 
Khode  Island,  or  New- York;  and  if  in  New- Jersey,  Pennsyl- 
vania, Delaware,  Maryland,  Virginia,  North  or  South  Carolina, 
Georgia,  or  the  District  of  Columbia,  at  the  rate  of  six  per 
cent;  and,  if  in  any  other  state,  at  the  rate  of  nine  per  cent. 
On  bills  payable  in  the  state  seventy-five  miles  from  the  place 
where  drawn,  the  holder  recovers  one  per  cent  damages,  i 

Massachusetts.  On  bills  drawn  or  indorsed  in  the  state  and 
payable  without  the  limits  of  the  United  States,  the  party 

1  R.  S.,  510,  edition  of  1841. 

Fiske  v.  Foster,  10  Mete.,  597.  In  this  case  the  bill  was  drawn  at  Bangor, 
in  the  State  of  Maine,  upon  the  defendant,  a  citizen  of  Massachusetts,  in 
favor  of  the  plaintiff,  a  citizen  of  Maine,  and  was  accepted  by  the  defendant ; 
and  the  court  held  that  the  plaintiff  was  not  entitled  to  recover  the  damages 
given  by  the  Revised  Statutes  of  Maine,  in  an  action  brought  in  Massachusetts. 
Such  statutes  have  force  only  within  the  state  enacting  them. 


holders  of  a  bill  drawn  in  New- York  on  Havre,  in  France,  against  the  drawers 
in  New- York.  The  bill  being  dishonored  and  returned,  the  plaintiffs  remitted 
to  their  correspondent  at  Havre  to  cover  the  same;  and  afterwards  returned 
the  protested  bill  to  Paris,  and  there  received  a  part  of  the  amount  of  the 
bill.  And  the  Superior  Court  say  :  "  The  allowance  of  damages  rests  upon 
the  theory,  that  the  holder  of  the  bill,  by  reason  of  its  non-payment,  is  put 
to  the  expense  of  remitting  the  same  amount  to  replace  that  expressed  in  the 
bill,  in  the  country  where  it  was  payable.  The  rate  of  exchange  measures 
the  damages,  in  the  absence  of  a  statutory  or  customary  regulation.  This 
allowance  is  made  without  any  inquiry  as  to  the  fact  of  a  remittance  to  cover 
the  amount  of  the  protested  bill.  The  liability  to  pay  the  damages  becomes 
perfect,  on  the  return  of  the  protested  bill.  A  subsequent  part  payment  by 
the  acceptor,  can  have  no  greater  influence  in  reducing  or  extinguishing  that 
liability,  than  a  similar  partial  payment  by  the  drawer  or  any  other  party.  It 
is  as  fixed  and  determinate  an  obligation  as  the  debt  represented  by  the  sum 
expressed  in  the  bill  itself."  Laing  v.  Barclay,  3  Stark.  R.,  38;  and  the 
Bangor  Bank  v.  Hook,  5  Greenl.  R.,  174,  commented  upon. 


DAMAGES. 


737 


liable  pays  on  due  notice  and  demand  at  the  current  rate  of 
exchange,  and  damages  at  the  rate  of  five  per  cent  upon  the 
contents  with  interest  thereon  from  the  date  of  the  protest : 
but  on  bills  payable  in  Africa,  beyond  the  Cape  of  Good 
Hope,  or  any  place  in  Asia  or  the  islands  thereof,  the  party 
liable  pays  the  same  at  par  value,  together  with  twenty  per 
cent  thereon  in  full  of  all  damages,  interest  and  charges.  On 
bills  drawn  or  indorsed  in  the  state,  and  payable  in  any  part 
of  New  England  or  in  New- York,  the  party  liable  pays  two 
per  cent  with  interest,  costs,  and  charges;  and  such  bills 
payable  in  New  Jersey,  Pennsylvania,  Delaware,  and  Mary- 
land, three  per  cent;  on  such  bills  payable  in  Virginia  and 
the  District  of  Columbia,  North  Carolina,  South  Carolina,  or 
Georgia,  four  per  cent;  and  on  bills  payable  elsewhere  in  the 
United  States,  five  per  cent,  i 

On  bills  and  orders  for  the  payment  of  money  within  the 
state,  at  a  distance  of  seventy-five  miles  from  the  place  where 
they  are  drawn  or  indorsed,  the  holder  is  allowed  to  recover 
one  per  cent  damages. 

Connecticut.  Whenever  any  bill  of  exchange,  drawn  or 
negotiated  within  this  state,  upon  any  person  in  any  other 
state,  territory  or  district  of  the  United  States,  shall  be 
returned  unpaid,  and  shall  have  been  duly  protested  for  non- 
payment, in  the  manner  usual  in  cases  of  foreign  bills  of 
exchange,  the  person  to  whom  the  same  is  payable  shall  be 
entitled  to  recover  from  the  drawer,  or  the  indorsers  of  such 

1  R.  S.  of  Mass.,  of  1836,  p.  302,  303;  Laws  of  1837,  p.  272. 

Bowen  and  others  v.  Stoddard,  10  Mete.,  376.  The  acceptor  of  a  bill  is 
not  liable  to  the  payee  or  indorsee  for  damages;  ''  it  is  no  part  of  his  contract 
to  pay  them;  and  the  bill,  when  satisfied  by  him,  is  paid  at  the  place  where 
it  was  made  payable,  and  the  party  does  not  require,  nor  is  he  in  snch  a  case 
entitled  to  the  damages  given  by  statute  in  lieu  of  re-exchange.  The  holder, 
on  protest  for  non-payment,  is  at  liberty  to  pursue  his  remedy  against  the 
acceptor,  drawer  and  indorsers;  but  if  he  follows  the  acceptor  to  judgment, 
he  cannot  charge  him  with  damages."  As  between  the  drawer  and  acceptor, 
the  damages  may,  it  seems,  be  recovered  where  the  latter  was  bound  to  accept 
and  pay,  and  the  drawer  has  been  subjected  to  damages  by  his  neglect;  but 
even  here  the  acceptor  is  not  liable  for  the  damages  on  bis  contract  of  accep- 
tance. Kiggs  T.  Lindsay,  7  Cranch,  600. 


738  BILLS    OF  EXCHANGE  AND   PROMISSORY  NOTES, 

bill  the  damages  hereinafter  specified,  over  and  above  the 
principal  sum  for  which  such  bill  shall  have  been  drawn, 
together  with  lawful  interest  on  the  aggregate  amount  of  such 
principal  sum  and  damages,  from  the  time  at  which  notice  of 
such  protest  shall  have  been  given,  and  the  payment  of  the 
said  principal  sum  and  damages  shall  have  been  demanded ;  that 
is  to  say,  if  such  bill  shall  have  been  drawn  upon  any  person 
in  the  city  of  New- York,  two  per  cent  upon  the  principal 
sum;  if  upon  any  person  in  New  England  or  the  state  of 
New- York,  New  Jersey,  Pennsylvania,  Delaware,  Maryland, 
Virginia,  of  the  District  of  Columbia,  three  per  cent;  if  upon 
any  person  in  North  or  South  Carolina,  Georgia  or  Ohio,  five 
per  cent;  if  upon  any  person  in  any  other  state  or  territory 
of  the  United  States,  eight  per  cent;  and  such  damages  shall 
be  instead  of  interest  and  all  other  charges  up  to  the  time  of 
giving  notice  of  dishonor,  i 

Rhode  Island.  Bills  drawn  or  indorsed  in  this  state  on  any 
place  or  country  out  of  the  United  States,  subject  the  drawer 
or  indorser  to  damages  for  non-acceptance  or  non-payment  to 
the  amount  of  ten  per  cent,  and  charges  of  protest,  with  six 
per  cent  interest  from  protest.  Bills  drawn  within  the  state, 
called  inland  bills,  for  the  payment  of  money  out  of  the  state, 
subject  the  drawer  or  indorser  to  five  per  cent  damages, 
charges  of  protest,  and  six  per  cent  interest  from  date  of 
protest.  2 

Pennsylvania.  The  holder  of  bills  of  exchange  drawn  or 
indorsed  in  this  state  and  returned  unpaid  with  a  legal  protest, 
may  receive  and  recover  from  the  drawer  or  indorser  the 
damages  hereafter  specified  over  and  above  the  amount  of  the 
bill  and  charges  of  protest,  with  interest  thereon  from  the 
time  of  protest  and  notice;  that  is  to  say,  if  such  bill  shall 
have  been  drawn  on  any  person  in  any  of  the  United  States 
or  territories  .thereof,  excepting  the  state  of  Louisiana,  five  per 
cent  upon  such  principal  sum ;  if  drawn  on  any  person  of  or 
in  Louisiana,  or  of  or  in  any  other  state  or  place  in  North 

1  Statutes  of  Conn.,  compilation  of  1854,  p.  696. 

*  Public  Laws  of  Rhode  Island,  Revised  in  1844,  p.  287. 


DAMAGES.  739 

America,  or  the  islands  thereof,  excepting  the  north-west 
coast  of  America  and  Mexico,  or  of  or  in  any  of  the  West 
India  or  Bahama  islands,  ten  per  cent  upon  such  principal 
sum;  if  drawn  upon  any  person  of  or  in  the  island  of 
Madeira,  the  Canaries,  the  Azores,  the  Cape  de  Verd  islands, 
the  Spanish  Main  or  Mexico,  fifteen  per  cent  upon  the  princi- 
pal sum;  if  drawn  upon  any  person  of  or  in  any  state  or 
place  in  Europe  or  any  of  the  islands  thereof,  twenty  per  cent 
upon  the  principal  sum ;  if  drawn  upon  any  other  part  of  the 
world,  twenty-five  per  cent  upon  the  principal  sum. 

But  such  damages  are  in  lieu  of  interest  and  all  other 
charges,  except  the  charges  of  protest,  to  the  time  when  notice 
of  the  protest  and  demand  of  payment  shall  have  been  given 
and  made;  and  the  amount  of  such  bill  and  the  damages 
thereon  are  to  be  ascertained  and  determined  by  the  rate  of 
exchange,  or  value  of  the  money  or  currency  mentioned  in 
such  bill,  at  the  time  of  protest  and  demand  of  payment.  1 

Delaware.  The  damages  on  bills  of  exchange  drawn  on 
any  person  beyond  seas,  and  returned  unpaid,  with  legal 
protest,  shall  as  to  the  drawer,  indorser  and  all  concerned,  be 
at  the  rate  of  twenty  per  centum  on  the  contents  of  such  bills, 
in  addition  thereto.  2 

Maryland.  An  early  statute  gives  to  the  holder  of  any  bill 
of  exchange,  drawn  in  the  state  on  any.  person  in  a  foreign 
country,  regularly  protested,  a  right  to  receive  and  recover  so 
much  current  money  as  will  purchase  a  good  bill  of  exchange 
of  the  same  time  of  payment,  and  upon  the  same  place,  at 
the  current  exchange  of  such  bills,  and  also  fifteen  per  cent 
damages  upon  the  value  of  the  principal  sum  mentioned  in 
the  bill,  and  costs  of  protest,  together  with  legal  interest  upon 
the  value  of  the  principal  till  paid :  and  provides  that  if  any 
indorser  of  such  bill  shall  pay  to  the  holder  or  person  entitled 
to  the  same,  the  value  of  the  principal,  and  the  damages  and 

1  Laws  of  Pennsylvania,  Dunlop's  Compilation,  375.  The  act  cited  was 
passed  in  1821.  The  act  of  1849,  allow»  bills  to  be  drawn  payable  in  particu- 
lar funds,  with  the  current  rate  of  exchange  in  Philadelphia  or  any  other 
place  in  the  state,  and  leaves  the  parties  to  specify,  as  they  might  do  at  com- 
mon law  the  rate  of  damages  to  be  recovered  on  the  bill.  Id.  1156,  1157. 

*  Laws  of  Delaware,  Revised  Code  of  1852,  p.  183. 


740  BILLS  OF  EXCHANGE  AND   PROMISSORY  NOTES. 

interest  as  aforesaid,  such  indorser  is  to  have  a  right  to  receive 
and  recover  the  sum  paid,  with  legal  interest  upon  the  same 
from  the  drawer  or  any  other  person  liable  to  him  upon  the 
bill,  i 

Virginia.  When  a  bill  of  exchange  drawn  or  indorsed 
within  this  state  is  protested  for  non-payment,  there  must  be 
paid  by  the  party  liable  for  the  principal  of  such  bill,  in 
addition  to  what  else  he  is  liable  for,  damages  upon  the 
principal  at  the  rate  of  three  per  centum,  if  the  bill  be  paya- 
ble out  of  Virginia  and  within  the  United  States,  and  at  the 
rate  of  ten  per  centum  if  the  bill  be  payable  without  the 
United  States.  2 

North  Carolina.  The  damages  on  protested  bills  drawn  or 
indorsed  in  this  state  are  as  follows :  Where  the  bill  is  drawn 
or  indorsed  in  the  state  upon  any  person  or  corporation  in 
any  other  of  the  states,  or  the  territories  thereof,  three  per 
cent  on  the  principal  sum;  where  such  bill  is  drawn  or 
indorsed  upon  any  person  or  corporation  in  any  other  place  in 
North  America,  (excepting  the  north-west  coast  of  America,) 
or  in  any  of  the  West  India  or  Bahama  islands,  ten  per  cent 
upon  the  principal  sum;  where  such  bill  shall  be  drawn  or 
indorsed  upon  any  person  or  corporation  in  the  island  of 
Madeira,  the  Canaries,  the  Azores,  the  Cape  de  Verd  islands,  or 
in  any  other  state  or  place  in  Europe  or  South  America,  fifteen 
per  cent  on  the  principal  sum;  and  where  such  bill  shall  be 
drawn  or  indorsed  on  any  person  or  corporation  in  any  other 
part  of  the  world,  twenty  per  cent  on  the  principal  sum.  3 

South  Carolina.  In  this  state  an  early  statute  enacts,  that 
upon  all  bills  of  exchange  that  shall  be  drawn  upon  persons 

• 

resident  within  the  United  States,  and  out  of  the  state,  and 
shall  be  returned  protested,  the  damages  of  such  protested 
bills  shall  be  ten  per  cent  on  the  sum  drawn  for;  and  on  all 
bills  in  like  manner  drawn  upon  persons  resident  in  any  other 
part  of  North  America,  or  within  any  of  the  West  India 

1  Statute  of  1787,  cited  and  construed  in  Bank  of  the  United  States  v.  The 
United  States,  decided  in  1844,  2  Peters'  Rep.,  711. 
a  Virginia  Code  of  1849,  p.  582. 
8  Revised  Code  of  North  Carolina,  chap.  13,  p.  111,  112. 


DAMAGES.  74 1 

islands,  and  protested,  the  damages  shall  be  twelve  per  cent; 
and  on  all  bills  drawn  on  persons  resident  in  any  other  part 
of  the  world,  being  protested,  the  damages  shall  be  fifteen 
per  cent  on  the  sum  mentioned  in  said  bills  respectively,  and 
all  charges  incidental  thereto,  with  lawful  interest,  until  the 
same  be  paid,  i 

Georgia.  Whenever  any  bill  of  exchange,  drawn  or  nego- 
tiated within  this  state  upon  any  person  of  or  in  any  state, 
territory,  or  district  of  the  United  States,  is  returned  unpaid, 
duly  protested  in  the  manner  usual  in  cases  of  foreign  bills  of 
exchange,  the  person  or  persons  to  whom  the  same  is  or  may 
be  payable,  is  entitled  to  recover  and  receive  of  and  from  the 
drawer  or  indorser  five  per  cent  damages  over  and  above  the 
principal  sum  for  which  the  bill  is  drawn,  together  with  law- 
ful interest  on  the  aggregate  amount  from  the  time  of  giving 
notice  of  protest  and  making  demand  of  payment.  2 

The  holder  of  bills  of  exchange  drawn  on  any  place  beyond 
the  limits  of  the  United  States,  recovers  the  principal,  with 
postage,  protests,  other  necessary  expenses  and  interest  on  the 
amount  of  these  sums  from  the  date  of  the  protest  until  pre- 
senting the  same  for  payment  to  the  drawer  or  indorser  in 
Georgia;  and  also  the  premium  on  said  aggregate  amount  for 
a  new  bill  on  Georgia,  in  case  it  be  necessary  to  pay  a  pre- 
mium, and  if  not,  (return  bills  being  at  a  discount)  the  dis- 
count to  be  deducted;  and  the  holder  to  recover  damages  on 
the  amount  for  which  the  bill  was  drawn  at  the  rate  of  ten  per 
cent,  with  Georgia  interest.  3 

httffida.  Damages  are  allowed  on  foreign  protested  bills  of 
exchange,  at  the  rate  of  five  per  cent.  4 

Alabama.  The  damages  on  inland  bills  of  exchange,  pro- 
tested for  non-payment,  are  ten  per  cent;  and  on  foreign  bills 
of  exchange,  protested  for  non-payment,  fifteen  per  cent,  on 
the  sum  drawn  for.  But  such  damages  are  in  the  place  of  all 

1  Act  of  1786. 

1  Act  of  1828.    The  rule  is  the  same  without  any  reference  to  the  residenct 
of  the  drawer  or  acceptor.    Act  of  1889. 
1  T.  R.  R.  Cobb's  New  Digest,  Laws  of  Georgia,  621,  622. 
4  Thompson's  Digest.  Laws  of  Florida,  849,  published  in  1847. 


742  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES. 

charges,  except  costs  of  protest  incurred  previous  to,  and  at 
the  time  of  giving  notice  of  non-payment;  and  the  holder 
may  recover  legal  interest  upon  the  aggregate  of  principal  and 
damages  from  the  time  of  demand,  and  costs  of  protest. 

When  the  bill  is  drawn  for  money  of  the  United  States,  the 
amount  is  to  be  ascertained  without  reference  to  the  rate  of 
exchange;  but  when  drawn  for  money  or  currency  of  any 
foreign  country,  the  amount  is  to  be  ascertained  and  deter- 
mined by  the  rate  of  exchange,  at  the  time  of  the  demand  of 
payment. 

The  same  damages  are  allowed  on  the  dishonor  of  bills  by 
non-acceptance,  with  interest  on  the  principal  from  the  time 
when  it  ought  to  have  been  paid,  and  interest  on  the  damages 
from  the  dishonor,  i 

Mississippi.  On  all  bills  of  exchange  drawn  in  this  State 
upon  any  person  out  of  the  State  and  within  the  United  States, 
which  are  returned  protested,  ten  per  cent,  damages  are 
allowed;  and  on  bills  drawn  on  persons  resident  beyond  the 
limits  of  the  United  States,  returned  protested,  fifteen  per 
cent,  damages  on  the  principal  charges  and  interest.  .  On 
home  bills,  that  is,  bills  drawn  and  addressed  to  persons 
within  the  State,  payable  a  certain  time  after  sight  or  date, 
five  per  cent,  damages  are  allowed.  2 

Louisiana.  The  rate  of  damages  to  be  allowed  and  paid 
upon  the  usual  protest  for  non-acceptance  or  non-payment  of 
bills  of  exchange,  drawn  or  negotiated  within  this  State  shall 
be  as  follows  :  On  all  bills  drawn  on  and  payable  in  foreign 
countries,  ten  dollars  upon  the  hundred  upon  the  principal 
sum  specified  in  such  bills;  on  all  bills  drawn  on  and  paya- 
ble in  any  other  State  in  th^T  United  States,  five  dollars  upon 
the  hundred  upon  the  principal  sum  specified  in  the  bill. 
These  damages  are  in  lieu  of  interest,  charges  of  protest  and 
all  other  charges  incurred  previous  to,  and  at  the  time  of  giv- 
ing notice  of  non-acceptance  or  non-payment;  but  the  holder 
is  entitled  to  recover  lawful  interest  on  the  aggregate  of  the 

J  Code  of  Alabama,  §  1537-1541. 
9  Hutchinson's  Mississippi  Code,  639. 


DAMAGES.  743 

principal  sum  and  damages  from  the  time  of  giving  such 
notice  and  making  demand  of  payment.  When  the  contents 
of  the  bill  are  expressed  in  the  money  of  account  of  the  United 
States,  the  amount  of  the  principal  and  damages  are  to  be 
ascertained  and  determined  without  any  reference  to  the  rate 
of  exchange  at  the  time  of  the  notice  and  demand;  if  expressed 
in  the  money  or  currency  of  any  foreign  country,  then  the 
principal,  as  well  as  the  damages  payable  thereon,  must  be 
ascertained  and  determined  by  the  rate  of  exchange;  but 
when  the  value  of  the  foreign  currency  is  fixed  by  the  laws 
of  the  United  States,  the  value  thus  fixed  must  prevail,  i 

Ohio.  The  statutes  declare,  that  when  any  bill  of  exchange 
shall  be  drawn  for  the  payment  of  any  sum  of  money,  and 
such  bill  shall  be  legally  protested  for  non-acceptance  or 
non-payment,  the  drawer  or  drawers,  indorser  or  indorsers, 
shall  be  subject  to  the  payment  of  twelve  per  centum  damages 
thereon,  if  drawn  on  any  person  or  persons,  or  body  corporate 
without  the  jurisdiction  of  the  United  States;  and  six  per 
centum  damages  thereon,  if  drawn  on  any  person  or  persons, 
or  body  corporate,  within  the  jurisdiction  of  the  United  States, 
and  without  the  jurisdiction  of  this  State;  and  the  said  bills 
shall  in  all  cases  bear  an  interest  of  six  per  centum,  from  the 
date  of  the  protest,  until  the  money,  therein  drawn  for,  shall 
be  fully  satisfied  and  paid. 

But  no  damages  are  recoverable  thereon  in  case  there  is  an 
agreement  or  understanding  between  the  drawer  or  indorser 
and  the  payee  or  indorsee  permitting  the  bill  to  be  paid  at 
any  other  place  than  that  on  which  it  was  drawn.  2 

Indiana.  Damages  payable  on  protest  for  non-payment  or 
non-acceptance  of  a  bill  of  exchange,  drawn  or  negotiated 
within  this  State,  shall  be,  if  drawn  upon  any  person,  at  any 
place  out  of  this  State,  but  within  the  United  States,  five  per 
cent,  but  if  upon  any  person  at  any  place  without  the  United 

1  Revised  Statutes  of  Louisiana,  43.  44,  published  in  1856.     I  find  nothing 
in  Hartley's  Digest  of  the  Laws  of  Texas  on  the  subject  of  damages  on  bills 
f  exchange,  nothing  under  the  proper  head  in  his  index. 
»  Swan's  R.  S.,  Derby's  ed.  of  1864,  page  576. 


744  BILLS  OF   EXCHANGE  AND    PROMISSORY  NOTES 

States,  ten  per  cent,  on  the  principal  of  such.  bill.  *  * 
Beyond  such  damages,  no  interest  or  charges  accruing  prior 
to  protest  shall  be  allowed;  but  interest  from  the  date  of  the 
protest  may  be  recovered. 

As  to  any  bill  payable  within  the  United  States,  the  rate  of 
exchange  is  not  taken  into  account.  And  no  damages  beyond 
cost  of  protest  are  chargeable  against  drawer  or  indorser,  if 
upon  notice  of  protest,  and  demand  of  the  principal  sum,  the 
same  is  paid;  nor  can  the  holder  recover  damages  unless  he 
has  given  value  therefor,  i 

Illin&is.  On  the  return  of  bills  drawn  on  foreign  countries, 
protested  for  non-payment  or  non-acceptance,  the  drawer  or 
indorser  must,  on  notice,  pay  the  bill,  with  legal  interest  from 
the  time  when  it  should  have  been  paid,  and  ten  per  cent* 
damages,  with  the  costs  and  charges  of  protest.  On  the  return 
of  bills  drawn  on  any  of  the  States  or  territories,  given  "  for 
value  received,"  the  holder  recovers  the  amount  of  the  bill, 
five  per  cent,  damages,  with  costs  and  charges  of  protest.  2 

Michigan.  The  holder  of  bills  drawn  or  indorsed  in  this 
State,  payable  out  of  the  United  States,  is  entitled  to  the  con- 
tents of  the  bill,  on  due  notice  and  demand,  the  current  rate 
of  exchange  at  the  time  of  demand,  and  damage  at  the  rate 
of  five  per  cent,  with  interest  on  the  principal  from  the  date 
of  protest :  on  bills  payable  in  Wisconsin,  Illinois,  Indiana, 
Pennsylvania,  Ohio  or  New- York,  three  per  cent  on  the  prin- 
cipal; on  .bills  payable  in  Missouri,  Kentucky,  Maine,  New 
Hampshire,  Vermont,  Massachusetts,  Rhode  Island,  Connecti- 
cut, New  Jersey,  Delaware,  Maryland,  Virginia,  or  the  district 
of  Columbia,  five  per  cent;  and  on  bills  payable  elsewhere 
within  the  States,  ten  per  cent.  3 

:  1  Revised  Statutes  of  Indiana,  379,  published  in  1852. 

a  Revised  Statutes  of  Illinois,  of  1845,  page  384.  The  act  speaks  of 
"  foreign  bills,"  evidently  meaning  bills  drawn  on  foreign  countries,  and  not 
bills  drawn  on  other  states. 

The  State  Bank  v.  Bowers,  8  Blackf.,  72.  Silas  Bowers  drew  the  bill  in 
question  at  his  residence  in  Indiana,  payable  in  New  Orleans,  where  the  same 
was  addressed  to  himself  by  name;  and  the  bill  being  protested  for  non-pay- 
ment, the  drawer  was  held  liable  for  five  per  cent,  damages. 

8  Revised  Statutes  of  1846,  p.  156. 


DAMAGES. 


745 


Wisconsin.  Whenever  any  bill  of  exchange,  drawn  or 
indorsed  within  this  State,  and  payable  without  the  limits  of 
the  United  States,  is  duly  protested  for  non-acceptance  or  non- 
payment, the  party  liable  for  the  contents  of  the  bill,  must  on 
due  notice  and  demand  thereof,  pay  the  same  at  the  current 
rate  of  exchange  at  the  time  of  the  demand,  and  damages  at 
the  rate  of  five  per  cent,  upon  the  contents  thereof,  together 
with  interest  on  the  said  contents,  to  be  computed  from  the 
date  of  the  protest;  and  said  amount  of  contents,  damages 
and  interest,  are  in  full  of  all  damages,  charges  and  expenses. 

On  dishonored  bills  drawn  on  adjoining  States,  the  holder 
recovers  five  per  cent,  damages,  interest,  costs  and  charges  of 
protest.  On  bills  drawn  on  other  States,  the  holder  recovers 
interest,  ten  per  cent,  damages,  costs  and  charges  of  protest,  l 

Iowa.  The  rate  of  damages  to  be  allowed  and  paid  upon  the 
non-acceptance  or  non-payment  of  bills  of  exchange  drawn  or 
indorsed  in  this  State,  where  damages  are  recoverable,  shall 
be  as  follows :  If  drawn  upon  a  person  at  a  place  out  of  the 
United  States,  or  in  California  or  the  Territory  of  Oregon,  Utah 
or  New-Mexico,  ten  per  cent  upon  the  principal  with  interest 
thereon  from  the  time  of  the  protest;  if  drawn  upon  a  person 
at  any  place  in  the  State  of  Iowa,  Missouri,  Illinois,  Wiscon- 
sin or  Minnesota,  three  per  cent  with  interest;  if  drawn  upon 
a  person  at  any  place  in  the  State  of  Arkansas,  Lousiana, 
Mississippi,  Tennessee,  Kentucky,  Indiana,  Ohio,  Virginia, 
District  of  Columbia,  Pennsylvania,  Maryland,  New-Jersey, 
New-York,  Massachusetts,  Rhode  Island  or  Connecticut,  five 
per  cent  with  interest;  if  drawn  upon  a  person  in  any  other 
State  in  the  United  States,  eight  per  cent,  with  interest.  2 

Missouri.  On  bills  drawn  or  negotiated  in  this  State,  and 
protested  for  non-acceptance  and  non-payment,  damages  are 
allowed  as  follows :  if  drawn  on  a  person  within  the  State, 
four  per  cent  on  the  principal;  if  drawn  on  any  person 
without  the  State,  but  within  the  United  States  or  the  territo- 
ries thereof,  ten  per  cent  on  the  principal;  and  if  drawn  on 

1  Revised  Statutes  of  1849,  p.  263,  §  8. 
1  Code  of  Iowa,  151. 

45 


746  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

any  place  without  the  United  States,  twenty  per  cent  on  the 
principal.  And  the  acceptor  is  made  liable  for  damages  on 
dishonored  bills,  accepted  within  the  State,  at  the  rate  of  four 
per  cent  on  the  principal;  and  on  bills  accepted  out  of  the 
State,  but  within  the  United  States,  at  the  rate  of  ten  per  cent; 
and  in  other  cases  at  the  rate  of  twenty  per  cent. 

These  damages  are  in  lieu  of  interest,  charges  and  expenses 
prior  to  notice;  after  that  the  holder  recovers  interest  on  the 
principal  and  damages,  i 

Kentucky.  Where  any  bill  of  exchange,  drawn  on  a  person 
out  of  the  United  States,  is  protested  for  non-payment  or  non- 
acceptance,  it  bears  ten  per  cent  per  year  interest  from  the 
day  of  the  protest,  for  not  longer  than  eighteen  months,  unless 
payment  be  sooner  demanded  from  the  party  to  be  charged; 
such  interest  to  be  recovered  up  to  the  time  of  judgment,  and 
the  judgment  to  bear  legal  interest  thereafter.  Damages  on 
all  other  bills  are  disallowed.  2 

Tennessee.  On  bills  of  exchange  drawn  within  this  State 
upon  persons  in  any  other  State  or  territory,  the  holder  is 
entitled  to  recover  in  an  action  against  the  drawer  or  indorser 
damages  over  and  above  interest  and  charges,  as  follows  :  if 
such  bill  shall  have  been  drawn  on  a  person  in  any  of  the 
United  States,  or  the  territories  thereof,  three  per  cent  upon 
the  principal;  if  upon  a  person  in  any  other  State  or  place  in 
North  America  bordering  on  the  Gulf  of  Mexico,  or  in  any  of 
the  West  India  islands,  fifteen  per  cent  upon  the  principal;  if 
upon  a  person  in  any  other  part  of  the  World,  twenty  per  cent 
upon  the  principal.  But  these  damages  are  in  lieu  of  interest 
and  all  other  charges,  except  the  charge  of  protest,  up  to  the 
time  when  notice  and  demand  of  payment,  were  given  and 
made.  3 

Arkansas.  Every  bill  of  exchange  expressed  to  be  for 
value  received,  drawn  or  negotiated  in  this  State,  payable 
after  date  to  order  or  bearer,  shall,  when  returned  protested 

1  Revised  Statutes  of  Missouri,  of  1845,  p.  173,  174. 
a  Revised  Statutes  of  Kentucky,  195>  adopted  and  published  in  1852. 
8  Statutes  of  Tennessee,  by  Caruthers  and  Nicholson,  published  in  1836 
The  act  cited  is  an  old  statute. 


DAMAGES.  747 

for  non-payment  or  non-acceptance,  be  subject  to  damages  in 
the  following  cases : 

1st.  If  drawn  on  any  person  at  any  place  in  the  State,  at 
the  rate  of  two  per  centum  on  the  principal. 

2d.  If  drawn  on  any  person  and  payable  in  any  of  the 
States  of  Alabama,  Louisiana,  Mississippi,  Tennessee,  Ken- 
tucky, Ohio,  Indiana,  Illinois  and  Missouri,  or  any  point  on 
the  Ohio  river,  at  the  rate  of  four  per  centum  on  the  principal. 

3d.  If  drawn  on  any  person  and  payable  at  any  place 
within  the  limits  of  the  United  States,  not  hereinbefore  ex- 
pressed, at  the  rate  of  five  per  centum  on  the  principal. 

4th.  If  drawn  on  any  person  and  payable  at  any  port  or 
place  beyond  the  limits  of  the  United  States,  at  the  rate  of 
ten  per  centum  on  the  principal. 

The  acceptor  of  bills  drawn  on  persons  within  the  State  is 
required  to  pay  as  follows:  1.  If  drawn  within  the  State, 
two  per  cent,  damages  on  the  principal.  2.  If  drawn  at  any 
place  out  of  the  State,  but  within  the  United  States,  damages 
at  the  rate  of  six  per  cent,  on  the  principal.  3.  If  drawn  by 
any  person  beyond  the  limits  of  the  United  States,  damages 
at  the  rate  of  ten  per  cent,  on  the  principal. 

In  addition  to  the  damages  above  mentioned,  the  holder 
recovers  in  all  cases  costs  of  protest,  and  interest  at  the  rate 
of  ten  per  cent,  on  the  principal  from  the  date  of  the  protest; 
and  has  a  right  of  action  against  the  acceptor  as  well  as  the 
indorser,  as  above  given,  i 

California.  The  rate  of  damages  to  be  allowed  and  paid 
upon  the  usual  protest  for  non-payment  of  bills  of  exchange, 
drawn  or  negotiated  within  this  State,  shall  be  as  follows : 
1st.  If  such  bill  shall  have  been  drawn  upon  any  person  or 
persons  in  any  of  the  United  States,  east  of  the  Rocky  Moun- 
tains, fifteen  dollars  upon  the  hundred  upon  the  principal 
sum  specified  in  such  bill;  2d.  If  such  bill  shall  have  been 
drawn  upon  any  person  or  persons  in  any  part  or  place  in 
Europe  or  in  any  foreign  country,  twenty  dollars  upon  the 
hundred  upon  the  principal  sum  specified  in  such  bill. 

1  English's  Digest  of  Laws  of  Arkansas,  216,  217,  published  in  1848. 


748  BILLS    OF   EXCHANGE  AND  PROMISSORY  NOTES. 

Such  damages  shall  be  in  lieu  of  interest,  charges  of  protest, 
and  all  other  charges  incurred  previous  to,  and  at  the  time  of 
giving  notice  of  non-payment;  but  the  holder  of  such  bill 
shall  be  entitled  to  demand  and  recover  lawful  interest  upon 
the  aggregate  amount  of  the  principal  sum  specified  in  such 
bill,  and  of  the  damages  thereon,  from  the  time  at  which 
notice  of  protest  for  non-payment  shall  have  been  given,  and 
payment  of  such  principal  sum  shall  have  been  demanded. 

When  drawn  for  an  amount  expressed  in  the  currency  of 
the  United  States,  the  sum  due  and  damages  thereon  are  to  be 
determined  without  any  reference  to  the  rate  of  exchange; 
but  when  drawn  for  an  amount  expressed  in  the  money  or 
currency  of  a  foreign  country,  the  amount  due  with  damages 
thereon  is  to  be  ascertained  by  the  rate  of  exchange  at  the  time 
of  the  demand  of  payment. 

The  same  damages  are  allowed  on  a  protest  for  non-accept- 
ance, to  be  in  lieu  of  interest,  charges  of  protest  and  all  other 
charges  previous  to  the  giving  of  notice  of  non-acceptance; 
but  after  that  the  holder  may  recover  interest  on  the  aggregate 
of  the  principal  sum  and  damages,  i 

Oregon.  In  this  territory,  damages  are  allowed  on  bills 
drawn  or  indorsed  here  and  payable  beyond  the  limits  of  the 
United  States  at  the  rate  of  ten  per  cent  in  addition  to  the 
current  rate  of  exchange,  together  with  interest  from  the  date 
of  the  protest  for  non-acceptance  or  non-payment.  On  bills 
drawn  on  other  territories  or  States  of  the  Union,  the  holder 
recovers  five  per  cent  damages  with  interest,  costs  and  charges 
of  protest.  2 

Minnesota.  On  bills  drawn  or  indorsed  within  the  territory, 
and  payable  without  the  limits  of  the  United  States,  the  party 
liable  pays  at  the  current  rate  of  exchange  at  the  time  of 
demand,  and  damages  at  the  rate  of  ten  per  cent,  upon  the 
contents,  with  interest  on  the  contents  from  the  date  of  pro- 

1  Compiled  Laws  of  California  of  1853,  p.  148. 

3  Statutes  of  Oregon,  531,  published  in  1855.  The  statute  of  Oregon,  in 
respect  to  notes  and  bills,  resembles  those  of  New-York.  It  was  passed  in 
1854. 


DAMAGES.  749 

test :  on  bills  drawn  upon  persons  in  any  other  territory  or 
State  of  the  United  States,  for  the  payment  of  money,  the 
drawer  and  indorser  are  liable  to  pay  the  contents,  with  legal 
interest,  and  five  per  cent,  damages,  with  costs  and  charges 
of  protest,  i  0 

Under  the  law  merchant  the  holder  of  a  dishonored  foreign 
bill  is  entitled  to  recover  against  the  drawer  or  indorser,  the 
principal  named  in  it,  together  with  interest  from  the  time 
when  it  ought  to  have  been  paid,  and  the  necessary  charges 
of  protest,  postage,  and  the  current  rate  of  exchange  at  the 
place  where  the  bill  was  payable,  on  the  place  where  it  was 
drawn  or  indorsed;  and  he  is  entitled  also  to  the  broker's 
commission,  and  all  other  necessary  expenses  on  a  new  bill, 
in  case  he  redraws,  to  reimburse  himself.  2 

Under  the  statutes  of  the  several  States,  the  holder  in  some 
cases  recovers  the  damages  and  expenses  allowed  by  the  law 
merchant,  with  a  certain  per  cent,  added,  so  as  to  make  a 
very  ample  compensation  for  the  delay  of  payment :  in  other 
cases  the  holder  recovers  very  nearly  the  same  amount  of 
damages,  given  by  the  common  law.  Considering  that  the 
damages  are  not  allowed  as  a  penalty,  but  as  a  reasonable  and 
fair  compensation  for  the  expense  of  remitting  funds  to  the 
place  of  payment,  the  commercial  rule  is  by  far  the  most 
equitable :  3  at  the  same  time  it  is  very  evident  that  a  fixed 
rule  is  the  most  convenient  in  practice,  since  it  generally  dis- 
penses with  the  necessity  of  proving  the  rate  of  exchange. 

The  want  of  a  uniform  rule  of  damages  through  the  seve- 
ral States,  and  the  inconveniences  arising  from  such  diverse 
legislation  on  the  subject,  have  been  frequently  urged  upon 
the  attention  of  Congress,  in  order  to  procure  the  passage  of  a 

1  Statutes  of  Minnesota,  154,  166. 

'  Kent's  Com.  161,  7th  ed;  Code  of  Commerce,  art.  181.  In  some  places 
the  new  bill  must  be  stamped  and  a  duty  paid  therefor ;  and  the  bill  must  be 
purchased,  which  is  generally  done  by  a  broker  for  a  commission. 

'Bangor  Bank  v.  Hook,  6  Greenl.,  174.    The  acceptor  having  paid  a  part 
of  the  bill,  the  damages  are  diminished  pru  rata  ;  see  Hargous  v.  Lahens,  8 
Sand.  R.,  213,  decided  on  the  same  principle,  but  holding  that  a  part  pay- 
ment made  by  the  acceptor  after  the  holder  has  remitted  funds  to  meet 
bill  at  the  place  of  payment,  does  not  diminish  the  damages  pro  rata. 


750  BILLS    OF  EXCHANGE  AND  PROMISSORY    NOTES. 

law  prescribing  the  damages  recoverable  on  bills,  drawn  in 
one  State  upon  another,  or  upon  foreign  countries;  and  it  has 
been  confidently  maintained  that  the  national  legislature, 
being  clothed  with  the  power  "  to  regulate  commerce  with 
foreign  nations,  and  among  tfce  several  States,"  is  fully  author- 
ized to  enact  laws  regulating  and  governing  bills  of  exchange, 
which  are  but  the  instruments  of  commerce.  1 

1  See  report  of  Mr.  Verplanck  to  the  House  of  Representatives,  on  the  sub- 
ject of  foreign  bills,  made  March  22,  1826;  3  Kent's  Com.,  159,  7th  ed. 

As  it  may  serve  for  reference  and  elucidation,  it  is  thought  advisable  to 
insert  in  the  following  pages  a  translation  of  that  part  of  the  French  Code  of 
Commerce  relating  to  bills  of  exchange  and  promissory  notes.  It  is  perhaps 
the  most  successful  effort  that  has  yet  been  made  in  the  work  of  codifying 
laws,  which  like  the  great  body  of  the  common  law,  lie  scattered  through 
many  books,  and  require  great  diligence  and  labor  to  bring  them  together  in 
the  form  of  a  symmetrical  treatise.  The  translation  is  not  new,  but  it  has  been 
carefully  compared  with  the  original  and  found  to  be  a  faithful  rendering  of 
the  text. 


BOOK  I.    TITLE  VJII. 

OF  THE  COMMERCIAL  CODE  OF   FRANCE OF  BILLS 

OF  EXCHANGE,  PROMISSORY  NOTES,  AND  LIMITA- 
TION OF  ACTIONS. 

SECTION  I.    OP  BILLS  OF  EXCHANGE. 
Sec.  1.     Of  the  Form  of  Bills  of  Exchange. 

Art.  110.  The  bill  of  exchange  is  drawn  from  one  place  on  another 
place; 

It  is  dated; 

It  specifies; 

The  sum  to  be  paid; 

The  name  of  the  person  who  is  to  pay  the  same, 

The  time  when,  and  the  place  where,  the  payment  is  to  be  made; 

The  value  furnished,  whether  in  money,  in  merchandise,  in  account,  or 
in  any  other  manner; 

It  is  drawn  to  the  order  of  a  third  person,  or  to  the  order  of  the  drawer 
himself ; 

If  drawn  in  sets  of  1,  2,  3,  4,  &c.,  it  is  so  expressed. 

Art.  111.  A  bill  of  exchange  may  be  drawn  upon  one  person,  and  pay- 
able at  the  domicil  of  a  third; 

It  may  be  drawn  by  the  order  and  for  the  account  of  a  third  person. 

Art.  112.  All  bills  of  exchange,  containing  a  fictitious  name,  quality, 
domicil,  place  where  drawn,  or  where  payable,  are  held  to  be  only  simple 
promises. 

Art.  113.  The  signature  of  a  married  or  single  woman,  not  a  sole  tra- 
der, to  a  bill  of  exchange,  is  equivalent,  with  respect  to  her,  only  to  a 
simple  promise. 

Art.  114.  Bills  of  exchange  signed  by  minors,  not  merchants,  are  void 
in  respect  to  them,  saving  the  rights  of  the  respective  parties,  conformably 
to  article  1312  of  the  Code  Napoleon,  a 

Sec.  2.     Of  Provision  for  Payment. 

Art.  115.  Provision  ought  to  be  made  by.  the  drawer,  or  by  the  person 
for  whose  account  the  bill  of  exchange  is  drawn;  but  the  drawer  does  not 
on  that  account  cease  to  be  personally  liable. 

a  The  article  referred  to  provide*  that  when  minor*,  interdicted  person*,  or  mnrned  women,  are 
admitted  in  the*e  qua! i tie*  to  plead  in  bar  to  their  engagement*,  the  reimbursement  of  any  money 
which  may  have  been  paid  to  their  nse,  during  their  minority,  interdiction  or  marriage,  cannot  be 
obtained,  unless  it  be  proved  tliut  the  sum*  paid  have  been  beneficial  to  them. 


752  BILLS  OF  EXCHANGE  AND   PROMISSORY   NOTES 

Art.  116.  There  has  been  provision,  if,  when  the  bill  of  exchange  be- 
comes due,  the  person  on  whom  it  is  drawn  is  indebted  to  the  drawer,  or 
to  the  person  on  whose  account  it  is  drawn,  in  a  sum  at  least  equal  to  the 
amount  of  the  bill  of  exchange. 

Art.  117.    The  acceptance  supposes  or  assumes  provision; 

It  is  proof  of  it  in  regard  to  the  indorsers; 

Whether  the  bill  be  accepted  or  not,  the  drawer  solely  is  bound  to  prove, 
in  case  of  denial,  that  those  on  whom  the  bill  was  drawn,  had  provision  at 
the  maturity  of  the  bill;  otherwise  he  is  held  responsible,  although  the 
protest  may  have  been  made  after  the  fixed  time. 

Sec.  3.     Of  the  Acceptance. 

Art.  118.  The  drawer  and  indorsers  of  a  bill  of  exchange,  are  joint  and 
several  sureties  for  the  acceptance  and  payment  of  the  bill  at  maturity. 

Art.  119.  The  refusal  of  acceptance  is  verified  by  an  act  which  is  called 
protest  for  non-acceptance. 

Art.  120.  On  the  notification  of  protest  for  non-acceptance,  the  indorsers 
and  the  drawer  are  respectively  bound  to  give  security  for  the  payment  of 
the  bill  when  due,  or  for  re-imbursement  with  expenses  of  protest  and  re- 
exchange. 

The  security,  whether  for  the  drawer  or  indorser,  is  a  joint  obligation 
only  with  the  person  for  whom  the  security  is  given. 

Art.  121.  He  who  accepts  a  bill  of  exchange,  contracts  an  obligation  to 
pay  the  amount  of  it. 

The  acceptor  is  not  released  from  his  acceptance,  even  though  the  drawer 
should  have  failed  without  his  knowledge  before  the  acceptance. 

Art.  122.    The  acceptance  of  a  bill  of  exchange  must  be  signed. 

It  is  expressed  by  the  word  accepted. 

It  is  dated,  if  the  bill  be  at  one  or  more  days  or  months  after  sight. 

And,  in  the  latter  case,  the  want  of  a  date  to  the  acceptance,  renders  the 
bill  payable  at  the  term  expressed  in  it,  counting  from  its  date. 

Art.  123.  The  acceptance  of  a  bill  of  exchange,  payable  in  another 
place  than  that  of  the  residence  of  the  acceptor,  must  indicate  the  domicil 
where  the  payment  is  to  be  made,  or  the  protest  in  case  of  non-payment. 

Art.  124.  The  acceptance  cannot  be  conditional;  but  it  may  be  limited 
in  regard  to  the  sum  accepted. 

In  this  case,  the  holder  is  bound  to  have  the  bill  protested  for  the  defi- 
ciency. 

Art.  125.  A  "bill  of  exchange  must  be  accepted  on  its  presentment,  or, 
at  the  latest,  within  twenty-four  hours  afterwards. 

After  twenty-four  hours  have  elapsed,  if  it  be  not  returned,  accepted  or 
not  accepted,  he  who  has  retained  it  is  liable  for  damages  towards  the 
holder. 

Sec.  4.     Of  Acceptance  supra  protest  or  by  intervention. 

Art.  126.  At  the  time  of  the  protest  for  non-acceptance,  the  bill  may  be 
accepted  by  a  third  person,  for  the  honor  of  the  drawer,  or  one  of  the  in- 
dorsers. 


COMMERCIAL    CODE  OF   FRANCE.  753 

The  acceptance  supra  ia  mentioned  in  the  protest  itself,  and  Is  signed  by 
the  acceptor. 

Art.  127.  The  acceptor  supra  protest  is  bound  to  notify  without  delay, 
his  acceptance  to  the  person  for  whose  honor  it  was  made. 

Art.  128.  The  holder  of  the  bill  retains  all  his  rights  against  the  drawer 
and  the  indorsers,  on  account  of  the  non-acceptance  by  the  person  on  whom 
the  bill  was  drawn,  notwithstanding  any  acceptance  supra  protest. 

Sec.  5.     Of  the  maturity  or  term  of  payment,  of  a  biU  of  exchange. 
Art.  129.    A  bill  of  exchange  may  be  drawn  payable  at  eight; 
At  one  or  more  days     } 

one  or  more  months  >  after  sight. 
one  or  more  usances  ) 
At  one  or  more  days     } 

one  or  more  months  >  after  date, 
one  or  more  usances  } 
On  a  day  fixed  or  determined. 
At  or  during  a  fair. 

Art.  130.  A  bill  of  exchange  drawn  at  sight  is  payable  on  its  present- 
ment. 

Art.  131.    The  maturity  of  a  bill  of  exchange, 
At  one  or  more  days      } 

one  or  more  months  >  after  [sight, 
one  or  more  usances  3 

Is  determined  by  the  date  of  the  acceptance,  or  by  that  of  the  protest  for 
non-acceptance . 

Art.  132.  The  usance  is  thirty  days,  which  run  from  the  day  after  the 
date  of  the  bill. 

The  months  are  according  to  the  regulation  of  the  Gregorian  calendar. 

Art.  133.  ,A  bill  of  exchange  payable  at  a  fair,  is  at  maturity  on  the 
evening  preceding  the  day  fixed  for  the  closure  of  the  fair,  or  the  day  of  the 
fair,  if  it  continue  only  one  day. 

Art.  134.  If  a  bill  of  exchange  fall  due  on  a  legal  holiday,  it  is  payable 
the  preceding  evening. 

Art.  135.  All  days  of  grace,  of  favor,  of  usage,  or  local  custom,  for  the 
payment  of  bills  of  exchange  are  abolished. 

Sec.  6.     Of  the  Indorsement. 

Art.  136.  The  property  in  a  bill  of  exchange  is  transfered  by  means  of 
indorsement. 

Art.  137.    The  indorsement  is  dated. 

It  expresses  the  value  received. 

It  mentions  the  name  of  the  person  to  whose  order  it  is  payable. 

Art.  138.  If  the  indorsement  be  not  conformable  to  the  regulations  of 
the  preceding  article,  it  does  not  affect  the  transfer  of  the  bill)  it  operates 
only  as  a  simple  power  of  attorney. 

Art.  139.  It  is  forbidden  to  antedate  the  indorsements,  under  the  penalty 
attached  to  forgery. 


754  BILLS  OF  EXCHANGE  AND   PROMISSORY  NOTES. 

Sec.  7.     Of  Liability. 

Art.  140.  All  those  who  have  signed,  accepted,  or  indorsed,  a  bill  of 
exchange,  are  jointly  and  severally  bound  as  sureties  to  the  holder. 

Sec.  8.     Of  the  Guaranty. 

Art.  141.  The  payment  of  a  bill  of  exchange,  independently  of  the 
acceptance  and  the  indorsement,  may  be  secured  by  a  written  guaranty. 

Art.  142.  This  guaranty  is  given  by  a  third  person,  on  the  bill  itself,  or 
in  a  separate  instrument  of  writing. 

The  person  thus  becoming  guarantee,  is  jointly  and  severally  bound  with 
the  drawers  and  indorsers,  saving  any  different  stipulations  between  the 
parties. 

Sec.  9.     Of  the  Payment. 

Art.  143.  A  bill  of  exchange  must  be  paid  in  the  kind  of  money  men- 
tioned in  it. 

Art.  144.  He  who  pays  a  bill  of  exchange  before  it  is  due  is  responsible 
for  the  validity  of  the  payment. 

Art.  145.  He  who  pays  a  bill  of  exchange  when  it  is  due,  and  without 
opposition,  or  notice  of  objection,  is  presumed  to  be  validly  discharged. 

Art.  146.  The  holder  of  a  bill  of  exchange  cannot  be  compelled  to  re- 
ceive payment  for  the  same  before  its  maturity. 

Art.  147.  The  payment  of  a  bill  of  exchange  made  on  the  presentment 
<?f  a  second,  third,  fourth,  &c.,  of  the  set,  is  valid,  when  the  second,  third, 
fourth,  &c.,  expresses  that  the  payment  of  one  renders  the  others  void. 

Art.  148.  He  who  pays  a  bill  of  exchange  on  the  presentment  of  a 
second,  third,  fourth,  &c.,  of  a  set,  without  retiring  that  on  which  his 
acceptance  is  written,  is  not  discharged  in  regard  to  third  persons  holding 
that  accepted  bill. 

Art.  149.  Objection  to  the  payment  of  a  bill  is  not  admitted,  except  in 
case  the  bill  be  lost,  or  the  holder  has  failed. 

Art.  150.  In  case  of  the  loss  of  a  bill  of  exchange  not  accepted,  he  to 
whom  it  belongs  may  prosecute  for  the  payment  on  a  second,  third,  fourth, 
&c. 

Art.  151.  If  the  bill  of  exchange  lost  be  accepted,  the  payment  of  it 
cannot  be  required  on  a  second,  third,  fourth,  &c.,  except  by  the  order  of 
the  judge,  and  on  giving  security. 

Art.  152.  If  he  who  has  lost  a  bill  of  exchange,  whether  accepted  or 
not,  cannot  present  a  second,  third,  fourth,  &c.,  of  the  set,  he  may  demand 
the  payment  of  the  bill  lost,  and  obtain  it,  by  order  of  a  judge,  on  proving 
his  property  therein  by  his  books,  and  giving  security. 

Art.  153.  In  case  of  refusal  of  payment,  on  a  demand  made,  in  virtue 
of  the  two  preceding  articles,  the  owner  of  a  bill  of  exchange  lost,  preserves 
all  his  rights  by  a  regular  protest. 

This  protest  must  be  made  the  next  day  after  the  bill  lost  became  due. 

It  must  be  notified  to  the  drawer  and  indorsers,  in  the  forms  and  within 
the  time  hereafter  prescribed  for  the  notice  of  protest. 


COMMERCIAL   CODE  OF   FRANCE.  755 

Art.  154.  The  owner  of  a  bill  of  exchange,  lost  or  mislaid,  must,  in 
order  to  procure  a  second,  apply  to  his  immediate  indorser,  who  is  bound 
to  lend  his  name  and  assistance  in  an  application  to  his  own  indorser,  and 
so  on,  ascending  from  indorser  to  indorser,  up  to  the  drawer  of  the  bill . 
The  owner  of  the  bill  lost  or  mislaid  must  bear  the  expense. 

Art.  155.  The  engagement  of  the  surety  mentioned  in  articles  151  and 
152  is  extinguished  after  the  lapse  of  three  years,  if  during  that  time  there 
has  been  neither  demand  nor  judicial  prosecution. 

Art.  156.  The  payments  made  on  account,  as  part  of  the  amount  of  a 
bill  of  exchange,  operate  in  discharge  of  the  drawer  and  indorsers. 

The  holder  is  bound  to  have  the  bill  protested  for  the  balance. 

Art.  157.  The  judges  cannot  grant  any  delay  for  the  payment  of  a  bill 
of  exchange. 

Sec.  10.     Of  payment  supra  protest,  or  by  intervention. 

Art.  158.  A  bill  of  exchange  protested  may  be  paid  by  any  intervening 
person,  for  the  honor  of  the  drawer,  or  one  of  the  indorsers. 

The  intervention  and  the  payment  must  be  stated  in  the  certificate  of 
protest,  or  at  the  bottom  of  it. 

Art.  159.  He  who  pays  a  bill  of  exchange  supra  protest,  is  substituted 
in  the  rights  of  the  holder,  and  bound  to  observe  the  same  formalities. 

If  the  payment  supra  protest,  be  made  for  the  account  of  the  drawer, 
all  the  indorsers  are  discharged.  It  it  be  made  for  an  indorser,  all  the  sub- 
sequent indorsers  are  discharged. 

If  there  be  a  concurrence  of  several  persons,  in  the  payment  of  a  bill  of 
exchange  supra  protest,  he  who  effects  the  most  towards  the  discharge  is 
preferred. 

If  he  on  whom  a  bill  was  originally  drawn,  and  against  whom  protest 
for  non-acceptance  has  been  made,  presents  himself  to  pay  it,  he  shall  be 
preferred  to  all  others. 

Sec.  11.     Of  the  Rights  and  Duties  of  the  Holder. 

Art.  160.  The  holder  of  a  bill  of  exchange  drawn  from  the  Continent 
and  the  European  Islands,  and  payable  in  the  European  possessions  of 
France,  whether  at  sight,  or  at  one  or  more  days,  months,  or  usances,  after 
sight,  must  demand  payment,  or  acceptance,  within  six  months  from  its 
date,  under  the  penalty  of  losing  his  remedy  against  the  indorsers,  and 
even  against  the  drawer,  if  the  latter  has  made  provision  for  the  payment 
of  the  bill  in  the  hands  of  the  drawee. 

A  delay  of  eight  months  is  allowed  for  the  presentment  of  a  bill  drawn 
from  the  parts  of  the  Levant,  and  northern  coasts  of  Africa,  on  the  Euro- 
pean possessions  of  France,  and  reciprocally,  from  the  continent  and  Euro- 
pean islands,  on  the  French  establishments  in  the  Levant,  and  northern 
coasts  of  Africa. 

A  year  is  allowed  for  the  presentment  of  bills  drawn  on  the  Western 
coasts  of  Africa  as  far  as,  and  including  the  Cape  of  Good  Hope. 


756  BILLS    OF  EXCHANGE   AND    PROMISSORY  NOTES. 

A  year  is  also  allowed  for  the  presentment  of  bills  of  exchange  drawn 
from  the  American  continent  and  West  India  islands,  on  the  European 
possessions  of  Prance,  and  reciprocally,  from  the  European  continent  and 
Islands,  on  the  French  possessions  or  establishments  on  the  Western  coasts 
of  Africa,  on  the  American  continent  and  West  India  islands. 

Two  years  are  allowed  for  the  presentment  of  bills  of  exchange  from  the 
East  India  continent  and  islands,  on  the  European  possessions  of  France, 
and  reciprocally  from  the  European  continent  and  islands,  on  the  French 
possessions  or  establishments  on  the  East  Indian  continent  and  islands. 

The  delays  above  mentioned,  of  eight  months,  one  year,  and  two  years, 
are  allowed  to  be  doubled  in  time  of  maritime  war. 

Art.  161.  The  holder  of  a  bill  of  exchange  must  demand  payment  on 
the  day  of  its  becoming  due. 

Art.  162.    The  refusal  of  payment  must  be  verified,  the  next  day  after 
it  became  due,  by  a  certificate,  which  is  called  a  protest  for  non-payment. 
If  this  day  be  a  legal  holyday,  the  protest  is  made  on  the  following  day. 
Art.  163.     The  holder  is  not  excused  from  making  the  protest  for  non- 
payment, neither  by  the  protest  for  non-acceptance,  nor  by  the  death  or 
failure  of  the  person  on  whom  the  bill  is  drawn. 

In  case  of  failure  of  the  acceptor,  before  the  bill  becomes  due,  the  holder 
may  cause  it  to  be  protested,  and  have  recourse  to  the  other  parties  on  the 
bill. 

Art.  164.    The  holder  of  a  bill  of  exchange  protested  for  non-payment, 
may  pursue  his  remedy  against  the  sureties, 
Either  individually  against  the  drawer  and  each  of  the  indorsers, 
Or  jointly  against  the  indorsers  and  drawer. 

The  same  right  exists  for  each  of  the  indoraers  in  regard  to  the  drawer, 
and  all  the  preceding  indorsers. 

Art.  165.  If  the  holder  would  pursue  his  remedy  individually  against 
his  immediate  indorser,  or  the  drawer,  in  case  the  bill  came  directly  from 
him,  he  must  give  him  notice  of  the  protest,  and  in  default  of  reimburse- 
ment, commence  his  suit  against  him  within  fifteen  days  from  the  date  of 
the  protest,  if  the  said  indorser  or  drawer  reside  within  the  distance  of  five 
myriametres,  (10  leagues,  equal  to  about  25  miles.) 

This  period  of  delay,  with  respect  to  the  indorser  or  drawer,  domiciled 
at  a  greater  distance  than  five  myriametres  from  the  place  where  the  bill  of 
exchange  was  payable,  shall  be  increased  one  day  for  every  two  and  a  half 
myriametres  exceeding  the  five  before  mentioned. 

Art.  166.  In  case  of  the  protest  of  bills  of  exchange  drawn  in  France, 
and  payable  out  of  the  continental  territory  of  France  in  Europe,  the 
remedy  against  the  drawers  and  indorsers  residing  in  France,  must  be  pur- 
sued within  the  following  periods,  to  wit  : 

Two  months  for  bills  payable  in  Corsica,  in  the  island  of  Elba,  or 
Capraja,  in  England,  and  in  the  countries  bordering  on  France. 
Four  months  for  those  payable  in  the  other  states  of  Europe. 


COMMERCIAL   CODE   OF    FRANCE. 


757 


Six  months  for  those  payable  in  the  ports  of  the  Levant  and  on  the 
northern  coasts  of  Africa. 

A  year  for  those  payable  on  the  western  coasts  of  Africa,  as  far  as,  and 
including  the  Cape  of  Good  Hope,  and  in  the  West  Indies. 

Two  years  for  those  payable  in  the  East  Indies. 

These  periods  of  delay  are  allowed  in  the  same  proportions,  for  pursuing 
the  remedy  against  the  drawers  and  indorsers  residing  in  the  French  pos- 
sessions situated  out  of  Europe. 

The  above  mentioned  delays,  of  six  months,  a  year,  and  two  years,  are 
allowed  to  be  doubled  in  time  of  maritime  war. 

Art.  167.  If  the  holder  pursue  his  remedy  against  the  indorsers  and 
drawer  jointly,  he  is  allowed,  with  respect  to  each  of  them,  the  period  of 
delay  determined  by  the  preceding  articles. 

Each  of  the  indorsers  has  the  right  of  pursuing  the  same  remedy,  either 
individually  or  jointly,  within  the  same  periods  of  delay. 

In  respect  to  them,  the  time  allowed  begins  to  run  from  the  day  after  the 
service  of  judicial  citation. 

Art.  168.    After  the  expiration  of  the  above  mentioned  periods  of  delay, 

For  the  presentment  of  a  bill  of  exchange  at  sight,  or  at  one  or  more 
days,  or  months,  or  usances,  after  sight, 

For  the  protest  for  non-payment, 

For  the  action  against  the  sureties, 

The  holder  of  a  bill  of  exchange  is  barred  of  all  rights  against  the  in- 
dorsers. 

Art.  169.  The  indorsers  are  equally  barred  from  all  remedy  against 
prior  indorsers,  after  the  expiration  of  the  above  periods  of  delay,  each  as 
it  respects  himself. 

Art.  170.  The  same  exception  to  the  right  of  action  of  the  holder  and 
the  indorsers  is  allowed  with  respect  to  the  drawer  himself,  if  the  latter 
prove  that  provision  was  made  for  the  payment  of  the  bill  at  its  maturity. 

The  holder  in  this  case  preserves  his  right  of  action  only  against  the  per- 
son on  whom  the  bill  was  drawn. 

Art.  171.  The  effect  of  the  exception  or  bar  to  the  right  of  action  pro- 
nounced in  the  three  preceding  articles,  ceases  in  favor  of  the  holder  against 
the  drawer,  or  against  any  of  the  indorsers  who,  after  the  expiration  of  the 
periods  of  delay  fixed  for  the  protest,  the  notice  of  protest,  or  the  com- 
mencement of  the  suit,  has  received  in  account,  as  set-off,  or  otherwise,  the 
funds  destined  for  the  payment  of  the  bill  of  exchange. 

Art.  172.    Independently  of  the  formalities  prescribed  for  pursuing  the 
remedy  against  the  sureties,  the  holder  of  a  bill  of  exchange  protested  for 
non-payment,  may,  by  obtaining  the  permission  of  the  judge,  attach  con- 
servatively the  personal  property  of  the  drawers,  acceptors  and  indorsers. 
See.  12.     Of  Protettt. 

Art.  173.  The  protest  for  non-acceptance,  or  non-payment,  is  made  by 
two  notaries,  or  by  one  notary  and  two  witnesses,  or  by  a  bailiff  and  two 


758  BILLS  OF    EXCHANGE  AND   PROMISSORY  NOTES. 

The  protest  must  be  made, 

At  the  domicil  of  the  person  on  whom  the  bill  was  drawn,  or  at  his  last 
known  place  of  residence; 

At  the  domicil  of  the  person  mentioned  in  the  bill  of  exchange,  who  is 
to  pay  it  in  case  of  need; 

At  the  domicil  of  the  acceptor  supra  protest. 

The  whole  is  a  single  instrument  of  writing. 

In  case  of  false  indication  of  domicil,  the  protest  is  preceded  by  a  certifi- 
cate of  perquisition  or  inquiry. 

Art.  174.     The  protest  contains, 

The  literal  copy  of  the  bill  of  exchange,  the  acceptance,  indorsements, 
and  directions  therein  mentioned; 

The  demand  of  payment  of  the  bill  of  exchange. 

It  declares  the  presence  or  absence  of  the  person  who  ought  to  pay  it. 

The  motives  of  refusing  payment,  and  the  inability  or  refusal  to  sign. 

Art.  175.  No  act  on  the  part  of  the  holder  of  the  bill  can  supply  the 
place  of  the  protest,  except  in  the  cases  provided  for  by  article  150,  and 
following,  concerning  the  loss  of  a  bill  of  exchange. 

Art.  176.  The  notaries  and  bailiffs  are  bound,  under  the  penalty  of  loss 
of  office,  and  of  costs  and  damages  to  the  parties,  to  take  an  exact  copy  of 
the  protests,  and  to  transcribe  them  at  length,  day  by  day,  and  in  the  order 
of  the  dates,  in  a  particular  register,  marked  and  certified,  and  kept  in  the 
forms  prescribed  for  books  of  record. 

Sec.  13.     Of  Re-exchange. 

Art.  177.    Re-exchange  results  from  the  act  of  re-drawing. 

Art.  178.  Re-drawing  is  when  the  holder  of  a  bill  protested,  draws 
another  bill  on  the  drawer,  or  one  or  more  of  the  indorsers,  of  the  former 
bill,  to  reimburse  himself  for  the  principal  of  the  bill  protested,  his  ex- 
penses, and  the  new  exchange  which  he  pays. 

Art.  179.  Re-exchange  is  regulated,  with  respect  to  the  drawer,  by  the 
current  rate  of  exchange  at  the  place  where  the  bill  was  payable,  on  the 
place  whence  it  was  drawn. 

It  is  regulated,  with  respect  to  the  indorsers,  by  the  rate  of  exchange  at 
the  place  where  the  bill  has  been  remitted  or  negotiated  by  them,  on  the 
place  where  the  reimbursement  is  to  be  effected. 

Art.  180.    The  bill  redrawn  is  accompanied  by  the  return  account. 

Art.  181.    The  return  account  contains, 

The  amount  of  the  bill  protested ; 

The  expenses  of  protest,  and  other  lawful  charges,  such  as  banker's  com- 
mission, brokerage,  stamp  duties,  and  postage  of  letters. 

It  mentions  the  name  of  the  person  on  whom  the  bill  for  re-imbursement 
is  drawn,  and  the  rate  of  exchange  at  which  it  is  negotiated. 

It  is  certified  by  an  exchange  agent. 

In  places  where  there  are  no  exchange  agentSj  it  is  certified  by  two  mer- 
chants. 


COMMERCIAL   CODE   OF   FRANCE. 


759 


It  is  accompanied  with  the  bill  of  exchange  protested,  the  protest,  or  a 
certified  copy  of  it. 

In  case  the  bill  for  reimbursement  be  drawn  on  one  of  the  indorsers,  it  is 
accompanied  besides  with  a  certificate  attesting1  the  course  of  exchange  at 
the  place  where  the  bill  protested  was  payable,  on  the  place  whence  it  was 
drawn. 

Art.  182.  There  can  be  made  only  one  return  account  on  the  same  bill 
of  exchange. 

This  return  account  is  reimbursed  from  indorser  to  indorser,  and  finally 
by  the  drawer. 

Art.  183.    The  re-exchanges  cannot  be  accumulated. 

Each  indorser,  as  well  as  the  drawer,  is  charged  with  only  one. 

Art.  184.  Interest  on  the  principal  of  the  bill  of  exchange  protested  for 
non-payment,  is  due  from  the  date  of  the  protest. 

Art.  185.  Interest  on  the  expenses  of  protest,  re-exchange,  and  other 
lawful  charges,  is  due  only  from  the  day  of  judicial  demand. 

Art.  186.  No  re-exchange  is  due,  if  the  return  account  be  not  accom- 
panied with  the  certificates  of  an  exchange  agent,  or  of  merchants,  as  pres- 
cribed in  article  181. 

SECTION  n.    OP  PKOMISSORT  NOTES. 

Art.  187.  All  the  provisions  relative  to  bills  of  exchange,  and  concern- 
ing, 

The  maturity  of  the  bill, 

The  indorsement, 

The  joint  and  several  responsibility, 

The  guaranty, 

The  payment, 

The  payment  supra  protest, 

The  protest, 

The  duties  and  rights  of  the  holder, 

The  re-exchange,  or  expenses, 

Are  applicable  to  promissory  notes  without  prejudice  to  the  regulations 
relative  to  the  cases  provided  for  by  articles  636,  637  and  638  of  title  2, 
book  IV. 

Art.  188.    Promissory  notes  are  dated. 

They  mention, 

The  sum  to  be  paid, 

The  name  of  the  person  to  whose  order  they  are  made, 

The  time  of  payment, 

The  value  received,  whether  in  money,  in  merchandise,  on  account  or  in 
any  other  manner. 

SECTION  III.    OP  LIMITATIONS  OF  ACTIONS. 

Art.  189.  All  actions  relative  to  bills  of  exchange  and  promissory  notes, 
signed  by  merchants,  traders  or  bankers,  or  for  commercial  transactions, 
are  limited  to  five  years,  counting  from  the  day  of  the  protest)  or  from  that 


760  BILLS   OF  EXCHANGE   AND   PROMISSORY  NOTES. 

of  the  last  judicial  proceeding,  if  there  has  been  no  judgment,  or  if  the 
debt  has  not  been  acknowledged  by  a  separate  instrument  in  writing. 

Nevertheless,  persons  presumed  to  be  debtors  shall  be  bound,  if  required, 
to  declare  under  oath,  that  they  are  no  longer  indebted;  and  their  widows, 
heirs  or  assigns,  that  they  verily  believe  that  nothing  remains  due. 


INDEX. 


THE  REFERENCES  ARE  TO  THE  PAGES. 

A. 

PAGE. 

ABSCONDING,  by  maker  of  a  note,  demand, 159,  160 

by  the  drawee  of  a  bill, 381 

presentment  where  maker  or  acceptor  has  absconded, . .  484-486 
diligence  to  find,  sufficient,  when, 648-649 

ABSENCE,  of  maker  of  note  from  the  state, 159,  160,  485 

or  from  his  residence, 159,  160 

in  a  case  of  guaranty, : 236,  237 

ACCEPTANCE,  when  qualified,  effect  of, 142-145,  383,  428 

contract  of, 405 

duty  of  drawee  to  accept, 405,  406 

of  checks  by  certifying  them, 406 

•when  a  written  promise  is  an, 407,  408 

by  parol,  when  may  be, 409 

by  a  written  promise, 409 

statutes  of  New-York  on  the  subject, 409,  410 

design  and  requirements  of, 410-415 

authority  to  draw  by  letter,  an  acceptance  when 413,  414 

collateral  acceptances, 407,  413,  414,  415 

an  agreement  to  accept, 414,  415 

what  drafts  deemed  accepted, 416 

destruction  of  bill  by  drawee,  or  refusal  to  return,  268,  417,  418 

general  acceptance, 418 

what  it  admits, 433 

effect  of  conditional  acceptances, 419-421 

acceptance  how  construed, 421,  422 

of  bills  drawn  against  consignments  of  goods, 422-424 

not  to  be  varied  by  parol, 424,  425 

when  may  be  so  varied, 426 

to  pay  at  another  place,  effect  of, 426,  427 

rule  of  pleading,  where  bills  and  notes  are  payable  at  a  par- 
ticular place, 427,  428 

46 


762  -  INDEX. 

FA6Z. 

ACCEPTANCE,  (Continued.) 

taking  qualified  acceptance,  effect  of  on  indorser  and  drawer, 

428-430 

acceptor  primarily  liable,  like  maker  of  a  note, 430-432 

must  pay  the  party  having  the  title, 432-434 

acceptance  completed  by  delivery, 434 

cancelling  by  mistake, 434 

how  waived,  and  how  released, 435-437 

alteration  of  and  its  effect, 438 

ACCEPTANCE  SUPRA  PROTEST,  for  honor, 438^44 

nature  of  the  contract, 438 

for  the  honor  of  an  indorser, 438,  439 

for  the  honor  of  the  drawer, 439 

what  party  paying  for  honor  must  shew, 439 

action  against  acceptor  for  honor, 439,  440 

acceptance  for  the  honor  of  all  the  parties, 440,  441 

duty  of  acceptor  to  notify, 441 

demand  must  be  made  on  the  drawee, 441,  442 

holder  not  obliged  to  take, 443 

his  duty  if  he  does  take, 443 

ACCOMMODATION  BILLS  AND  NOTES. 

want  of  consideration  in,  between  what  parties, 315-324 

maker  of  accommodation  notes, 315,  316 

acceptor  of  accommodation  bills, 315,  316-320 

indorser  of. 316-320 

consideration  of 373-377 

acceptor,  when  liable  in  case  of  diversion, 431,  432 

delivered  on  usurious  contracts, 352 

bona  fide  purchaser  of, 370 

accommodated  drawer  or  indorser  not  entitled  to  notice,  453, 

454,  638 

payment  by  acceptor  of,  its  effect, 532,  533 

defence,  how  alleged  and  proved, 678,  679,  688 

ACCIDENT  unavoidable,  excuses  demand,  when, 484,  486 

must  be  such  as  to  prevent  demand, 492,  493 

ACCORD  and  satisfaction,  what  is  not, 579 

what  is  an,  and  when  executory, 580 

ACCOUNT,  directions  in  relation  to,  in  bill, 172 

ACKNOWLEDGMENT  of  liability,  an  admission  of  notice,  when, 

653-655 
must  be  unequivocal, 654,  655 

ACTION  ON  A  BILL  OR  NOTE,  by  owner, 251 

by  trustee,  when, 252,  669 

by  whom, 293,  664-668 

on  accommodation  paper  by  parties  to, 315-324 


INDEX.  763 

PAGE. 

ACTION  ON  A  BILL  OR  NOTE,  (Continued.) 

party  accommodated  has  no  action  on, 315-324 

nor  in  general  has  the  party  accommodating, 373-376 

by  payee, 659,  665 

against  acceptor, 672,  673 

against  drawer  or  indorser, 674-676 

by  an  indorsee, 678 

ADDRESS,  in  a  bill  of  exchange, 173,  174,  381 

in  case  of  need, 175 

presentment  according  to, 380,  381,  479-482,  496-499 

ADMINISTRATORS  AND  EXECUTORS,  as  parties  to  notes  or 

bills, 78-80 

indorsement  by, 247 

ADMISSIONS  OF  LIABILITY  by  drawer  or  indorser, 654,  655 

ADVERTISEMENT,  of  lost  note  or  bill, 308-310 

of  dissolution  of  partnership, 113-117 

ADVICE,  words  of, 172 

AGENT,  no  one  is  presumed  to  act  as, 80 

should  sign  as  agent, 81-83 

rule  as  to  negotiable  paper, 82-84 

general  agent, 87-88 

must  follow  his  authority, 84-87 

bis  appointment , > • 85-87 

agency  supposed  to  continue, 89 

liable  if  he  does  not  bind  his  principal, 90 

who  may  act  as  such, 95,  96-103 

revocation  of  authority, 113-115 

partners  bind  each  other  as, 96-103 

when  acting  apparently  for  the  firm, 99,  100 

but  when  known  to  be  acting  personally, 101 

scope  of  the  business, 102 

AGENCY,  created  by  restrictive  indorsement, 253 

AGREEMENT,  waiving  protest, 633-635 

to  retire  a  bill,  how  construed, 534 

ALIEN,  contracts  with  in  time  of  war  void, 338 

ALIEN  ENEMY,  contracts  with,  void, 72-74 

exceptions  to  the  rule, 74 

ALLONGE,  what  is 267 

ALTERATION  of  a  bill  or  note  avoids  it, 95 

immaterial  when, 94,     95 

material  when, 145,  146,  682 

by  adding  new  name  to  joint  note, 681,  682 

ALTERNATIVE,  a  promise  to  pay  or  do  some  other  act 138,  139 

is  not  a  negotiable  note, 138 


764  INDEX. 

TAOE. 

AMBIGUITY,  in  the  form  of  instrument,  effect  of, 174 

ANALOGY  between  note  and  bill, 390,  391 

ANSWER,  allegations  in, 678 

APPROPRIATION  OF  PAYMENTS, 554-565 

in  the  case  of  accommodation  bills, 564-567 

ASSIGNEE  of  negotiable  paper,  his  rights, 286,  287 

does  not  possess  rights  of  bona  fide  purchaser, 286 

ASSIGNMENT,  of  choses  in  action, 55,     56 

of  bills  and  negotiable  notes, 245 

AT  SIGHT,  drafts  drawn  at,  or  after,  must  be  presented, 386-388 

analogy  between  drafts,  and  notes  on  demand, 390,  391 

laches  in  presenting, 389-395 

ATTESTING  WITNESS,  must  be  called, 175,  176 

proving  instrument  by, 701-703 

ATTORNEY  in  possession  of  note  may  demand  payment, 628,  629 

and  give  notice  of  dishonor, 629 

ATTORNEY,  POWER  OF,  how  construed, 84-87 

AU  BESOIN,  meaning  and  effect  of, 175 

AUTHORITY,  of  an  agent,  how  construed, 84-88 

parties  contracting  with  agent,  must  examine  his  power,  85  -  87 

of  a  partner,  revoked  by  dissolution, 111-113 

of  a  general  and  special  agent, 84-89 

special,  how  construed, 84-86 

by  general  power  of  attorney,  construction  of, 86,     87 

when  implied,  or  proved  by  circumstances, 87-89 

B. 

BANKS  AND  BANKING  ASSOCIATIONS,  as  parties, 75-77 

no  power  to  issue  time  notes  or  bills, 347-349 

BANK  NOTES,  are  promissory  notes, 59,     60 

and  treated  the  same  as  any  other  notes, 481 

severed  for  transmission  by  mail, 482 

BANK  CHECKS,  are  drafts  or  bills  of  exchange, 57 

always  payable  on  demand, 58,     59 

accepted,  when  and  how, 406 

should  be  presented,  when, 396-398 

BANKRUPTCY  of  maker  or  drawee,  no  excuse  for  not  presenting 

for  payment, 486-488 

BARON  AND  FEME,  see  married  woman, 68-72 

BEGINNING,  right  of  at  the  trial, 687 

BEARER,  who  is  bearer  in  law, 130-132 

BETTER  SECURITY,  protesting  for  better  security, 

BILLS  OF  EXCHANGE,  definition  of, 41 

use  and  origin  and  theory  of, 42-46 

are  foreign  and  inland, 47 


INDEX.  "66 

PA««. 

BILLS  OF  EXCHANGE  (Continued). 

when  foreign, 47-50 

foreign  bills  must  be  protested, 50,  58 1-583,  401 

are  usually  drawn  in  parts, 161-164 

inland  bills  came  into  use,  when, 50,     51 

essential  qualities  and  parts  of, 124-176 

fictitious  parties  to, 125-130 

how  made, 133,  134 

must  be  payable  in  money, 134-138 

must  be  for  payment  of  money  only, 138,  139 

how  framed  when  drawn  in  several  parts, 161,  162 

action  on  the  part  dishonored, 162,  163 

transferable  under  custom  of  merchants, 245 

bills  void  for  usury, 349-367 

BILL-BROKER,  sale  of  bills  by,  and  liability  on  sale, 291 

the  sale  warrants  existence  and  legality  of  bill, 289 

BLANK  BILLS,  may  be  filled  up, 94,     95 

BLANK  INDORSEMENT, 92,    93 

what  is  and  use  of, 267-276 

misuse  of  not  forgery, 94 

BLANK  ACCEPTANCES,  bind  acceptor, 411 

BONDS,  when  negotiable, 60-61 

BRANCH  BANKS,  indorsement  from  one  to  another, 622,  623 

BROKER,  sale  of  bills  by,  incidents  of, 289,  291 

BURDEN  of  proof, 686-691 

in  respect  to  partnership  paper, 100-104,  105 

c. 

CALENDAR  MONTH,  time  computed  by, 512,  513 

CANCELLING    indorsements,... 275-277 

acceptances  by  mistake, 434 

by  agreement  and  release, 435-437 

CAPACITY  of  parties  to  a  bill  or  note, 62-72 

to  transfer, 245-250 

asserted   by  transfer, 289-291 

CERTIFICATE  OF  DEPOSIT,  is  a  promissory  note, 348 

cannot  be  issued  by  a  bank  payable  on  time, 348 

CHATTELS,  warranty  of  title  to, 188 

CHECKS,  what  are, 396.  57,  58 

to   be   presented,  when 396-398 

acceptance  of  by  banks, 406 

CHRISTMAS  DAY,  not  counted  as  a  day  of  business, 529-532 

CLERK,  not  authorized  to  sign  notes, 88 

may  in  certain  cases, 88-89 

COLLATERAL  SECURITY,  delivering  notes  and  bills  as,  for  usu- 
rious debt, 354 

general  owner  may  give  notice  of  dishonor, 628 


766  INDEX. 

PAGE, 

COLLATERAL  contracts  and  memorandums,.. . ..............  145-148 

COLLECTING  AGENT,  duty  and  liability  of,.  .460,  402-404,  475,  476 

COMMERCIAL  CODE  of  France, 751-760 

COMPARISON  OF  HANDWRITING,  when  permitted, 705-707 

COMPOSITION    WITH    CREDITORS,    notes    giving    a    prefer- 
ence,   345,  345 

when  void, 345 

COMPOUNDING  with  maker  or  acceptor,  effect  of, 575 

CONDITION,  annexed  to  acceptance, 419-421,  424 

if  verbal,  cannot  be  proved, . 424-425 

CONSIGNMENTS,  drafts  drawn  on, 422-424 

drafts  with  bill  of  lading  attached, 421-424 

CONTRACT,  what  is, 62 

illegal,  cannot  be  enforced, 336 

CONSIDERATION,  of  bills  and  notes  implied, 56,  78,  315 

in  the  inception  of  the  paper, 186-189 

pleaded  and  proved,  when, 209-217 

chapter   on  consideration, 311-377 

may  be  inquired  into,  between  what  parties, ..  56,  57,  311,  312 

presumptions  in  favor  of  negotiable  paper, 312,  313 

WANT  OF  CONSIDERATION, 315-327 

accommodation  paper, 315-324 

in  notes  executed  as  a  gift, 324,  325 

in  notes  etc.,  given  for  a  thing  of  no  value, 326,  327 

FAILURE  OF  CONSIDERATION, 328-336 

entire  failure  of,  instances, 328-333,  335 

partial  failure, 333-335 

may  be  shewn  in  reduction  of  damages, 333,  334,  335 

ILLEGALITY  OP  CONSIDERATION, 336-377 

general  principle, 336 

when  illegality  may  be  shewn, 337 

contracts  with  public  enemy, 333 

immoral  contracts, 339    349 

merely  illegal, 340 

wagers,  contracts  of, 341 

in  restraint  of  marriage  and  trade, 342—344 

conspiracy  against  commerce,  etc., 344 

to  prevent  competition  at  an  auction  or  sheriff's  sale, 344 

giving  preference  in  composition  with  creditors, 345 

inducements  to  permit  a  discharge  of  debtors, 346 

notes  and  bills  given  and  taken  illegally, 347-349 

the  restraining  act, 347-349 

notes  and  bills  illegal  because  usurious, 349-367 

notes  and  bills  illegal  by  statute, 367-370 

of  accommodation  paper, 373-377 


INDEX.  767 

PAO*. 

CONSTRUCTION  of  bills  and  notes, 176-186 

must  be  by  the  law  of  the  place, 177,  178 

remedy  by  law  of  the  forum, 179,  180 

when  contract  to  be  performed  in  another  state, 180-184 

of  acceptances, 421,  422 

CONTINGENCY,  cannot  be  supplied  by  parol  evidence, 313-315 

CONTRACTING  CAPACITY,  what  constitutes, 62-72,  75-78 

non-sane  persons  have  not, 63 

infants  have, 64-68 

CONTRACTS,  requisites  of, 62 

when  illegal, 336-377 

notes  and  bills  founded  on,  rule  as  to, 337,  370 

declared  void  by  statute,  see  usury,  wagering  contracts,  etc. 

CONTRApICTION  of  written  contract, 313-315 

of  acceptances  by  parol, 424,  425 

CONTRIBUTION,  between  sureties  and  joint  makers, 572,  573 

CO-PARTNERSHIP,  see  partnership, 96-99 

COPY  note  may  be  used  in  making  demand,  when, 506-508 

CORPORATIONS, 

right  to  make  and  negotiate  bills  and  notes, ....  75  -  78,  347-349 

cannot  make  or  issue  time  notes  or  bills, 75  -  77,  347-349 

transfer  of  an  illegal  note  made  by,  effect  of, 347,  348 

to  a  person  out  of  the  state, 348 

COVERTURE,  see  married  women. 

COUNTERFEIT  and  valueless  bank  notes,  payment  of, 205-207 

COUNTERMAND  of  payment,  effect  of, 546 

CREDITOR,  taking  notes  or  bills  in  payment, 192-207 

CREDIT,  giving  in  account,  effect  of, 560-563 

operates  as  payment,  when, 560-562 

CROSS  BILLS,  are  consideration  for  each  other, 322 

CURRENCY,  judgments  must  be  entered  in  our, 137,  138 

CUSTOM  OF  MERCHANTS,  foundation  of  commercial  law, 46 

indorsement  of  bills, 245 

CUSTOMER,  notice  to  on  dissolution  of  firm, 114-116 

who  are  customers, 116,  117 

D. 

DAMAGES,  or  sum  recoverable 708-749 

interest  usual  measure  of  damages, 708 

interest  secured  by  contract,  when, 708-710-719 

recoverable  as  damages,  when, 711-722 

interest  by  contract  below  legal  rate,  after  due, 711-713 

on  notes,  etc.,  payable  on  demand, 712,  713 

on  money  due, 713,  714 

on  notes  and  debts  made  in  one  state  payable  in  another, .  714-718 
rates  of  interest  in  the  different  states, 714-719 


768  INDEX. 

PA6B. 

DAMAGES  (Continued). 

interest  as  damages  on  note3  and  debts  payable  in  another 

state, 719-722 

damages  on  notes  payable  in  specific  articles, 723-725 

sum  recoverable  on  a  note  pay  able  in  another  currency,.  725,  726 

on  debts  and  notes  payable  in  another  country, 725-728 

rate  of  exchange  on  not  allowed, 726-729 

on  bills  of  exchange,  under  law-merchant, 730-734 

under  the  statutes  of  the  several  states, 734-749 

a  general  rule  desirable, 749,  750 

DATE,  of  bills  and  notes, 150-152,  187 

not  essential, 150 

importance  of,  when  used, 151,  1 87 

essential  under  law  of  France, 751 

DAYS  OF  GRACE,  number  allowed, 517-525 

form  part  of  time  bills  and  notes  have  to  run, 525 

expire  at  what  time, 526-528 

Sundays  and  holidays, 529-532 

DEATH,  of  maker  or  acceptor,  effect  of, 486-488 

of  drawer  or  indorser, 454,  630,  631 

DEBT,  action  of  formerly  brought,  when, „..  665,  666 

recovery  under  money  counts, 665 

DELAY,  in  presenting  for  acceptance,  when  excused, 391-399 

in  giving  the  usual  notice,  when  excused, 649 

diligence  equivalent  to  notice, 648 

DELEGATION  of  authoriry  by  notary, 586 

DELIVERY,  necessary  part  of  the  contract, 186-192 

contract  made  at  place  of, 187 

will  be  inferred, 188 

implies  a  guaranty  of  title,  when,   188-192 

DEMAND,  notes  and  drafts  payable  on, 156 

when  must  be  made, 156-160 

exceptions  to  the  rule, 158,  160 

DEMAND  OF  PAYMENT,  see  presentment  for  payment, 479-532 

DEPOSIT,  certificate  of  is  a  promissory  note, 348 

DESTRUCTION,  see  loss  of  bills  and  notes. 

DIVERSION  of  accommodation  paper, 316-324,  431 

plea  of  by  an  accommodation  indorser, 579,  580 

DILIGENCE  in  presenting  bill  for  acceptance, 386-399 

in  presenting  note  for  payment, 390,  483-486 

a  question  of  law,  when, 391 

equivalent  to  notice,  when, 648 

DIRECTION,  to  apply  to  a  particular  account, 143,  144 

in  case  of  need, 175 

DIRECTOR,  of  a  bank  not  a  general  agent, 116 


INDEX.  769 

PAOK. 

DISCHARGE,  of  maker  or  acceptor,  releases  drawer  and  indorser,.  294 

by  giving  principal  time, 567-569 

of  prior  parties, 569 

discharges  sureties, 572 

discharging  one  of  several  joint  debtors, 573-575 

DISCOUNTING  paper  at  usurious  rates, 352-354 

what  are  such, 360-362 

DISHONOR,  by  non-acceptance,  see  procedingson,  and  notice  of  dishonor. 

DISSOLUTION,  of  partnership, Ill,  113 

right  of  partner  to  dissolve, Ill,  112 

notice  of,  when  necessary, 113-117 

how  made,  its  incidents, 112-123 

a  revocation  of  each  partner's  right  to  bind  the  firm,  111,  113-123 

DORMANT  PARTNER  bound  by  acts  of  the  firm, 107,  109 

see  special  partner, 107,  109 

DONATION,  see  gift, 324,  325 

DRAWEE,  effect  of  his  absconding  or  absence, 381 

destruction  or  refusal  to  return  bill  by,  effect  of, .  268,  417,  418 

duty  of  drawee  to  accept, 405 

his  acceptance, 405—438 

duty  to  accept  draft  with  bill  of  lading  attached, 422-424 

DRAWER,  signing  draft  as  surety, 375,  376 

contract  of  drawer, 378-386 

signing  as  agent,  when  bound  personally, 378 

the  implied  contract, 378,  379 

a  draft  for  the  whole  of  a  given  fund,  effect  of, 379,  380 

stipulation  as  to  residence  of  drawee, 380,  381 

that  drawee  is  capable  of  binding  himself,  &c., 381,  382 

that  he  will  accept,  absolutely, 382-384 

governed  by  the  lex  loci, 384 

discharged  by  laches,  when, 384,  385 

contract,  how  discharged  and  by  what  law, 385,  386 

DRAWING  BILL,  what  it  implies, 378,  379-386 

drawing  for  the  whole  of  a  fund,  an  equitable  assignment,  378,  379 

DRUNKENNESS,  incapacitates  a  party  to  contract, 325 

defence,  how  pleaded,  note, 689 

DURESS,  note  given  under,  void, 325 

DUE-BILL,  is  a  promissory  note, 132 

E. 

EFFECTS,  want  of,  excuses  presentment, 449-452,  490,  491 

want  of  in  case  of  a  check, 396-398 

want  of,  excuses  want  of  notice,  when, 449-452,  640-646 

pleading  want  of, 646,  647 


770  INDEX. 

PAGE. 

ENTRIES,  by  notary  &c.  when  evidence, 695,  697 

EQUITY,  remedy  in  on  lost  bill  or  note, 295-303 

notes  and  bills  held  in  trust, 256,  257 

ERASURES,  see  alteration. 

ESTOPPEL,  case  of,   655,  250,  353 

vendor  of  illegal  paper  estopped,  when, 347,  348 

tranfer  of  paper, 188-191 

party  transferring,  admits  what, 289-291,  250 

acceptance  admits  drawing, 683 

EVIDENCE,  of  title  to  negotiable  paper,  in  respect  to  partner- 
ship paper, 104,  105 

to  paper  not  negotiable, '. 216,  217 

varying  terms  of  notes  and  bills  cannot  be  given, 313-315 

when  pleadings  show  what  must  be  proved, 679,  680 

averments  immaterial  need  not  be  proved, 680 

proof  in  action  by  payee  against  maker  or  acceptor, 680 

against  a  firm,  proof  of  assent,  when  necessary, 681 

on  a  note  or  bill  given  or  accepted  by  an  agent, 681 

in  action  on  a  joint  and  several  note, 681,  682 

proving  a  note  that  has  been  altered,  effect, 681-683 

accepting  admits  drawing, 683 

in  suit  by  indorsee  against  acceptor,  proof, 683-685 

payee's  indorsement  must  be  proved,  when, 683,  684 

plaintiffs  suing  as  partners  must  prove  partnership, 685 

misnomer  of  payee,  effect  of, 685 

in  an  action  against  indorser,  proof, 685 

proof  of  consideration,  when  necessary, 686-692 

who  must  begin, » 687-691 

proof  showing  right  to  introduce  defence, 688-691 

further  proof  on  the  merits, 691 ,  692 

proving  counterclaim  or  set-off, 692 

proof  against  drawer  or  indorser,  of  demand  and  notice,  692-694 

the  same  in  respect  to  foreign  bills, 694,  695 

notice  to  drawer  or  indorser,  how  proved, 695-697 

by  memorandum  of  deceased  witness, 695-697 

proof  of  contents  of  notice, 697 

mode  of  proving  notice,  as  to  time,  &c., 698,  699 

who  may  be  called  as  witness,  and  when, 699,  700 

proving  signature  or  handwriting, 701-707 

by  subscribing  witness, 701-703 

who  qualified  to  prove  handwriting, 703-706 

comparison  of  hands  by  experts, 704-707 

EXCH  &NGE  of  notes  and  acceptances, 322 

EXCHANGE,  on  notes  and  debts  not  allowed, 725-729 

rate  of  when  allowed  on  bills  of, 730-734 

rule  under  law  merchant, , 730-733 


771 


murx. 


EXCHANGE  (Continued). 

under  statutes  of  the  different  States,  ................  734-750 

want  of  uniform  rule,  ..................................  749 

EXECUTION,  of  bills  and  notes,  Ac.,  in  pencil,  by  mark,  Ac.,  .....     91 

parties  may  so  execute  or  indorse  notes  and  bills,  .....  150,  251 

delivery  essential  to  complete,  ......................  186-192 

must  be  alleged,  .......................................  671 

EXECUTORS  AND  ADMINISTRATORS,  notes  and  drafts  by,  78-80 
notes  by,  evidence  of  assets,  ...........................  .     78 

cannot  bind  estate  by  acceptance,  ........................     78 

liable  thereon  personally,  when,  .....................  79, 

are  one  person  in  law  ...........................  ....  79, 

transfer  of  bills  and  notes  by,  .......................  247-249 

effect  of  appointing  maker  or  acceptor  an  executor,  .......     553 

EXPENSES,  of  giving  notice  of  dishonor,  .......................  607 

of  redrawing,  when  allowed,.  .  .  .........................  732 

F. 

FACTOR,  a  trustee  of  express  trust,  ........................  252,  658 

when  may  transfer  title,  .................  .  ..............  252 

FAST-DAY,  see  holiday. 

FATAER  OR  SON,  note  to,  both  of  same  name,  .................  125 

presumption  as  to  title,  .................................  125 

FEME  COVERT,  see  married  woman. 

FELONY,  misuse  of  blank  indorsements  is  not,  .............  «  .....     94 

FESTIVAL  DAYS,  see  holidays,  notice  need  not  be  given  on,649,  529-532 

FAILURE  OF  CONSIDERATION,  ..........................  328-336 

entire  failure  of,  instances,  ......................  328-333,  335 

partial  failure,  .....................................  333-335 

may  be  shewn  in  reduction  of  damages,.  .  .  ...........  333,  334 

FAIRS,  notes  arid  bills  payable  at,  .......................  .  ......  142 

come  to  maturity,  when,  by  French  law,  .................  753 

FICTITIOUS  PAYEE,  or  other  party,  ......................   125-130 

FIGURES  and  marks  used  instead  of  party's  name,  .......  91,  150,  251 

FORBEARANCE,  consideration  for  valid  promise,  ................  223 

voluntary,  does  not  discharge  sureties,  etc.,  ......  291-293,  294 

FOREIGN  BILLS,  what  are,  ........................  47-50,  582,  583 

presentment  of  for  acceptance,  etc.,  ..................  388-395 

should  be  protested,  ..........................  461,  462,  581 

damages  on,  .......................................  730-734 

construction,  by  what  law,  .........................  176-186 

FOREIGN  LAWS,  must  be  proved,  .............................    49 

need  not  be  taken  notice  of,  .............................  348 

when  to  be  considered  as  fixing  rights  of  parties,  ......  177-185 


772  INDEX, 

PAGE. 

FOREIGN  MONEY,  notes  and  bills  payable  in, ., 137,  138,  726 

allegations  in  suits  on, 728,  729 

FORGERY,  of  payee's  name, 188-190 

no  title  through  a  forged  indorsement, 190 

transfer  of  forged  paper, 289-291 

FORMS  AND  REQUISITES  of  negotiable  paper, 124-175 

must  not  be  payable  on  a  contingency, . 125 

fictitious  payee  and  other  parties, 125-130 

must  be  executed, 133,  134 

must  be  payable  in  money, 134-138 

and  not  for  the  performance  of  some  other  act, . . .....  138,  139 

*•  must  be  for  a  sum  certain, 140 

must  not  depend  on  an  uncertain  event, 141,  142 

must  not  be  payable  out  of  particular  fund, 142-145 

acceptance  must  be  absolute, 144,  145 

parts,  etc.,  must  be  in  writing, 149,  150 

dating  and  superscription  in  the  margin, 152,  153 

time  and  place  of  payment,. 153-160 

order  to  pay, 160 

bills  drawn  in  parts,. 161-164 

words  of  negotiability, , .  164-168 

sums  payable,  value  received, 168-172 

words  of  advice,. , 172 

address  of  bills, 173-175 

FRAUD,  vitiates  all  contracts, 325,  326 

between  whom  may  be  shewn, 325 

rescinding  for,  must  be  done  promptly, 326 

FRAUDS,  see  statute  of, 222-240 

FUND,  drafts  payable  out  of,  not  negotiable, 142-145 

effect  of  the  contract, 419-422 

G. 

GAMING  CONSIDERATION,  illegal, 341,  367-370 

GIFT,  notes  made  as  are  void, 324,  325 

notes  of  a  third  person  may  be  supported  as, 325 

GIVING  TIME  to  principal,  discharges  drawer  and  indorser, . .  291-295 

and  all  sureties, 355 

must  be  by  valid  agreement  to  operate  as  discharge, . . .  565-575 

GOOD  FRIDAY,  see  days  of  grace. 

GOODS  SOLD,  on  warranty, 329,  330 

one  thing  for  another,. » 329-332 

fraudulently, 326,  329-333 

GOVERNMENT  AGENTS,  not  liable  personally, 90 

GRACE,  see  days  of, 517-532 


IlfDET.  773 

PACK. 

GUARANTY,  contract  of, 218-244 

is  not  negotiable, 219,  220 

a  new  note  when, 220-222 

when  must  be  in  writing, 222-232 

Brewster  v.  Silence, 225,  226 

an  original  contract,  when, -.  224,  225,  229-232 

when  implied, 230 

of  payment, 233,  234 

of  collection, 234-238 

agreement  to  guaranty, ~ 239,  240 

notice  to  guarrantor, 241-244 

an  indorser  when  a  guarantor,  273,  274 

H. 

HALF  NOTES,  or  notes  severed  for  transmission, 307-309 

half  note  and  half  bill, 174 

HANDWRITING,  how  proved, 703-707 

proof  of  instrument  by  attesting  witness, 701-703 

HOLDER,  BONA  FIDE,  see  purchaser, 371-373 

who  is  such, 316-318 

presumptions  in  respect  to  negotiable  notes  and  bills,.  312,  313 
when  made  for  one  purpose  and  diverted  to  another,. . .  316-323 
what  is  giving  value  for  paper, 320-322 

HOLIDAYS,  what  are  such, 529-532 

HONOR,  acceptance  and  payment  for  honor, 438-444 

nature  of  contract, 438 

rights  of  party  accepting  or  paying  for, 438-443 

HORSE  RACING,  notes  given  to  secure  bets  on, 341,  367-370 

HOUR  of  presentment,  etc., 399,  526-528 

HUSBAND  AND  WIFE,  see  married  woman. 

I. 

IDENTITY  of  party  executing  contracts,  presumption  as  to, 702 

of  payees,  proving  them  partners, 685 

of  the  payee,  where  he  is  misnamed,  or  where  there  are  two 
persons  of  same  name 685 

IGNORANCE  of  party's  address  excuses  delay,  when, 647-649 

must  be  accompanied  with  diligence, 648,  649 

ILLEGALITY  of  consideration 336-370 

when  it  makes  void  notes  and  bills, 336,  337 

on  grounds  of  public  policy, 338-347 

by  express  statute, 347-349 

usurious  contracts, 349-365 

wagering,  gaming  and  stock  jobbing  contracts, 367-370 

of  note  given  for  liquors  illegally  sold, 339,  369 

ILLNESS,  an  excuse  for  delay  in  presentment,  when, 392 

delay  in  giving  notice,  when, 458 


774  INDEX. 

PAGE. 

IMBECILITY  of  mind,  when  a  want  of  legal  capacity, 62-64 

IMMORAL  CONTRACTS, 339,  340 

several  kinds  of, 339-347 

IMMATERIAL  ALLEGATIONS,  need  not  be  proved, 680 

IMMATERIAL  ALTERATIONS,  when, 94,  95 

what  are  material  alterations, 145,  146:  681,  682 

IMPLIED  AUTHORITY,  to  fill  up  blanks, 92-94,  95 

blank  acceptances, 411 

of  an  agent  to  bind  his  principal, 80,  87  -  89 

IMPLIED  WARRANTY  of  title, 188-191,  289-291 

that  paper  is  valid, 348 

existence  and  validity  of  paper, 289-291 

INDEMNITY,  for  a  lost  bill,  must  be  given,  when, 295-301 

INDORSEMENT,  contract  of, 245-295 

by  whom  made, . .  246-253 

of  bills  and  notes  by  executors,  etc.,. 247-249 

of  notes  in  blank,  creates  an  agency,  when, 92-94 

under  commercial  law, .«. 263-265 

restrictive,  when, 253,277-280 

by  all  the  payees,  when, '. 254 

by  a  firm, 254-'256 

by  party  holding  title  by  assignment, 256-258 

when  to  be  made,  time  important, 258-261 

what  an  indorsement  implies, 289-291 

indorsement  '  'without  recourse, " 282-284 

delivery  completes  transfer, 285,  286 

of  notes  and  drafts  not  negotiable,  effect  of, 230 

indorser's  undertaking, 261,  287-289 

what  he  guarantees  or  admits 289-291 

what  acts  discharge  him, 291-295 

indorsement  by  a  stranger,  effect  of, ...  650,  273,  274,229,  230 

see  also  note  to, 386 

modes  of  indorsement  and  delivery, 261-271 

laws  of  different  States  in  respect  to,  note, .-.  264-285 

right  of  holder  to  fill  up  blank  indorsement, 271,  272 

to  strike  out  indorsements, 275-277 

indorsement  for  part,  memorandum, 279-281 

essential  to  vest  indorsee  with  rights  of  a  bona  fide  holder,  286,  287 

INDORSEE,  merely  an  agent,  when, 253 

is  something  more  than  an  assignee, 286,  287 

who  are  assignees, 256-258 

right  to  fill  up  blank  indorsement, 271,  272 

to  strike  out  indorsements,  when, 275-277 

INDORSER,  his  contract  governed  by  what  law, 185,  261-264 

when  he  writes  his  name  on  blank  paper  to  be  used, ....  92-94 
see  note  giving  substance  of  statutes, 264-285 


INDEX.  775 

PAOB. 

INDORSEE  (Continued). 

his  contract  conditional, 261-267,  291-295 

may  limit  his  liability, 277-284 

when  a  maker  or  guarantor,  273,  274 

prima  facia  defence  by, 579,  580 

see  indorsement, 

INFANT,  cannot  bind  himself  by  note  or  bill, 64-68 

notes  and  acceptances  by  are  voidable, 65-68 

so  is  his  indorsement, 67 

may  repudiate  his  usurious  contract, 66 

as  payee,? his  competency  admitted, 67,  68,  250 

INFORMAL  BILL,  instance  of, 174 

INITIALS,  may  be  used  instead  of  name, 94,  251 

must  be  shown  to  have  been  used  instead  of  full  name, 91 

INLAND  BILLS,  origin  of, 50,  51,     52 

need  not  be  protested,  , 462,  463,  584,  585 

promissory  notes  on  the  footing  of, 584 

not  in  all  the  States,  see  note 264-285 

INSANITY,  incapacitates, 63,    64 

acts  of  insane  person  presumed  void,  when, 63,    64 

INSOLVENT,  discharge  of  and  its  effect, 385,  386 

INSTALMENTS,  notes  payable  in,  interest  on, 709 

INTEREST,  on  notes  and  bills  payable  in  another  state,  714-718,  180  -  184 

right  to  stipulate  for  interest  in  either, 180 

on  a  mortgage  made  here  to  secure  an  English  loan,. . .  183,  184 

rule  for  calculating,  note, 357 

rates  of  in  all  the  different  states,  note, 714-719 

interest,  when  recoverable  by  contract, 708-719 

when  recoverable  as  damages, 712,  719-722 

as  a  penalty — due-bills, 712,  713 

INTERPRETATION,  of  contract  by  what  law, 17G-186 

INTOXICATION,  may  be  pleaded  when, 325 

plea  interposed  by  indorser,  note, 689 

I.  0.  U.,  what  is  effect  of,  note, 315 

similar  instruments, 132 

J. 

JOINT  AND  SEVERAL  NOTE,  nature  of, 572,  574,  681,  682 

proof  in  an  action  on, 681 

alteration  of,  what  material, 681-683 

presentment  to  each  of  joint  makers,  etc., 160 

relation  to  each  other, 293 

JUDGMENT,  entered  in  dollars  and  cents, 711,  712 

bears  legal  interest  only, 711 ,  712 

JURY,  questions  of  fact  for, 472,  473,  611-614 

questions  of  law  for  the  court, 593-599,  625 


776 


INDEX. 


K. 

KNOWLEDGE,  of  dishonor  not  sufficient,  ..................  626,  581 

promise  with,  a  waiver  of  laches,  ....................  650-655 

that  drawee  has  no  funds,  etc.,  ...............  .  ......  639-647 

that  paper  will  not  be  honored,  .....................    ...  453 

that  paper  is  illegal  or  invalid,  .......................  316-324 

of  agent  binds  principal,  when,  .........................  105 

when  presumed  and  when  not,  ......................  347-348 

L. 

LACHES,  how  waived,  ................................  478,  650-655 

what  are,  in  presenting  for  acceptance,  ................  389-395 

in  presenting  check  .................................  396-398 

waiver  by  part  payment,  .....  ..........................  653 

conditional  promise,  effect  of,  .......................  652-655 

proof  that  promise  was  made  with  knowledge,  .......  653,  654 

by  distinct  admission  of  liability,  .  *  .................  654,  655 

LADING,  bill  of  appended  to  bill,  effect  of,  ...................  422-424 

how  far  negotiable,  note,  ...............................  61 

LARCENY,  of  bill  or  note,  proof  of  and  its  effect,  ...........  309,  310 

changes  burden  of  proof,  ...............................  691 

LAW-MERCHANT,  what  is,  ...................................     46 

contract  of  indorsement  under,  ..........................  265 

does  not  prevail  in  all  the  states,  note,  ...............  264-285 

LETTER,  direction  of  enclosing  notice,  .....................  608,  610 

LETTER  OF  CREDIT,  not  negotiable,  .........................   239 

two  classes  of,  general  and  special,  .......................  239 

LEX  LOCI,  where  it  applies,  .......................  177-186,  261-264 

applies  to  indorser's  contract,  .......................  261-264 

to  drawer's  contract,  ..............................  263,  264 

and  to  that  of  the  acceptor,  ........................  385,  386 

prevails  in  regard  to  interest,  .......................  713-719 

and  as  to  damages,  ............................  716-722,  709 

LIMITED  PARTNER,  his  responsibility,  etc.,  ...............  107-109 

LOSS  OF  BILLS  AND  NOTES,  negotiable,  .................  295-310 

the  holder  has  no  action  on  at  law,  ..................  295-303 

under  the  statute  of  this  state,  ......................  295-297 

English  rule  in  relation  to,  ..........................  297-300 

party  called  on  to  pay  must  be  indemnified,  ......  295-301,  305 

when  not  so  entitled,  ...............................  301-302 

proof  that  bill  or  note  has  been  destroyed,  ............  302-304 

or  not  indorsed  when  lost,  ..............................  307 

demand  of  payment  of  lost  bill  or  note,  ..................  306 

severing  bank  bills  for  transmission,  loss  of,  ..............  307 

bona  fide  purchaser  of  lost  or  stolen  bills  and  notes,  ....  308-310 


INDEX.  777 


LUNATIC,  cannot  bind  himself  by  contract,  ...................  63,  64 

after  office  found,  his  contracts  are  void,  ..................     64 

before  that,  they  are  voidable,  ..........................  .  .     64 

he  is  like  an  infant,  ..................................  63,  64 

M. 

MAKER,  contract  by,  governed  by  what  law,  ....................  185 

MARKSMAN,  may  sign  or  indorse  by  mark  or  initials,  .......  150,  251 

MALA  FIDES,  effect  of  taking  paper  in  bad  faith,  ................  317 

with  notice  of  diversion,  ...................  316-324,  347,  348 

MARRIAGE,  effect  of  on  rights  of  women,  ......................     68 

in  relation  to  her  separate  estate,  .....................  68-71 

vests  notes,  etc.,  in  her  husband,  when,  ..................     71 

MARRIED  WOMAN,  cannot  bind  herself  by  contract,  .........  68-72 

may  if  her  husband  is  absent  from  the  country,  when,  .....     68 

and  may  bind  her  separate  estate  by  note,  etc.,  .........  68-71 

notes  payable  to,  belong  to  her  husband,  .................     71 

may  act  as  agent  for  her  husband,  ....................  71,     72 

MEMORANDUM,  on  notes  and  drafts,  effect  of,  .........  145-148,  281 

on  separate  paper,  .................................  145-147 

does  not  affect  note  or  bill,  .........................  145,  146 

MERCHANTS,  bills  formerly  drawn  only  between,  .............  51,  52 

MISDESCRIPTION,  of  bill  or  note,  effect  of,  ..  .....  472,  473,  588-601 

misstatcraent  in  notice,  .............................  591-593 

MISNOMER,  of  the  payee,  ..............................  91-92,  251 

proof  in  respect  to,  ....................................  685 

MISTAKE,  in  drawing  notice,  .........................  472,  591-593 

in  calculating  interest,  ..................................  356 

MODES  of  indorsement  and  transfer,  ........................  262-294 

indorsement  in  blank  and  in  full,  .......................  267 

advantages  of  each,  ................................  267-276 

restrictive  indorsement,  ............................  277-280 

qualified  indorsement,  ..............................  282-284 

unqualified,  is  a  double  contract,  ........................  284 

delivery  completes  contract,  ........................  285,  286 

the  indorser  a  new  drawer,  .............................  287 

transfer  of  negotiable  paper  without  indorsement,  ....  286,  287 

MONEY  HAD  AND  RECEIVED,  Ac.,  action  for  under  former 
practice,  ................................................  665,  666 

MONEY,  negotiable  notes  and  bills  must  be  payable  in,  ........   134-138 

should  be  surrendered  only  on  payment  in,  ..........   506,  507 

foreign,  converted  into  our  currency,  .......  137,  138,  726-729 

MONTH,  meaning  of  term  ......................................  513 

where  note  or  bill  rung  from  one  into  another,  long  and 
short  months,  ...................................  512-515 

47 


778  INDEX. 

N. 

PAGE. 

NAME,  mistake  in  writing, .. 91,  92,  251 

proof  in  respect  to, 685 

contained  in  notice, 591,  592 

NEED,  direction  to  apply  in  case  of, 175,  401,  402 

NEGLIGENCE,  in  making  inquiry,  what  is, 609-614 

it  is  want  of  diligence, 607,  608,  647,  649 

NEW  AND  OLD  STYLE,  difference  between, 513,  514 

NECESSARIES,  notes  given  by  infants  for, 65,     66 

NEGLECT,  see  negligence. 

NEGOTIABILITY,  words  of, 164-168 

of  state  and  railroad  bonds, 60,  61 

of  notes  in  several  States,  note, 264-285 

NEGOTIATION,  see  indorsement,  transfer,  sale,  and  purchaser. 

NON-ACCEPTANCE,  proceedings  on, 444-478 

holder  must  give  notice  of, 444,  445 

of  notes  and  bills  received  conditionally, 445 

failure  to  give  notice,  effect  of, 446 

presumptions  of  injury, 446,  447 

exceptions  to  the  general  rule, 446-448 

where  there  is  want  of  funds,  etc., 449-452 

no  effect  on  the  indorser's  rights, 452—454 

effect  of  death  of  drawee,  drawer  or  indorser, 454,  455 

bankruptcy  and  absence  of  drawee,  etc., 455,  456 

service  of  notice,  how  made, 456,  457-459 

delay  caused  by  sickness  or  accident, 458 

when  Sunday  or  a  holiday  intervenes, 459 

duty  of  an  agent  to  obtain  absolute  acceptance, 459-460 

protest,  when  necessary,  and  how  made, 461,  462 

notarial  certificate,  what  evidence  of, 463-467 

inland  bills  and  notes  need  not  be  protested. 468 

notice  of  dishonor  is  necessary, 469-472 

NON-PAYMENT,  proceedings  on,  notice, 581-655 

notice  and  protest  necessary,  when, 581-583 

protest,  how  and  by  whom  made, 581,  582,  587 

on  foreign  bills,  and  what  are  such, 582,  583 

notes  stand  on  footing  of  inland  bills, 584 

no  protest  of  necessary,  permitted  when, 584,  585 

made  according  to  what  law, 585,  586 

made  by  notary,  or  legal  deputy, 586 

notice  of,  must  be  given,  by  what  law, 587 

SUFFICIENCY  OF  NOTICE, 586-600 

SERVICE  OF  NOTICE, 601-614 

TIME  OF  SERVING  NOTICE, 614-625 

NOTICE,  BY  WHOM  GIVEN, 626-629 


INDEX.  779 

PAG*. 

NON-PAYMENT  (Continued). 

TO  WHOM   NOTICK  SHOULD  BE  GIVEN, 630-632 

WHEN  NOTICE  NOT  x KC KSS ART , 636-647 

some  exceptions  to  general  rule, 632-634 

WAIVER  OF  LACHES, 650-655 

NON-EXISTING  BILL,  acceptance  of, 411 

transfer  of,  and  its  effect, 289-291 

NOTARY  PUBLIC,  rights  and  duties  of, 461-463,  581,  582 

certificate  of,  when  evidence, 463-467,  585 

not  at  liberty  to  take  conditional  acceptance, 460 

or  to  take  checks  in  payment, 550-552 

cannot  delegate  his  functions, 466 

NOTES  AND  DRAFTS  not  negotiable, 139-143,  208-218 

see  statutes  of  different  States  in  note, 264-285 

for  a  certain  sum  of  money  payable  in  property, 421 

rule  of  damages  on, 723-725 

NOTE  AND  BILL,  analogy  between, 390,  391 

NOTICE  of  defect  in  title, 316-324 

to  agent  binds  principal,  when, 105 

of  diversion  of  accommodation, 316-324,  678 

of  illegality,  when  presumed  and  when  not, 347,  348 

proof  to  let  in  defence, 688-691 

NOTICE  TO  PRODUCE  notice  served,  not  necessary, 697-699 

NOTICE  OF  DISHONOR,  reason  requiring 288,444,  445 

when  failure  of  cannot  be  insisted  on, 259,  446-448 

where  there  is  want  of  funds, 449-452 

indorser  entitled  to  notice  in  such  cases, 452-454 

service  of  notice,  how  made, 456-459 

where  partial  acceptance  is  offered 459,  460 

of  inland  bills  and  notes, 469-472 

sufficiency  of  notice, 470-472 

construction  of, 473 

holder  should  give  notice  to  all  the  parties, 473-475 

duty  of  collecting  agent  in  this  respect, 475,  476 

notice  from  a  mere  stranger, 476 

by  whom  it  may  be  given, 477 

when  note  or  bill  need  not  be  presented  for  payment, 477 

want  of  notice,  waiver  of  laches, 478 

of  non-payment,  by  what  law  governed, 587 

SUFFICIENCY  OF  NOTICE,  description  of  paper, 588-600 

misdescription  of  note  or  bill,  effect  of, 589,  590 

misstatement  of  act  done  by  notary, 591,  592 

notice  when  sufficient, 593-600 

sufficiency  of  notice,  when  a  question  of  law, 593,  594 

construction  of, 594 


780  INDEX. 

PAGE. 

NOTICE  OF  DISHONOR. 

SUFFICIENCY  OF  NOTICE  (Continued). 

what  notice  should  contain,  rule  as  now  held, 595-600 

need  not  state  that  holder  looks  to  indorser,  etc., 599 

need  not  state  who  is  the  holder, 600 

SERVICE  OF  NOTICE, 601-614 

original  rule,  modified, 601,  602 

service  by  mail,  may  be  made  when, 602-607 

service  by  mail,  when  completed, 607 

in  case  of  foreign  bills, 608 

directing  the  notice  sent  by  mail, 608,  609 

diligence  to  find  drawer  or  indorser 's  address, 609-614 

tantamount  to  notice,  when, 609-611 

presumption  from  date  of  draft  or  note, 611 

removal  by  drawer  or  indorser,  effect  of, 612 

due  diligence  a  question  of  law,  when, 612,  614 

is  the  same,  whether  service  be  by  mail  or  otherwise, ......  613 

failure  to  find  drawer  or  indorser  at  home, 613 

TIME  OF  SERVING  NOTICE, 614-625 

cannot  be  given  till  after  demand  and  refusal, 614 

must  be  given  within  reasonable  time  after, 615 

may  be  given  same  day,  must  be  given  on  next, 615 

that  is,  on  the  next  business  day, 615,  616 

how  early,  when  sent  by  penny  post,  or  private  hand, 616 

notice  sent  by  mail,  how  soon, 617-622 

by  mail  of  the  next  day, 618,  619 

modification  of  former  rule, 619-621 

where  no  mail  leaves  next  day, 622 

who  considered  parties,  agents, 622,  623 

duty  of  each  the  same, 623 

an  illustration  of  the  rule, 624 

in  the  case  of  a  foreign  bill,  late  case, 624,  625 

diligence,  a  question  of  law, 625 

BY  WHOM  SHOULD  THE  NOTICE  BE   GIVEN, 626-629 

cannot  be  given  by  a  stranger, 626 

may  be  given  by  holder  to  all  the  parties, 626,  627 

or  by  any  party  to  bill  or  note, 627-629 

and  enures  to  benefit  of  any  other  party, 626-629 

a  notary,  banker  or  agent  may  give  notice, 628,  629 

holder  should  notify  all  parties,  when, 629 

and  each  should  notify  pr  ior  indorsers,  when, 629 

TO  WHOM  NOTICE    SHOULD  BE  GIVEN, 630-632 

who  need  not  be  notified, 630 

joint  indorsers,  not  partners  and  partners, 630,  631,  632 

where  indorser  is  dead,  notice,  how  given, 631 

to  a  survivor,  sufficient, 631 


INDEX.  781 

PAGB. 

NOTICE  OF  DISHONOR. 

To  WHOM  NOTICE  SHOULD  BB  GIVEN  (Continued). 

notice  to  one  of  a  late  firm  good,  note, 632 

exceptions  to  general  rule,  by  waiver, 632-63G 

by  agreement  or  conduct  calculated  to  mislead, 633-636 

WHEW  NOTICE  NOT  NECESSABT, 636-647 

class  of  cases  where  want  of,  no  injury, 636 

as  where  party  entitled  to,  has  been  secured, 637,  638 

or  where  bill  or  note  was  made  for  his  accommodation, 638 

accommodation  drawer  or  indorser  entitled  to, 639 

want  of  funds  or  right  to  draw,  effect  of, 640-646 

having  a  remedy  over,  entitled  to  notice, 644 

want  of  funds,  prima  facie  excuse, 645 

rule  of  pleading,  in  respect  to;  reason  of  rule, 646,  647 

ignorance  of  indorser's  address,  an  excuse  for  delay, . .  647,  648 
diligence  in  giving  erroneous  notice,  gives  right  of  recourse, 

648,  649 

delay,  when  and  how  excused, 649,  650 

WAIVER  OF  LACHES,  how  made, 650-655 

by  promise  to  pay  with  knowledge  of  laches, 650-654 

made  in  ignorance  or  misapprehension, 651 

conditional  promise  no  waiver, 652 

effect  of,  as  an  admission  of  liability, 653,  655 

admitted  laches  only  waived  by  direct  promise, 654 

recall  of  notice,  case  of  estoppel, 655 

NOTICE,  to  guarantor,  241-244 

NOTING,  what  is  and  effect  of, 461,  581-583 

0. 

OLD  AND  NEW  STYLE,  difference  between, 513,  514 

OR  ORDER,  words  of, 164-168 

ONUS  PROBANDI,  on  whom, 687,  688-691 

shewn  by  pleadings,  see  evidence 679 

ORDER  to  pay,  bill  must  contain, 160 

OVER  DUE  BILLS,  transfer  of, 56,  57,  259-261 

purchaser  of,  presumed  to  have  given  value  for, 690 

P. 

PAROL  ACCEPTANCE,  when  valid, 409-426 

PAROL,  assignment  by  and  delivery, 286,  287 

PARTIAL  ACCEPTANCE,  or  conditional, 419  421 

taking  such  acceptances,  'effect  of, 428-430 

PAROL  AGREEMENT,  cannot  be  shown,  when 147,  148 

varying  notes  or  bills,  cannot  be  proved, 313-315 

or  varying  written  acceptances, 424,  425 


782  INDEX. 

PAGE. 

PARTIAL  FAILURE  of  consideration, 333-335 

may  be  shewn  in  reduction  of  damages, 334 

English  rule  different, 335 

PARTICULAR  FUND,  notes  and  drafts  payable  out  of,  143,  144,  419-424 

are  not  negotiable, .  i 139-145 

taking  such  acceptances,  effect  of, 428-430 

PARTIES,  chapter  on  parties, 62-123 

legal  capacity,. 62-72 

corporations  as, 75-77 

executors  and  administrators, 78 

trustees,  guardians,  agents,  etc., 78-99 

partners  as  agents  of  the  firm, 100-109 

PARTNERSHIP,  what  constitutes, 96-99 

special,  under  statute, 107-109 

PARTNERS,  are  agents  for  the  firm, 96,  99-104,  106-117 

may  bind  the  firm  in  its  regular  business, 100-103 

cannot  sign  contracts,  in  firm  name,  as  sureties, 103 

cannot  make,  accept,  or  indorse  accommodation  paper,.  103-105 

assent  of  other  partners,  how  shown, 105,  106 

in  respect  to  real  estate, 110,  111 

dissolution,  effect  of, 111-117 

rights  of,  after  dissolution, 117-121 

admissions  by  one,  effect  of, 118-120 

dissolution  by  insolvency  of  one  partner, 121 

right  of  one  to  sell  or  pledge  firm  property, 121 

right  of  surviving  partner, 122,  123 

PARTS  AND  PARTICULAR  REQUISITES,  of  notes  and  bills,  149-176 
notes,  bills,  indorsements,  etc.,  may  be  written  in  pencil,. . .  149 

may  be  executed  by  a  mark, 150 

date,  uses  and  manner  of, 150-152 

superscription,  use  of, 152,  153 

time  and  place  of  payment, 153-160 

order  to  pay, 160 

foreign  bills  drawn  in  several  parts, 161-164 

words  of  negotiability, 164-168 

sum  payable, 168,  169 

value  received,  effect  of  words, 1G9-172 

words  of  advice, 172 

address, 173-175 

PAYEE,  has  title  to  the  bill  or  note, 54 

must  indorse, 250-256 

exceptions  to  the  rule, 256,  257 

indorsement,  may  be  made,  when, 258 

action  by,  allegation  and  proof, 1659,  665,  680.  681 


INDEX. 


763 


PAOK. 

PAYMENT,  time  and  place  of, 153-1GO 

time  of  must  be  certain  to  arrive, 153,  154 

computation  of  time, 155 

in  regard  to  sight  bills, 155 

notes  and  bills  on  demand, 156,  157 

of  notes  and  drafts  payable  in  property, .'. . .  214-216 

voluntary  and  officious, 439,  535,  536 

of  wrong  draft,  by  mistake, 547 

Br  WHOM  TO  BE  HADE, 532-537 

by  accommodation  makers,acceptors,and  sureties, effect  of,  532-534 

"  retiring  "  a  bill,  meaning  of, 534 

surety  drawers,  when  bound  to  pay, 534 

payment  by  an  indorser,  effect  of, 535 

by  a  volunteer, 535,  536 

payment,  supra  protest, 536,  537 

To  WHOM   TO  BE   MADE, 537-548 

must  be  paid  to  owner  and  holder, 537-540 

to  the  party  having  the  title,  by  indorsement, 537,  538 

in  the  case  of  a  lost  bill  or  note, 538 

to  party  in  possession,  when  good, 538-540 

payment  to  wrong  party  by  mistake, . . 541 

in  cases  of  forgery,  when  money  may  be  recovered,. . .  541-545 

where  a  bank  pays  to  a  forged  check  or  indorsement, 545 

where  carelessly  drawn,  effect  of, 545 

after  countermand  of  check  or  draft, 546 

effect  of  selling  forged  paper, 546 

money  paid  by  mistake,  general  rule, 546,  547 

indorser  may  recover  money  paid,  when, 54G,  547 

where  an  agent  pays  by  mistake,  effect  of, 547 

payment  must  be  made  to  party  entitled  to  receive, ....  547,  548 
to  the  party  capable  of  discharging  debt, 548 

AT  WHAT  TIM K    SHOULD  BE    MADE, 548,    549 

should  be  made  in  due  course, 548 

premature  payment,  danger  ot, 549 

may  be  made  at  any  time  on  last  day, 549 

How  MADE, 550-554 

in  the  case  of  bills  and  notes  not  negotiable, 550 

should  be  made  in  money, 550 

effect  of  taking  payment  by  check  or  bill, 550-552 

of  appointing  maker  or  acceptor  executor, 553,  554 

APPLICATION'  OF  PAYMENTS, 554-565 

payee's  right  to  make  the  appropriation, 554-559 

creditor's  right,  when  he  does  not, 554-562 

application  made  by  law, 555-559 

on  presumed  intention  of  parties, 556,  557 

respect  paid  to  rights  of  sureties, 558,  559 


784  INDEX. 

PAYMENT. 

APPLICATION  OP  PAYMENTS  (Continued). 

and  other  parties  and  to  lawfulness-  of  the  demand,. 559 

application  once  made,  effect  of, . 560-562 

mode  of  making  it, 561-563 

payment  by  party  accommodated,  effect  of, 564 

RELEASE  OF  PRINCIPAL  DEBTOR, . 565 

maker  and  acceptor  treated  as  principal  debtors, 565 

drawers  and  indorsers  not  strictly  sureties 565,  566 

when  released  like  sureties, .-. . .  566 

by  giving  time  by  valid  contract, 567-569 

by  release  or  giving  time  to  prior  indorser, 569,  570 

what  acts  do  not  operate  as  a  release, 570 

what  stipulations  for  time  may  be  given, 570,  571 

by  consent  of  parties, 571 

invalid  agreement  for  time, 571,  572 

a  surety  maker  of  note,  when  discharged, 572,  573 

discharge  of  a  joint  maker,  effect  of, 573,  574 

the  party  accommodated,  not  discharged, 575 

by  giving  maker  or  acceptor  time, 575 

compounding  with  prior  party, 575 

RECEIPT,  should  be  taken  on  note,  when, 575,  578,  580 

bills  and  notes  surrendered  as  vouchers, 576 

in  general,  no  right  to  demand  receipt, 576,  577,  578 

payment  sub  modo,  may  be  pleaded, 579,  580 

accord  and  satisfaction, 580 

PAYMENT  BY  BILL  OR  NOTE, 192-207 

does  not  extinguish  the  debt, 192 

by  note  of  one  of  several  joint  debtors, 192,  194,  195 

by  note  of  a  third  petson, 193,  194 

the  same  on  a  sale  of  goods, 195,  196 

matter  of  agreement, 192-197,  201-203 

is  payment  sab  modo, 196 

suspends  right  of  action, 197 

duty  of  party  receiving  to  protest,  etc., 198j  200,  204 

must  account  for  negotiable  paper  so  received, 198,  199 

taking  bills  and  notes  on  suspending  suit, 199,200 

renewal,  effect  of,  as  to  indorser, 200 

presumption  in  regard  to  a  check, 201 

in  regard  to  notes  and  bills, 198-203 

rule  in  other  States, 202 

revival  of  right  of  action  on  debt, 204 

by  a  forged  or  valueles  note, 205-207 

in  counterfeit  or  insolvent  bank  notes, 204-207 

PAYMENT  SUPRA  PROTEST, 439,  440 

what  party  paying  must  prove, 439,  440 


785 


PAYMENT  SUPRA  PROTEST  (Continued). 

nature  of  acceptor's  contract  ..................  .  .....  438-444 

holder  of  bill  not  bound  to  take,  ........................  443 

French  law  on  subject,  ........  .  ...............  752,  753,  755 

PENCIL,  indorsements,  etc.,  may  be  written  in,  ..............  149,  150 

PER  ADVICE,  words  of,  ......................................  172 

PLACE,  of  demand  of  notes  and  drafts  payable  in  property,.  .  .  214-217 
of  presentment  for  acceptance,  .............  380,  381,  399,  400 

of  presentment  for  payment,  ................  479-482,  495-502 

PLEADING,  in  relation  to  notes  and  drafts  not  negotiable,  .....  208-214 

rules  of,  under  code  of  procedure,  .............  ......  G5G-C58 

action,  by  whom  brought,  .  .  ........................  658-664 

plaintiff  must  shew  title  in  himself,  etc.,  ..............  658-663 

difference  between  recent  and  former  rule,  ............  660-663 

action  by  payee  against  maker  or  acceptor,  ................  659 

tracing  title,  by  indorser,  .........................  663,  664 

allegation  of  transfer  by  indorsement,  ....................  664 

action  by  payee  on  original  consideration,  ................  665 

action  for  money  bad,  etc.,  by  whom  brought,  ........   665-667 

law-merchant,  rules  of  pleading,  theory  of  a  note,  etc.,  .....  6C7 

standard  of  pleading,  and  mode,  .....................  668-670 

remedy,  when  pleading  is  too  general,,  ..........  .  ........  670 

allegations  by  payee  against  maker,  etc.,  delivery,  .....  670-673 

should  shew  that  the  note  is  due,  ...........  .  .......  671,  672 

complaint  against  indorser  or  drawer,  ............  428,  674-677 

pleading  in  respect  to  consideration,  ..................  677-679 

proper  allegations  to  let  in  a  defence,  .................  677,  678 

PLEDGING  OR  SALE  of  notes  and  bills  of  factor,  ..........  252,  658 

POSSESSION,  evidence  of  title  to  negotiable  paper,  when,  494,  495 

537-540,   684 

not  evidence  of  title  to  notes  and  drafts  not  negotiable,  216,  217 
evidence  of  title  to  negotiable  paper  acquired  after  maturity,  690 
of  indorsed  check,  evidence  of  payment,  ..................  553 

POST-DATING,  does  not  affect  bill  or  note,  ......................   151 

the  French  law  as  to  indorsements  is  different,  ........  751-753 

POST  OFFICE,  service  of  notice  through,  ...................  602-607 

in  relation  to  foreign  bills,  ..............................  603 

directing  notice,  ..................................  608,  609 

POWER  OF  ATTORNEY,  how  construed,  ...................  85-89 

PRESENTMENT  FOR  ACCEPTANCE,  .....................  386-405 

the  holder  has  an  interest  in  an  early  presentment,  ....  386-388 

of  bills  payable  after  sight  or  demand,  ...............  386,  387 

of  bills  payable  after  date  or  on  a  day  certain,  .............  387 

after  sight  bills  to  be  presented  with  diligence,  ........  387-395 

what  is  diligence  in  presenting  foreign  bills,  ...........  388-390 

the  interest  of  both  parties  to  be  considered,  .........  392-395 

effect  of  a  general  custom,  ..........................  392-394 


786  INDEX. 

PAdS. 

PRESENTMENT  FOR  ACCEPTANCE  (Continued). 

of  checks  and  inland  bills, » 396-398 

hours  and  place  of, 399 

to  whom  and  by  whom, * 400-402 

duty  of  a  collecting  agent, . » 402-405 

PRESENTMENT  FOR  PAYMENT, ,....>,., 479 

WHEN  NECESSARY, 479-494 

not,  as  against  maker  or  acceptor, 479-482 

effect  of  making  bills  and  notes  payable  at  a  given  place,  479-481 

severed  bank  bills,  demand  when  necessary, 482 

exception  in  the  case  of  a  pledge, 482 

to  charge  drawer  or  indorser, 483 

diligence,  when  sufficient, 483-486 

in  case  of  death  or  insolvency  of  maker  or  acceptor, . . .  486-489 

absence,  or  absconding  of  maker  or  acceptor, 489-491 

as  to  drawer,  want  of  funds  excuses, 491 

accident  preventing, 492,  493 

an  express  condition  precedent, 493 

BY  WHOM  to  be  made, 494 

WHERE  AND  TO  WHOM  made, . . » 495-502 

when  addressed  to  or  payable  at  place  named, 496-499 

at  a  bank  since  discontinued, 498 

at  either  of  two  places, 499 

note  made  or  bill  accepted  by  several  persons, 500 

alteration,  memorandum, 500-502 

MODE  OP  PRESENTMENT, 503 

as  to  manner  and  place, 503 

bills  and  notes  must  be  actually  presented,. 504,  505 

and  at  the  time  they  fall  due,  and  demanded, 505,  506 

should  only  be  surrendered  on  payment  in  money,. . . .  506,  507 

what  amounts  to,  instances, 507 

in  the  case  of  lost  bills  and  notes, 508 

conventional  demand,  usage  of  banks, 508-510 

TIME  OP  PRESENTMENT  AND  DEMAND, 511-532 

must  be  presented  on  the  very  day,  when  due, 511 

notes  payable  on  demand,  within  reasonable  time, 512 

notes  and  bills  falling  due  on  Sunday, 512 

computation  of  time, 512-515 

period  of  a  month  and  of  a  year, 513 

old  and  new  style, 513,  514 

excluding  date,  and  including  day  of  payment, 514,  515 

long  and  short  months, 515 

usances,  how  counted, 516,  517 

days  of  grace,  when  allowed  and  nature  of, 517-526 

days  of  grace  added  to  the  time, 518 

number  allowed  in  different  places, 518-520 


INDEX.  787 

PRESENTMENT  FOR  PAYMENT.  PA". 

TlMB  OF  PRESENTMENT  AND  DEMAND  (Continued). 

prescribed  by  place  of  payment, 518-522 

effect  of  local  custom, 519-522 

local  usage,  when  cannot  be  shown 520,  521 

duty  of  a  collecting  agent,  in  respect  to, 522 

sight  bills  entitled  to  days  of  grace,  recent  statute, 523 

statutes  in  respect  to, 524 

allowed  only  on  negotiable  paper, 525 

form  a  part  of  time  paper  has  to  run, 525,  526,  527 

hour  of  presentment, 528,  529 

festival  and  holidays,. 529-532 

respect  to  maker  or  acceptor's  religion, 529-531 

holidays  prescribed  by  statute, 531,  532 

regulated  by  what  law, 587 

PRESUMPTION  of  consideration,  56,  78,  31 1-313 

in  the  inception  of  paper, 186-189 

pleaded  and  proved,  when 209-217 

as  to  time  of  indorsement 258 

that  party  taking  knows  bill  or  note  to  be  illegal, 347-349 

where  paper  is  over  due,  etc., 370-373,  690 

PRINCIPAL  AND  AGENT,  see  agent. 

PRINCIPAL  AND  SURETY,  see  surety. 

PROMISSORY  NOTE,  negotiable  by  statute, 52—53 

property  in  or  title  to, 54 

essential  qualities  of  bills  and  notes, 124-176 

how  made  payable, 125-132 

to  fictitious  payee, 125-130 

a  due  bill  is, 132 

how  made, 133,  134 

must  be  payable  in  money, 134-138 

must  be  for  payment  of  money  only, 138,  139 

must  be  payable  absolutely, 139,  140 

must  not  depend  on  a  contingency, 141-145 

must  not  be  payable  out  of  a  special  fund, 142,  143 

made  indorsable  over  by  statute, 245,  264-285 

rendered  void  by  statute, 347-376 

classes  of  contracts  declared  void, 349 

notes  declared  void  for  usury, 349-367 

sealed  notes,  not  negotiable 208-210 

see  statutes  of  the  States  in  note, 204-285 

notes  payable  in  property, 210-218 

rule  of  damages  on, 723-725 

a  certificate  of  deposit  is  a  promissory  note, 348 

made  by  an  agent,  when  he  binds  himself, 378 

diligence  in  presenting,  when  payable  on  demand, 390-392 

notes  and  acceptances  payable  conditionally, 419-421 


788  INDEX. 

FACET. 

PROOF  OF  CONSIDERATION,  in  general  not  necessary,.  ..56,  78,  315 

pleaded  and  proved,  when, 209-217 

presumptions  in  favor  of, 312,  313 

accommodation  paper, 315-324 

relation  of  parties  to,.. 373-377 

proof  against  maker  or  acceptor, 681,  682 

where  defence  is  allowed, 691,  692 

PROPERTY  NOTES  AND  DRAFTS, 210-217 

damages  on, 723-725 

PROTEST,  when  it  must  bo  made, 50,  184 

for  non-acceptance,  how  made, 461 

of  notes  and  inland  bills, .  462,  463 

certificate  of,  when  evidence, 463-467 

protest  for  non-payment,  when  necessary,  581-583 

part  of  the  custom,  mode  of, 581 

by  notary,  when  and  when  not, 581,  582 

of  notes  and  inland  bills, 584,  585 

must  be  shewn,  when, .  694 

PUBLIC  POLICY,  contracts  contrary  to, 338-347 

PURCHASER,  of  negotiable  paper  over  due, 56-57,  259-261 

of  negotiable  bonds, 60,  61 

of  note  with  a  memorandum  on  the  back, 281 

with  notice  implied, 317 

with  notice  of  diversion  of  accommodation  paper, 316-324 

of  notes  and  bills  rendered  void  by  statute, 337 

of  same  made  in  another  State, 348 

when  chargeable  with  notice  of  illegality,  when  not, . .  347,  348 

in  good  faith, 371 

and  for  value, 372,  373,  425 

purchaser  of  partnership  paper, 100-103 

,of  such  paper  signed  by  firm  as  surety, 103,  104 

Q. 

QUALIFIED  ACCEPTANCE,  effect  of, 142-145,  419-424 

releases  drawer  and  indorser,  when, 428-430 

R. 

RATIFICATION  of  the  act  of  an  agent, 87 

no  ratification  where  there  is  no  assumed  authority, 109 

RECEIPT  should  be  taken,  when, 575-580 

should  be  indorsed  on  note,  when, 575-578 

party  paying  entitled  to  note  or  bill,  as  voucher, 576 

right  to  a  receipt,  general  doctrine, 576,  577 

custom  of  banks,  presumption  in  respect  to, 577 

may  be  contradicted,  not  when  a  contract, 578-580 

no  right  to,  in  what  cases, 578 

no  right  to  demand  surrender  of  paper,  when, .  578,  579 

receipts  in  Full,  not  entitled  to, 579 


INDEX.  -.  789 


RECEIPT  (Continued). 

usage  to  give  receipts,  ..................................  579 

payment  sub  modo,  when  pleaded  as  defence,  ..........  579,  580 

accord  and  satisfaction,  what  is  ..........................  580 

RE-EXCHANGE,  not  allowed  on  debts  and  notes  .............   725-729 

what  is,  on  bills  of  exchange,  see  damages,  interest.  .  .  .  730-734 

RE-ISSUING  notes  and  bills,  ....  .................  261,  258-259,  564 

RELEASE  of  drawer  and  indorser,  .........................  291-295 

by  giving  time  to  maker  or  acceptor,  .................  565-573 

must  be  by  valid  contract,  ..........................   565-568 

by  giving  time  to  prior  indorser,  ........................  .  569 

what  does  not  work  as  a  release,  ....................  570,  571 

must  be  a  consideration  for,  ........................  571,  572 

of  surety  makers  of  notes,  etc.,  ....................   572,  573 

of  a  joint  maker,  effect  of,  .........................  573,  574 

parties  accommodated,  not  released,  ......................   575 

by  surrender  or  by  receipt  of  paper  paid,  .............  575-579 

on  receipt  of  part  payment,  .............................  580 

REMOVAL,  by  maker  or  acceptor,  .........................   159,  160 

from  residence  in  the  State,  ........................   159,  160 

of  principal  debtor  in  case  of  guaranty,   ............  236,  237 

RENEWAL  of  notes  and  bills,  effect  of,  .....................  351,  352 

by  a  partner,  when,  ................................  118-120 

REQUEST  TO  PAY,  equivalent  to  an  order,  .....................   160 

RESTRAINING  LAW,  effect  and  operation  of,  ........  75-79,  347-349 

REQUISITES  of  drafts  and  negotiable  notes,  ................  124-175 

essential  qualities  of,  ...................................    124 

must  be  payable  to  some  person,  ....................  125-132 

exception,  in  case  of  a  fictitious  payee,  ...............  125-128 

or  other  party,  our  statute,  ........................  129,  130 

payable  to  bearer,  etc.,  .............................  130-132 

due-bills,  etc.,  are  good  promissory  notes,  see  promissory 
notes,  ........................   .....................  132 

RESTRICTIVE  INDORSEMENT,  see  indorsement. 

RETOUR  SANS  PROTET,  direction,  effect  of,  ...................  175 

S. 

SALE  of  negotiable  paper,  what  it  implies,  ..................  289-291 

to  a  person  in  another  State,  effect  of,  ....................  348 

sale  of  at  an  under  value,  ...........................  352-355 

sale  of  at  an  under  value  by  indorsement,  ................  353 

not  usurious  here,  ......................................  353 

of  valueless  articles,  void,  ..........................  329-333 

of  worthless  and  illegal  paper,  ..........................  348 

SATISFACTION,  accord  and,  what  is,  ......................  579,  580 

compounding  with  maker  or  acceptor,  ................  ....  575 

SEALED  NOTES,  in  general  not  negotiable,  .................  208-210 

see  statute  laws  of  the  different  States,  ...............  264-285 


790  INDEX. 

RAM* 

SECURITY,  collateral,  effect  of  taking, 627-628,  354 

for  a  debt  evidenced  by  a  draft, 380 

SECRET  PARTNER,  when  bound  by  acts  of  firm, 109 

SETS  OF  BILLS,  form  but  one, 161-164 

SET-OFF,  when  allowed, 259-261 

partial  failure,  when  allowed, 333-335 

SIGHT  DRAFTS,  when  presented, 386-388 

under  our  recent  statute,  note, 523 

foreign,  when  presented, 388-395 

laches  in  presenting, 389-395 

in  presenting  a  bank  check, 396-398,  481 

at  what  hour  and  place, 399 

where  there  are  several  drawees, .....>....  400,  401 

in  case  of  drawee's  death, 401,  402 

duty  of  collecting  agent, 475,  476,  402-404 

SIGNATURE,  how  proved, 703-707 

by  attesting  witness,  when, 701-703 

SILENT  OR  SECRET  partners,  when  liable, 107-109 

SPECIE,  see  money. 

SPECIAL  PARTNER,  when  bound  by  acts  of  the  firm, 107-109 

SPIRITUOUS  LIQUORS,  notes  for  illegally  sold, 339,  558,  559 

STERLING,  meaning  of, 725,  726 

how  converted  into  our  money, 726-729 

STRIKING  OUT  INDORSEMENTS, 271,  275-277 

STATUTE  OF  FRAUDS, 222-234 

tendency  of  decisions  under, 222-226 

in  the  different  States, 228-230 

English  rule, 227 

original  undertaking, 229-232 

STATUTES  of  different  States,  note, 264-285 

dissimilar  in  many  respects, 266-285 

in  relation  to  rates  of  interest  and  usury,  note, 714-719 

STATES  are  foreign  to  each  other, 47-49,  582 

and  their  laws  are  also, 177-185,  348 

STAYING  PROCEEDINGS,  effect  of, 565-570 

STOCK-JOBBING  CONTRACTS, 370 

when  statute  does  not  annul  notes,  etc.,  founded  on, 370 

other  illegal  contracts, 367-371 

STYLE,  old  and  new,  difference  between, 513,  514 

SUBSCRIBING  WITNESS 175,;i76 

proving  instrument  by, 701-703 

must  be  called  or  his  absence  accounted  for, 701 

proof  of  his  signature,  sufficient  when, 702,  703 

SUM  PAYABLE  and  recoverable, 168,  708-749 

interest  the  usual  measure  of  damages, 708 

interest  secured  by  contract,  when, •- 708-719 


INDEX.  791 


SUM  PAYABLE  (Continued). 

recoverable  as  damages,  when,  .................  .  .....  711-722 

on  debts  and  notes  payable  in  another  State  or  country,  714 

718-722 
on  notes  payable  in  specific  articles  ...................  723-725 

on  note  payable  in  another  currency,  ................   725,  726 

exchange  not  allowed  on  debts  and  notes,  payable  in  another 
country,  ........................................  725-729 

on  bills  of  exchange  under  law  merchant,  .............  730-734 

under  statutes  of  several  States,  .....................  734-749 

rate  of  interest  in  several  States,  note,  ................  714-719 

damages  on  bills  fixed  by  statute  in  this  country,  ......  734-749 

want  of  uniform  rule,  ..............................  749,  750 

law  of  France  in  this  respect,  ...........  .  ...............  758 

SUNDAY,  see  days  of  grace. 

SUPRA  PROTEST,  see  acceptance  for  honor. 

SUPERSCRIPTION,  use  of,  ..............  .................  152,  153 

SURETY,  when  discharged,  ............................  355,572-574 

indorser  and  drawer,  when,  .........................  291-295 

must  be  by  valid  agreement,  .........................  5G5-575 

remedy  of,  for  payment  of  his  principal's  debt,  ........  293,  572 

SURETY  MAKER  of  note  or  drawer  of  bill,  ................  533,  534 

SUSPENSION  of  right  to  sue,  ..................................  355 

T. 

TENDER,  plea  in  nature  of,  ............................  480-482,  672 

TIME,  computation  of,  ................................  155,512,  515 

business  time,  what  is,  ................................  459 

counted  from  date,  ................................  514,  515 

allowed  as  days  of  grace,  usances,  etc.,  ...............  515-529 

as  festivals  and  holidays,  see  presentment  for  payment.  .  529-532 

TIME  OF  PAYMENT,  see  presentment  for  payment,  .........  512-532 

must  be  made  when  bill  or  note  is  due,  ...................  512 

how  ascertained,  computation  of  time,  etc.,  ...........  512-522 

TITLE,  warranted  on  a  transfer,  ...............  188,  289-291,  235-238 

cannot  be  deduced  through  a  forgery,  ............  190-191,  250 

TRANSFER,  includes  a  guaranty  of  title,  .  .................  188-191 

and  indorsement,  ..................................  245-295 

by  infants  and  husband,  ...........................  246,  247 

by  executors  and  administrators,  ...................  247,  248 

by  trustee,   ...........................................  256 

by  agent,  .........................................  249-252 

by  the  payee  and  owner  .............................   250-253 

by  restrictive  indorsement,  ..............................  253 

by  all  the  payees,  when,  ................................  254 

by  a  firm  .........................................  254-256 

by  party  holding  title  by  assignment,  ................  256-258 


792  INDEX, 

TRANSFER  (Continued).  *AGB. 

asserts  the  existence  of  the  paper,. - 258 

transfer  and  indorsement  not  the  same  thing, 249 

by  restrictive  and  qualified  indorsement, 277-284 

by  assignment  of  negotiable  paper, 286,  287 

completed  by  delivery, 285,  286 

TRUSTEE  of  an  express  trust,  right  to  sue, 252,  658 

u. 

USANCE,  what  is, 516,  517 

USURY,  on  notes  made  in  one,  payable  in  another  State,  . .  180-186,  366 

on  notes  and  bills, 349-367 

statutes  in  reference  to, 349-351,  355 

scope  of, 351 

construction  of, 355-367 

carried  forward  into  renewal  securities, 351 

when  notes  and  bills  may  be  sold  at  an  under  value,. . .  352-354 

inception  of  accommodation  paper, 352-354 

sale  of  notes  and  bills  for  an  under  value  by  indorsement,  not 

usurious  here, 353 

depositing  notes  as  collateral  security  for  an  usurious  debt, 

effect  of, 354 

usurious  renewals,  effect  of  on  previous  security, 354 

usury,  what  is  corrupt  agreement  for, 356 

taking  more  than  law  allows  by  mistake, 356 

by  mistake  of  law,  usurious, 356,  357 

taking  compound  interest,  not  usurious, 357,  358 

taking  interest  in  advance,  when  usurious  and  when  not,  358,  359 

for  the  days  of  grace,  not  usurious, 360 

defence  of  usury  must  be  strictly  proved, 360 

taking  funds  below  par  on  a  discount, 360-362 

agreement  to  keep  bills  in  circulation, 362 

agreement  for  an  insurance  on  a  discount, 362 

commissions  on  acceptances,  etc., 362,  363 

interest  and  forbearance,  meaning  of, 363 

no  usury  on  loan  of  goods;and  chattels, 363,  364 

exceptions  to  rule, 365 

sales  of  credit,  not  within  statute, 365 

taking  rate  of  exchange,  effect  of, 360,  366,  367 

laws  of  different  States,  in  regard  to,  and  rates  of  interest,  714-719 

V. 

VALUE  RECEIVED,  formerly  necessary, 56 

in  general  not  necessary, 169-172 

not  necessary  in  negotiable  paper, • 169,  170 

use  of  in  notes  not  negotiable, 171,  421 

in  notes  and  drafts  payable  in  specific  articles, 210-216 


IND  793 

PAGE. 

VARIANCE  of  description  in  notice,  when  not  material,  see  notice 

of  dishonor, 589,  590 

VARYING  ACCKITANCK,  sci- qualified  acceptance. 

Vi:.\  HIM ;  FORGED  PAPER,  effect  of, 191,  348 

party  vending  responsible, 289-291 

\V. 

::RTXG  CONTRACTS,  illegal  when, 307-370 

securities  founded  on  void, 307,  308,  309 

i  at  common  law, 341,  308,  309 

money  lent  to  game  with, 309 

analogous  cases, 339 

stock -jobbing  contracts, 370 

general  rule  in  relation  to  illegal  contracts, 370 

WAIVER  of  laches,  by  subsequent  promise, 050-055 

by  payment, 053 

conditional  promise  is  not, 052-055 

evidence  of  promise  with  knowledge, 053,  054 

admission  of  liability 054,  055 

WANT  OF  EFFECTS  or  funds,  effect  of, 040-040 

excuses  presentment  for  payment,  when, 490,  491 

and  presentment  for  acceptance, 449-452 

no  excuse  as  to  indorser, 1"  2-454 

WARRANTY  of  title, 188-191 

that  paper  is  genuine, 191 

that  a  note  is  good  or  collectable, 235-238 

implied  by  indorsement  or  transfer, 289-291 

WARRANTY,  of  collection, 234-238 

of  payment, 221 ,  233,  234,  240 

WIFE,  see  married  woman. 

W ITNESSES,  parties  may  be, 099,  700 

subscribing, 701-703 

W  ANT  of  consideration, 315-327 

in  accommodation  paper, 315-324 

in  notes  and  bills  made  or  accepted  as  a  gift, 324,  325 

where  the  thing  sold  was  of  no  value, 320,  327 


48 


A    000713913    2 


